An Amazing Launch in the Past, an Awesome One in the Future

Consulting Team Marketing Plan

Company Background oFounded: 2011 by Jessica Alba and Partners

oHeadquarter: Santa Monica, CA

oFMCG: organic, eco-friendly and ethical

oMarket: USA & Canada (2015)

oRevenue: $250M (2016 projected), $170M (2015)

oCompany Value: $1.7B (2015)

oMission: “Our mission is to empower people to live a healthy, happy life. We're committed to creating effective, safe, delightful, accessible, responsible products”.

Source: Forbes, Honest

Source: Honest

Portfolio Manufacturing

SalesChannel

Brand Vision

Key Insights

Environmental awareness. Sense of Security. Care for the planet.

Customization – personal design – unique and stylish

Brand Promise

Honest. Safe. Healthy. Cared for. Proud and Confident Parent.

BrandPersonal

itySupporter. Reliable Friend. Fresh and Young. Stylish

and Caring.

Brand Strategy

Reasons to

BelieveOrganic non-toxic materials. Absorbent Botanically-

Infused. Delightful Product Design options.

Protecting people and the planet with high quality products. Bringing safety and health to families

through organic awareness.

Product DevelopmentMarket

Penetration

Market Development

DiversificationM

arke

ts

China the Next Big Step

Source: Wall Street, Forbes

New

Exi

stin

g

ProductsNewExistin

g

China England Australia

120 Products

Why China?

Population

No One-Child Policy

Manufacturing at

Place

Diversification

Product Development

Market trend: Chinese diaper market expand rapidlyConsumer trend: Shift from economy-types to premium diapers Channel trend: 40% of E-commerce channel by 2017

Market Analysis Manufacturing in ChinaOrganic essentials & eco-friendlyState-of-the-art diaper collectionBrand Recognition: Jessica AlbaE-commerce / Subscription

Honest Company’s Strengths

How to penetrate Chinese premium market by competing against

existing competitor such as P&G, KAO, Kimberly-Clark?

Challenges

Market Research & Opportunities in China

Source: Honest, Credit Suisse

Chinese diaper market is the most attractive market for Honest Co. to use their core strength and get into

the Asian marketOpportuni

ties

Affluent, young generation with western values and qualitative

preferencesTarget

Customer

Why?Sweet spot

Lived and studied abroad. Celebrity driven. Return to China and Continue their American

lifestyle.

The Sweet Spot in Premium

52%

48%

33%

26%13%

28%

People studied abroad

People studied in China

USA

UK

Canada

Others

“Westernized”8.6%

Customers buy Pampers Premium,

Huggies, Merries

Source: Euro Monitor, Credit Suisse, China Daily

Target: Premium Representing 8.6%

2.5%Share

Sales $ 112mn

5%

$ 223mn

8.6%

$ 379mn

* The sales of 2015 in USA & Canada is projected to be $ 250mn, Chinese Diaper market in 2015: $4,460mn

Estimated Market Volume: $223M

Worst Case

AverageCase

Best Case

Source: Euro Monitor, Credit Suisse, China Daily

High QualityOrganic Products

AttributesAmerican LifestyleSafe and Eco-Friendly

Product

Price: 3 Yuan ($0.4) per Diaper The same price as other premium brands in ChinaAdditional Pricing Strategy- Bundling

Price

Launch Strategy

E-Commerce Company Website Alibaba.com

Establishing our first Flagship Shop – Tier 1 Shanghai or Beijing

Place (Distribution)

Free samples through company’s Website

Promote Jessica Alba’s image Target Audience seeking

western culture Distribute samples e.g. to

premium Chinese hospitals to appeal safety

Promotion

Ziyi Zheng

Questions?

Appendix

Approx. 1985JA´s childhood

illness

2008JA´s first child &

illness

2010Raised

Venture Capital

2011Launched

Company with 17 products

JA lobbied with US congress

2014: 275 employees

75% online commerce & majority from diapeters

2014: available in retail 2016: 120 products

Entrepreneur & Co-FounderBrian Lee

(same experience)

Co-Founder:Christopher Gavigan,

Sean Kane

No marketing efforts (5 mio. followers)2016: 350 employees

2016: 130 customer service representative

JA gained knowledge

Some Facts

Background & History

Source: Honest, Forbes

• In China, a local celebrity spokesperson can prove especially valuable for prestige brands

• public is generally prone to be highly influenced by celebrity recommendations on social media

• Aligning with the right local celebrity is a smart strategy for luxury brands in China, especially as they enter a market where many may still be unfamiliar with them

• 80% of brands in this year’s Index produce videos exclusively for the Chinese market, featuring Chinese actors and cities. 30% of the top 20 most viewed videos featured a Chinese celebrity

• When Dior promoted the Chinese launch of their online magazine, DiorMag, the brand only received 33 reposts and 21 comments on its Sina Weibo page, compared with 8,187 “likes”, 252 shares, and 111 comments for the same content on Facebook. Less than a week later, the brand enlisted popular Chinese media personality Hung Haung to live-tweet a haute couture event on Dior’s Weibo page. With more than 4.5 million followers, Haung’s tweets dramatically boosted engagement

• To promote its “Sparkling Secrets” exhibition in Shanghai, Swarovski announced on Sina Weibo that celebrity/actor Wu Qilong would attend the opening party. Boosted by Wu’s personal Weibo following of nearly 12 million fans, the post received 13,124 reposts and 1,969 comments

https://www.l2inc.com/china-key-finding-the-celebrity-effect/2012/blog

Impact of Celebrities in Chinese Society

SEco-friendly, non-toxic essentialsOnline sales / distributionBrand Recognition: Jessica Alba (5 Mio. follower)Business connections through managementState-of-the-art diaper collection

WBrand awareness outside the USConsidered to be expensiveLimited packaging sizeRemaining product portfolio (excluding diapers)Targeting small and specific target

OGrowing modern young familiesIncreasing health awarenessIncreasing sustainable appreciationLower market barriers: Impact of CelebritiesIncreasing online salesAvailable financial funds and / or IPOEvolving “life style” families

TRelying on diapersFinancial strong competitionAlways “Honest”?Known in the US solelyProduct Statement

S W O T

Opportunity and Challenges in China

Power of Suppliers

Diapers Made in China

Competitive Rivalry

Size of different companies# of firmsOligopoly?

Power of Buyer

# of buyersDo we have to conform a

priceHealth Awareness /

Education

Barriers to Entry

Governmental regulationsAccess to Distribution

Pampers is a synonym for diapers

Threat of Substitutes

Other diapers fulfill same need

Honest entering new niche market

5 Forces

The Asian region is now the largest baby diaper market, accounting for around 30% of the global total (on a sales volume basis).

The Chinese and Southeast Asian markets continue to expand.

Market Trend all over the World

2008 2009 2010 2011 2012 20130

20

40

60

80

100

120

3443

5366

82

102

Diaper (100 million RMB)

Source: https://www.jetro.go.jp/ext_images/jfile/report/07000885/cn_babygoods_report.pdf

Company Brand

1 P&G Pampers

2 Unicharm Moony / Mamy Poko

3 Kimberly-Clark HUGGIES

4 Kao Merries

5 Hengan QMO

Main Player and Brand

Chinese diaper market is increasing rapidly due to economic growth The main players are “P&G”, “Unicharm”, “K-C”, “Kao”, and “Hengan”.

Market Size China

Kao and Kimberly-Clark (K-C), which have a strong presence in premium diapers popular among the mid- and high-income group, are currently expanding market share

in China.

Market Share by Company

Premium and pull-up increasing share, especially “Premium” share will increase from 10% to 24%

Market Share by Product Type

E-commerce emerging as the most important sales channel; shift to premium products gains momentum

Market Share by Channel

Kao holds top share in premium category in e-commerce channel; top share overall for P&G

Market Share by Channel & Company