lxfm 749 final book
TRANSCRIPT
1
2
TABLE OF CONTENTS
ABSTRACT 4
EXECUTIVE SUMMARY 6
BUSINESS DESCRIPTION 7-‐‑8
BUSINESS ENVIRONMENT ANALYSIS 9-‐‑13
INDUSTRY BACKGROUND 14-‐‑19
COMPETITOR ANALYSIS 20-‐‑27
MARKET ANALYSIS 28-‐‑34
MARKETING 36-‐‑50
OPERATION 51-‐‑54
FINANCIAL 55-‐‑61
REFERENCE 62
APPENDITEB63–69
3
ABSTRACT "ʺBeauty from within"ʺ is a concept that is gaining momentum and credibility, and has been the focus of many large companies in the beauty industry. Rising income levels, increasing health awareness and a rapidly aging world population also lead consumers to seek alternatives to the use of topical cosmetics to maintain or rejuvenate their health and beauty. Derived from the concept of nutricosmetics, the purpose of this project is to develop a new business concept i.e. a nutricosmetic boutique providing on-‐‑site food and beverage (F&B) consumption as well as take-‐‑home beauty supplement products for beauty conscious consumers in Vietnam. In order to gain in-‐‑depth knowledge required for this project, a case study methodology will be utilized including interviews conducted with individuals who have experience in the nutricosmetic industry in Vietnam such as doctors and nutritionists. Meetings with experts in the beauty industry and catering service in Ho Chi Minh City (HCMC) help determine important criteria for the business model. In addition, surveys and focus groups will be administered to urban Vietnamese consumers in HCMC to understand their needs and suggest the type of services and list of products or food and drinks that cater to those needs. Participation and observation at the local businesses will also provide access to more customers and industry insights. Beyond financial gain, implementation of this business concept has the potential to evolve into a network of beauty professionals in collaboration with beauty magazines and cosmetic companies in Vietnam, giving the urban consumers more options for their wellness and beauty. Key Words: nutricosmetics, boutique, urban consumers, Vietnam.
Beauty From Within
4
Skin Deep Nutrition
5
Executive Summary Tu es Belle (TEB) is a skin deep nutrition boutique, centrally located in the business district 1 of Ho Chi Minh city, Vietnam. Our company realizes the potential market of female professionals aged 26 to 44, who have the skincare needs while working in the enclosed and stressful working environments of large corporations. They want to climb up the career ladder, at the same time, try everyway to maintain the youthful, healthy looking skin. They have sufficient monthly income to buy premium skincare products which provide high efficacy. Our market research showed the top 3 skincare concerns are anti-‐‑aging, prevent aging and moisturizing for female staff. Tu Es Belle have our product categories both beauty supplements as well as beauty F&B catering those specific needs. Our boutique is strategically situated at grade A office building, Kumho Asian Link, which brings highest accessibility to the target female professionals. While there are many competitors i.e. pharmacies, direct selling companies, or healthy F&B, there are none similar to us in providing consumers not only the skin deep nutrition, but also a sense of female beauty community, with professional expert advices. In the first fiscal year, our focus will be 61% on beauty F&B, and 39% in supplements to maintain safe financial cash flows of a healthy business. We invest in customer service and non-‐‑traditional promotional strategy(Word of mouth, friend referral etc.) to gradually build consumer loyalty, at the same time minimize startup cost. Financial plan project sales for the first year will be around $100,877.39. Our company will breakeven after 14 months of operation when reaching 21000 serving units in F&B. A measurable and alainable target if we can sell about 30-‐‑50 units per day. Overall, this is a new and unique opportunity to transform this business into the reality. With minimal investment costs and low risks as specified in the later part of this business plan.
Skin Deep Nutrition
6
Business Description
7
The global market for edible and drinkable beauty products is booming with an estimated 5.14 billion USD in 2015, 70% of which comes from Asian countries such as Japan and China (Euromonitor Global Health & Wellness report, 2013). Vietnamese culture in particular has long nurtured the concept of “eat your way to beauty.” Some of the popular ingredients found in Vietnamese kitchens for beauty are birds’ nests, seaweed, royal jelly honey, etc. These open the opportunity to X, a newly developed retail model selling nutricosmetics. TEB offers a variety of skincare supplements from reputable brands from Japan, Korea, the US and more, aiming at different consumer needs from anti-‐‑aging, skin whitening to moisturizing. Customers can conveniently find these products on the shelves from ready-‐‑to-‐‑drinks (RTD) (Shiseido Collagen beauty drinks), to collagen powder mixes (Meji Amino Collagen powder), to supplement pills (Inneov by L’Oréal), and the Olay Vitamins line (Olay from Procter & Gamble), etc.
Additionally, there is a growing demand for organic and natural ingredients in the products (Sasa, 2013). Besides supplements, a defining characteristic of our business is the quick dining service, in which customers can also dine in for a light beauty-‐‑enhancing meal, while relaxing with friends. Our menu includes seaweed soup, collagen snacks, fruit desserts and healthy drinks (e.g., detox smoothies, anti-‐‑aging herbal teas). TEB is also strategically located in the center district 1, Ho Chi Minh City, Vietnam. This location has the highest concentration of up-‐‑scale office buildings in the entire nation, e.g. Bitexco Financial Tower, Metropolitan, Kumho Asiana as well as government agencies, recreational centers, such as shopping malls, restaurants, movies theaters, and bars etc. With this location, TEB also has great access to potential markets of consumers with hectic and busy lifestyles, but who want to find credible skincare supplements as well as beauty food & drinks in a convenient, casual and relaxing seling.
8
Business Environment Analysis
9
Despite the economic slowdown, Vietnam beauty and personal care managed to record healthy growth in sales of 16.7% over the 2011 – 2012 period and is forecast to reach 17,655.6 billion VND (835 million USD) in 2017 (Euromonitor Beauty & Personal Care -‐‑ Vietnam, 2013). Improvement in disposable household incomes, greater alention to hygiene and appearance, and the increasingly stressful modern lifestyles, especially for the middle or high-‐‑income classes, will also lead the consumers toward functional food and drinks for beauty. Furthermore, Vietnam after joining the WTO, has opened up to many free trade agreements, which facilitate the import of foreign products into the country. For instance, the special preferential trade agreements (Ministry of Foreign Affair, 2013) e.g. ASEAN – Japan Comprehensive Economic Partners (AJCEP) offers special rates on Japanese import beauty products. These lead to a higher availability of beauty supplements in the Vietnam market. In a report on consumer health in Vietnam, Euromonitor (July 2013) reports that consumers in Vietnam, especially in the urban areas, have developed higher awareness over the importance of adopting a healthier lifestyle, e.g. exercising, regular medical checkups, and eating a proper diet.
Healthy Growth of Vietnam Beauty & Personal Care
10
Based on Nielsen’s 2013 Reference Book on consumers in Vietnam, typical guests of the boutique may be as follows:
* Consumers with Gross Monthly Income Band A2+ i.e. from 30,000,000 VND, who can afford to buy functional food for beauty.
* Locals and Expats by regions who work in upscale office buildings in the business districts for Phu My Hung commercial and residential as well as the surroundings and central business district 1. Their busy 9-‐‑5 lifestyle in enclosed air-‐‑conditioned office environments causes some skincare concerns for our potential customers.
Simultaneously, doing business in Ho Chi Minh city is more convenient than other parts of the country because it has the central import ports and government entities available for business practice and a prosperous trade center of exchange with foreigners. This economic hub of the nation also has more than 3,000 foreign representative offices and large corporations from 60 countries located in the central business districts 1 and 7, creating a potential market for TEB. 11
CO
MM
ON
SA
LES
CA
HN
NEL
S
Direct Selling is also known as Multi-‐‑Level Marketing (MLM) in Vietnam.
Mostly, this sales channel is dominated by large foreign invested companies such as Amway or Herbal life with a diverse product portfolio of vitamins and dietary supplements. They often have professional sales representatives to bring the product directly to consumers through peer
preferences. Their products are often considered high-‐‑quality products at a higher
price compared to the average price of functional food and product’s uniqueness.
Pharmacies are regarded as the most credible buying channel for general medication and beauty supplements, particularly since all pharmacies must comply with the strict regulations of the Ministry of Health. Additionally, consumers also receive OTC medical advices from pharmacists when searching for specific types of beauty supplements. Pricing for beauty supplements can be varied, often quite reasonably based on the product brands and origins. An employee of a pharmacy near Tan Dinh Market in Ho Chi Minh City’s District 1 said more and more people are using nutritional supplements including general health and skincare supplements (Dantri International News, 2011). Therefore, many pharmacies also have a considerably large space to store and present supplements.
The sales of skincare supplements in Ho Chi Minh are mainly available at the following channels:
12
CO
MM
ON
SA
LES
CA
HN
NEL
S
Beauty Clinics and Spas offer skincare treatments with dermatologists and skincare professionals. The credibility and
the product pricing of this sales channel depend on the reputation and the experiences of the
skincare professionals. Most often consumers in Vietnam go to spas for relaxation and skin
rejuvenation. At the same time, the customers will try certain beauty supplements
recommended by the staff as add-‐‑ons to their regular treatments.
Online channels are often regarded as a cheaper channel to buy beauty supplements since it is not registered with the Ministry of Health and are often illegally imported/ hand-‐‑carried by visitors to Vietnam to avoid taxes and fees. There are countless numbers of functional food and drink products imported through this channel, but none have acquired a quality certificate by a competent testing agency in Vietnam. When buying from this channel, consumers face a high risk of fake or expired products, low quality and counter-‐‑reaction without compensation or cure.
The sales of skincare supplements in Ho Chi Minh are mainly available at the following channels:
13
Industry Background
14
THE
TREN
DS
The skincare industry is very dynamic and is characterized by innovation and a high rate of product development. Innovation is essential to maintain global competitiveness, to improve performance, safety and the environmental impact of products, and to keep up with constantly evolving consumer preferences. The skincare market in Vietnam witnessed a value growth of 19% from 2011-‐‑2012 (Euromonitor -‐‑ Skin Care Vietnam, 2013). There are several factors that contributed to skincare’s strong performance. Firstly, consumers are becoming more aware of the importance of skincare through various media sources, such as beauty magazines, online beauty videos, or the internet. The popular trend in natural make-‐‑up, in which a perfect skin is essential, also helped stress the importance of skincare. For example, premium beauty brand Shiseido initiated their advertising campaign in 2014 emphasizing “Flawless Skin” and “Snowy White.” Moreover, as living standards improve, consumers are becoming more willing to spend on skincare products. In response to these trends, manufacturers are introducing products in different price ranges, enabling them to reach out to a variety of consumer segments.
15
Ageing is a major concern among many female consumers. However, in the past, anti-‐‑aging products were considered a luxury as they were only available through premiums brands. As such, when manufacturers introduced more anti-‐‑aging products at an affordable price, giving low-‐‑to-‐‑middle income consumers more options from which to choose, sales of mass anti-‐‑agers increased. Besides the anti-‐‑aging supplements, TEBwill also offer anti-‐‑aging fresh drinks on-‐‑site to match with different consumer needs.
Premium Brands Aspiration Middle and high-‐‑income demographics in Vietnam always aspire to premium brands as they believe premium products offer superior quality compared to mass products (Euromonitor -‐‑ Skin Care Vietnam, 2013). Brand image was another factor that made consumers opt for premium brands, whether they could afford them or not. Together with rising living standards and increasing disposable incomes, consumers are very likely to shift from mass to premium brands. This is the potential for TEB to introduce premium beauty supplement brands such as Shiseido Collagen drinks and powder. According to Consumer Health Report – Vietnam (Euromonitor, 2013), top sellers of the functional food and drink for beauty (e.g. skincare supplements) are brands that consumers are most familiar with. For instance, the constant advertising from direct sellers such as Amway Vietnam Ltd and Herbal Life Co Ltd were also significant factors, which stimulated consumer demand for these types of products, stating “Prevention is beler than cure” to persuade Vietnamese consumers to try purchasing vitamins and dietary supplements. Furthermore, the flexibility and convenience of these types of functional foods and drinks are resonating well with the hectic lifestyles consumers lead today (Nutraceutical World, September 2013). Additionally, consumers also view organic and natural food as the foundation for health and wellness lifestyles (Hartman Group, 2010), which gives huge potential for X’s on-‐‑site fresh food and drink for beauty.
16
BARR
IERS
TO
EN
TRY
The skincare industry in Vietnam is highly competitive. The industry is characterized by a large number of firms both local and international that alempt to differentiate their products by maintaining a certain degree of control over their pricing and emphasizing uniqueness of its products or services to create profit. However, skincare supplements particularly remain under the strict management of the government agencies for being classified as special food—“functional food.” Therefore, there is relatively high barriers set up by the highly-‐‑regulated structure of the administrative governments.
Government Regulations a. Registration: Skincare supplements under Vietnam Food Law 2013 results in lengthy import customs, especially for high-‐‑profit margin products coming into the country. “Functional food means a food used to support a function of the human body, relax the body, boost the immunity against diseases, including supplements, health protection food and medical nutritious food”. Listed under this special type of food, skincare supplements require additional documents indicating status as both “package food” and “functional food” as follows:
Certificate of Analysis (CA): Product Specifications of the manufacturer or a Certificate of Analysis (CA) relating to principle quality and safety standards of the food issued by the manufacturer or an independent testing agency of the country of origin. In case the CA is not available, a CA issued by competent testing agencies in Vietnam is accepted. Product label: Product label (or its photos) and draft content of the Vietnamese label (with the trader’s company'ʹs stamp); labeled samples (if requested for testing). Notarized copy of one of the following certificates (if any): Good Manufacturing Practices (GMP); Hazard Analysis and Critical Control Points (HACCP); or an equivalent certificate.
An additional required document is the Result of Clinical Tests/Health Claims (or reference documents) on application of such foods to safely improve the health of targeted users.
17
b. Advertising of Skincare Supplements The Ministry of Health also tightened the food advertising laws. Under the Circular 08/2013/TT-‐‑BYT dated March 13, 2013 (Circular 08), all beauty supplements must be registered (VietnamNews, 2013). Along with the prohibited acts under the Law on Advertisements, Circular 08 provides for several special prohibited acts. Examples include advertising in the form of articles wrilen by doctors, pharmacists or medical workers claiming that certain food can treat diseases; and using the images, reputation and documents from health agencies and medical workers, and gratitude lelers wrilen by patients to advertise foods. Organizations must submit their dossiers in accordance with Article 6 of Circular 08 to the Viet Nam Food Administration, resulting in a longer administrative process and more lobbying. To overcome the above barriers, TEB may choose an intermediary such as a functional food import / export company to handle this process. Additionally, TEB will only select brands with sufficient documentations (from manufacturers, certificate of quality from the MOH of supplier’s countries, etc.) to minimize the hassles. Another solution would be partnering with existing domestically-‐‑produced functional food companies for some basic and affordable products or raw food & drink ingredients.
Limited Premier Retail Space According to CBRE Q3 2013 HCMC report, retail space in non-‐‑commercial building has no new supply and future supply is limited due to the shortage of land in the business district. However, F&B and convenience stores, which provide basic needs, still remain active. This leads to a small shortage of retail space in prime locations such as Phu My Hung. TEB will start-‐‑up with small retail space but in prime locations, while also offering free delivery service and corporate discounts to employees in central districts with regular order and bulk orders of beauty light meals to maintain profit. Further details of the solutions will be discussed in the operation plan.
Economy of Scale Large beauty companies focusing on import skincare products are able to leverage the economies of scale in sourcing and logistics, minimizing transaction costs by importing and distributing in bulk and reducing the input cost through long-‐‑term contracts with suppliers. This may be unavailable to small companies like TEB. Large beauty companies also have greater access to financial instruments by obtaining lower-‐‑interest rates when borrowing from banks than a smaller firm. The cost of advertising spreading over a greater range of media and product categories is also possible within larger skincare companies. Even though there is no definite way to overcome this problem, small-‐‑scaled businesses like TEB can start with the minimum capital (physical and human) and continuous reallocation of resources to achieve efficiency, take advantage of social media and word-‐‑of-‐‑mouth, and carefully forecast sales and profits to indicate reasonable costs for the first few years. 18
The Availability of 100% Made-‐‑in-‐‑Vietnam Collagen Drinks This year 2014, the company called T&T Collagen Drink Vietnam launched the first collagen drink market 100% made-‐‑in-‐‑Vietnam under import ingredients of Rousselot – leading producer of Gelatine and Hydrolyzed Collagen for global cosmetics companies. This is the first time Vietnam can manufacture RDT collagen drinks. Their products aims at an affordable segments of 12,000 VND (0.6 USD), claimed as “customized to the absorption level of Vietnamese consumers”. Their products are distributed similarly as other non-‐‑alcoholic beverages in regular supermarkets or grocery stores with high accessibility to consumers (T&T group, 2014). Despite all of these, X’s pricing is much more premium, and our extra values of TEBexclusive retail place can differentiate TEBfrom this massive collagen drinks. However, TEBshould pay alention to the growing of this company in the case they develop premium versions of Collagen Ready-‐‑to-‐‑ drink (RTD), leveraging their economy of scale, and compete in the same market segment as ours in the future
19
BARR
IERS
TO
EN
TRY
Competitor Analysis
20
The below map shows TEB ’s strategic region of this business plan. Firstly, the central plots in red are TEB’s target market i.e. grade A office buildings, located in the most central part of District 1. The plots in yellow are competitors in pharmacy category, which spread across other districts, and surround district 1 of Ho Chi Minh City. The green plots are high-‐‑end healthy drink shops, which all located in the south Saigon District 7, Phu My Hung. Particularly, the transparent yellow area has the largest coverage across TEB strategic area is the territory of direct selling companies.
21
Co
mp
etit
ors
in S
kinc
are
sup
ple
me
nts
Direct Selling of beauty and personal care products This category exhibits the strongest competition because of their intensive multi-‐‑-‐‑-‐‑level marketing system and distribution network through peer preferences. Their strength lies in recruiting relatives, friends and colleagues to be in their network of professional sales representatives, which highly influences the buying decision process of our potential customers. Furthermore, these companies are all foreign invested with huge budgets for advertising and PR as well as a global presence. Their products are also considered high-‐‑-‐‑-‐‑quality and at higher prices than the market average. They also target similar consumer segmentations, who are primarily female office staff. In order to overcome these competitor strengths, TEB must analyze in detail what our competitors are selling specifically, how they position themselves to alract consumers, and what TEB can do to outperform these competitors.
Amway Vietnam Ltd Amway Vietnam Ltd retains its leadership with 33 million USD, equivalent to 11% value share in vitamins and dietary supplements in Vietnam in 2012. Its private brand Nutrilite has a diverse product portfolio of vitamins and dietary supplements. In 2012, Nutrilite was considered the best-‐‑-‐‑-‐‑selling supplement for women office staff members who were concerned about their health and beauty. Each box of Nutrilite (60 -‐‑-‐‑-‐‑100 capsules) can be consumed within one month and costs around 14-‐‑-‐‑-‐‑17 USD. However, through the analysis of Amways’ product portfolio, it is clear that Amway positions Nutrilite as general health supplements for women, rather than as skincare. Leveraging this, TEB will position ourselves as a beauty-‐‑-‐‑-‐‑centric retail boutique, directly targeting specific skincare concerns of female office staff. At the same time, TEB will not compete with Amway or their professional representatives. Instead we will invest in added values at our physical retail environment, which nurtures a sense of community for female beauty and professional expert advice from real doctors and nutritionists.
Amway Nutrilite product line
22
Co
mp
etit
ors
in S
kinc
are
sup
ple
me
nts
Herbalife Vietnam Ltd In 2012, Herbalife Vietnam Ltd recorded the biggest increase in value sales in 2012, of which 44% is due to its good reputation in herbal/traditional products. The company aims to build a strong brand name in the country by investing in sponsorship for Vietnam sports teams during the period 2012-‐‑-‐‑-‐‑2016, as well as selecting Ms. Vietnam and Ms. Vietnam Universe to be their celebrity spokespersons. Their products in the supplement categories include Herballife’s Healthy Meal set: weight-‐‑-‐‑-‐‑gain or weight-‐‑-‐‑-‐‑loss can be consumed in one month and is priced at 1.2-‐‑-‐‑-‐‑1.5million VND (60-‐‑-‐‑-‐‑75 USD); Herbal Tea concentrate for weight-‐‑-‐‑-‐‑loss aid and anti-‐‑-‐‑-‐‑ oxidant/ anti-‐‑-‐‑-‐‑aging for 26 USD, or at a discount price at 19 USD; and Herbal Aloe concentrate for healthy digestion, which improves nutrient absorption & antioxidants for 16-‐‑-‐‑-‐‑19 USD. Overall, their products target weight management only. TEB will invest in branding as a specialist in skincare supplements and beauty F&B. Therefore, we will not overlap with their territory regardless of their intensive advertising and promotions.
Herballife Promotional Campaign with Ms Vietnam Huong Giang
23
Co
mp
etit
ors
in S
kinc
are
sup
ple
me
nts
Pharmacies TEBconsiders western-‐‑-‐‑-‐‑style pharmacies to be the main competitors since the survey results show that this is the most popular channel for consumers to buy beauty supplements. This channel is also considered the mainstream distribution and selling point for skincare supplements in Vietnam as reported in Euromonitor Vitamin & Supplement Vietnam in 2013. The majority of pharmacies in Vietnam are the small and medium sized pharmaceutical stores, which significantly account for two-‐‑-‐‑-‐‑thirds of medicine (including beauty supplements) distribution and consumption in Vietnam (Pharmaphorum, 2013). Most pharmacies in Vietnam are owned my local companies because foreign companies are not allowed to distribute products themselves. These local pharmacies are considered to have the highest variety of brands, both local and international. The price ranges also vary from low-‐‑-‐‑-‐‑ generic to highly-‐‑-‐‑-‐‑expensive, depending on the drug brands and their availability on the market, which may overlap with X’s product offerings. Therefore, it is wise to study them in order to define our niche. My Chau pharmacy ® My Chau is the most popular destination for Vietnamese consumers when it comes to western medicine (including beauty supplements). By focusing on selling the largest variety of prescribed and OTC medicines– local and international brands include beauty supplements that are 5-‐‑-‐‑-‐‑20% cheaper than the market price−My Chau pharmacy chains alract price conscious consumers . The pharmacy chain also aims to increase customer loyalty through free-‐‑-‐‑-‐‑delivery service and online and via-‐‑-‐‑-‐‑phone pharmacy consultancy. They have a wide customer range with different income bands, but mostly Vietnamese locals. My Chau has endless capability to import a large variety of beauty supplements, which may overlap with X’s product offerings. The challenge of TEBis not competing in price with these retailers, but how to convince consumers to come to our boutique even when the pharmacies offer similar products at slightly lower prices. Since these pharmacies do not position themselves as skincare supplement specialists and their retail environment is very basic (in order to keep the pricing lower than the market average), this is where intangible values to the retail space and customer service play the vital roles of X’s existence.
24
Co
mp
etit
ors
in S
kinc
are
sup
ple
me
nts
Pharmacies Luke'ʹs Pharmacy Luke’s Pharmacy is an upscale pharmacy chain, strategically located in high-‐‑end residential compound Phu My Hung; within luxury condo compleTEBSunrise City (5 minutes drive to Phu My Hung); and 33 Thao Dien St., Thao Dien ward, District 2, Ho Chi Minh City, a popular residential location for expats and high-‐‑-‐‑-‐‑income locals. Their prices are 10-‐‑-‐‑-‐‑15% more expensive than the other local pharmacies. They will compete with TEBin providing genuine functional foods and premium-‐‑-‐‑-‐‑imported skincare supplements at the doorstep of high-‐‑-‐‑-‐‑income residential consumers. Medicare VN Ltd Medicare VN Ltd is a modern pharmacy chain with 18 outlets in Ho Chi Minh City spread over Districts 1, 2, 5, 6, 10, and 11. These stores often alract consumers who seek convenience and imported beauty products. Additionally, they have a two-‐‑and-‐‑a-‐‑half floor building of approximately 1500 square meters resembles a small department store (254bis, Tran Hung Dao, District 1), selling beauty and personal care such as bath and shower products as well. Their price are 5-‐‑-‐‑10% more expensive compared to the average of local pharmacies and supermarkets. The company defines their value as “Life Style Supermarkets” (Medicare.com.vn), and they claim to provide customers with “an endless amount of choices today.” For all the factors discussed above, TEBconsiders Medicare ® a competitor due to their locations in districts 1 and 2.
Luke’s pharmacy in Sunrise City, district 7, HCMC 25
Co
mp
etit
ors
on
hea
lthy
foo
d a
nd d
rinks
Since TEB also sells fresh healthy drinks, it is necessary to analyze the related modern retail environment to
consume these types of healthy drinks such as existing smoothie and juice businesses. Please note that for healthy light food, currently there are no quick-‐‑-‐‑-‐‑dine healthy food retail outlets. Most quick dining belongs to unhealthy fast food chains and kiosks in department store food courts. Healthy foods are served at regular restaurants/dining places. Therefore, only smoothie and juice shops will be discussed in this section.
Smoothies Factory Phu My Hung Located at 201 Ton Dat Tien Street, Panorama, Phu My Hung, District 7, this shop was advertised as originating from the US with an American style of “blending nutrition with taste”, for example Cranberries Crush, Energizer, Green Tea shots, Immune Booster, Bulk Upper (with weight-‐‑-‐‑-‐‑gain formula), and Light Delight smoothies. Fresh squeezed juices and YoCream® frozen yogurt contains health benefits such as calcium, protein, and potassium. Their average price ranges from 65-‐‑-‐‑-‐‑75-‐‑-‐‑-‐‑85,000 VND ~ to 3.5-‐‑-‐‑-‐‑4.5 USD per serving, yogurt for 25,000 VND / 100gram. Most customers are teenagers or young couples who want to try something new as well as for those who want a decent casual place to gather with friends. However, the opportunity for this competitor is closing since consumers recently reviewed that they may not come back because the taste is unusual and overpriced. TEB must learn the mistakes of this competitor to provide beler products and service offers.
26
Fun Fruit World Located at SC04 Mỹ Đức, Nguyễn Đức Cảnh, Tân Phong ward, Phu My Hung, Fun Fruit World sells freshly-‐‑-‐‑-‐‑made juices and smoothies; at the same time, the store spends 50% of its space for retailing of fresh fruits. Thus, some customers complained that their seating felt cramp because of the fruit displays. However, this brings a more organic feeling to the retail environment, especially with the wooden furniture and green decorations. Customers reviewed this place as more reasonable than most of the F&B in Phu My Hung with prices ranging from 30,000 -‐‑-‐‑-‐‑ 60,000 VND ~ 1.5-‐‑-‐‑-‐‑3 USD. Some customers indicated the taste was so diluted due to this price range, e.g. a lot of water mixed in with ice, too sweet, consumers can barely enjoy the real fruit taste. Customer service is not consistent, as sometimes the cashier gave customers a cold look. TEB studied the retail environment here as a reference to set up our boutique. Overall, besides the above high-‐‑-‐‑-‐‑end healthy drink shops in District 7, there are none in District 1, where our main target market is located. Furthermore, there are many upscale drink shops in central district 1, such as Coffee Bean and Tea Leaves, Starbucks, Highland coffees and many more, but all of them focus on selling coffees in an informal business environment, in addition to selling shakes and juices. Based on our observation, most of these places are either business-‐‑-‐‑-‐‑related with more male guests than women guests, or general casual get-‐‑-‐‑-‐‑together spaces. None really serve beauty F&B for female customers with specialist purposes. This is the niche opportunity for TEB to leverage.
27
Market Analysis
28
Ma
rke
t de
scrip
tion,
Siz
e a
nd T
rend
s Our target market are the employees of large corporations located in central business districts in Ho Chi Minh,
especially the staff members who often work in the dried and enclosed AC office environments from 9 to 5. This body is made up of approximately 240,000 white-‐‑-‐‑-‐‑collar workers with gross income from 30,000,000 VND per month ~ 1500 USD, of which 57% are female staff (Ministry Of Planning And Investment General Statistics Office, 2012). This is also consistent with our primary survey results (figure above). However, in the first years of launching, TEBwill only target female segments of this market, approximately 136,000 people, particularly those with offices located in grade A office buildings. This area is also known as the busiest, most prosperous area of district 1 or the entire city.
Target Market : Gross Monthly Income in Vietnam Dong
In order to estimate TEBsales in the first year, TEBbenchmarks two luxury retails in district 1, which is Quo Vadis Luxury winery & dining and L’an Mien café located in New World Hotel CompleTEB-‐‑ AB tower near Ben Thanh market. Based on the Mr. Kenny Nguyen and Mr. Dang’s opinions, owners of the two retails above, TEBaims to target 408,000 USD in sales in the first year. TEBfocus 50% sales on beauty supplements, and 50% sales from dine-‐‑in soups and drinks. According to Euromonitor – Vitamin and Supplements Vietnam in 2013, the best-‐‑-‐‑-‐‑selling beauty supplement brand in Vietnam is Angel Life Spirulina (seaweed), selling at an average 550,000 VND ~ 22 USD, per 100-‐‑-‐‑-‐‑capsules a bolle per month. This denotes the consumer’s moderately high purchasing power compared to their income. Take an average price of 20 USD per beauty supplement products, TEBaim at selling 850 beauty products per month, making up 17,000 USD per month. Applying the same 17,000 USD sales on F&B, therefore, TEBmust sell 142 servings per day, each priced at average 4 USD. This price is the most appropriate to convince consumers to spend the same amount of money that would be spent at similar high-‐‑-‐‑-‐‑end drink shops, but for extra benefits on their beauty and more. TEBaims to grow this sales figure annually by expanding the business to the prosperous districts 2 & 7, as well as nation-‐‑-‐‑-‐‑wide, plus systemize our distribution and product/service quality management to make TEBthe top choice for office staff when it comes to edible and drinkable skincare products.
29
The below map shows the 12.5 kilometer square covering the highest concentration of grade A office buildings. These buildings include Diamond Plaza, Kumho Asiana, Vincom Center, Metropolitan, Sunwah Tower, Bitexco Financial Towers, Saigon Center and Saigon Central Tower, Melinh Point Tower, and Vietnam Petro tower.
30
Market Readiness: Demographics, Lifestyle & Psychographics
Employees working in grade A office buildings in district 1 represent an alractive market, perfectly matched for TEBas it represents the most modern business environment, professional lifestyle, and the most potential target groups to adapt regular use of beauty supplements and beauty F&B. This target group, with ages ranging from 26 – 44, resembles managerial-‐‑-‐‑-‐‑ level employees with more than 4 years of experience in the workforce (Figure 11). They are likely to earn more income than new graduates. They work under high pressure to climb up the corporate ladder. Because they are either reaching or passing their 30s, they pay the highest alention to skincare to maintain their youthful beauty and professional appearance.
Target Market: Age group
31
The survey indicates consumers top 3 skincare concerns are 1) reduce aging signs, e.g. smooth out wrinkles, 2) Prevent the sign of aging e.g. prevent wrinkles early, and 3) Moisturizing & hydrating (Figure 12). Thus, X’s opportunity is to offer products highly targeting the above skincare needs to appeal this consumer group. One interesting fact is that Vietnamese consumers do not treat fortified/functional food and drinks as substitutes for supplements. This is the potential for TEBto sell beauty F&B as well as skincare supplements to the same customers to increase profit. Employees in grade A office buildings work in the most modern environment of the economic hub of the nation. The target consumers are very savvy consumers who can influence each other’s purchasing decision through peer recommendations and personal sharing. The primary survey conducted in the major offices shows 86% of respondents get information about beauty supplements through female friends, colleagues, relatives and family (Figure 13). Therefore, word-‐‑-‐‑-‐‑of-‐‑-‐‑-‐‑mouth is a powerful tool to communicate with this segment. The results also indicate that this group prioritizes products with high efficacy and brands that they are familiar with, and pricing is not a big concern (Figure 14). Therefore, TEBhas the potential to emphasize the products showing strong results, premium well-‐‑-‐‑-‐‑known brands, and community sense in our retail environment to alract this target group.
Target Market : Top skincare concerns
32
Market Readiness: Demographics, Lifestyle & Psychographics
Target Market : “Which media channel do you MOST often visit for beauty tips and updates?”
Target Market : “How important is each criteria below when buying a skincare product (0 -‐‑ 100)?”
33
TU ES BELLE offers take--‐home premium skincare supplements, but also provides light, fresh and healthy on--‐site meals for skincare with shown potential for affecting consumers’ needs for anti--‐aging, moisturizing and hydrating. Not only does our company sell tangible products (beauty supplements and beauty F&B), we also provides consumers with the most modern retail environment, where female consumers can indulge in a cozy community sense with their colleagues. Our boutique is also conveniently and exclusively located in the center of District 1, at the doorsteps of their offices for easy accessibility. This environment later grows into an offline beauty forum for female office staff, where they can relax and share beauty tips and opinions while at the same time receive expert advice from our management teams of nutritionists and doctor.
VALUE PROPOSITION
34
35
Marketing
36
What TEB sells is a hybrid of skincare supplements and fresh beauty F&B in a relaxing and cozy environment. Based on the primary survey results of top skincare concerns, TEB has categorized our portfolio with the majority of products for anti-‐‑aging, the rest are for skin moisturizing and general beauty.
Anti-‐‑Aging This anti-‐‑aging subcategory is the largest portion , which is 50% of our business. Within this, anti-‐‑aging supplements and F&B for anti-‐‑aging equally share the importance in our product assortment. Particularly in anti-‐‑aging supplements, consumers can easily find high-‐‑end brands such as Shiseido, Kanebo and L’Oreal beauty supplements on our shelves (Figure 17). TEB boutique most carefully selects these brands since they are already well-‐‑known to the Vietnamese consumers to lessen the effort in educating consumers to use new brands. Furthermore, TEB aware that Collagen supplement is world’s most advanced ingredients in order to help skin look younger. In our store, TEB will focus on selling the highest variety of collagen products in three forms such as pills, powder, and ready-‐‑to-‐‑drink (RTD). Some collagen products TEB will sell are Shiseido Collagen pills can be taken conveniently 4 tablets, 2 times per day with water. TEB also has Meji Collagen Powder to mix with any juices/flavored drinks for easier consumption. Besides, consumers can choose the utmost convenient collagen bolled drink Collagen Drinks 10,000mg Marine. In addition to Collagen supplements, TEB also offers anti-‐‑ageing products with coenzyme Q10 e.g. Kanebo Evita50 Q10, which functions as an antioxidant, produce energy your body needs for cell growth and maintenance and protects the body from damage caused by harmful molecules. For further lists of our products, please refer to Exhibit 1. For fresh Beauty F&B, TEBalso understand the consumer perception of certain food and drink ingredients with anti-‐‑aging benefits. There are plant-‐‑based food and drinks offer nutrients that fight free radical damage and diseases, hydrate, and keep the body looking and feeling younger from the inside out. For instance, some food and drinks TEB provides are rich in fiber, minerals, and the vitamins A, C, E & K like fresh blueberries, seaweed, green tea etc. In our menu, consumers will find Anti-‐‑aging X Berry and VitaC boost, anti-‐‑oxidant Green tea and seaweed soup.
PRO
DU
CTS
37
Figure 20: Anti-‐‑Aging F&B selling in TEBstore; from left-‐‑right: seaweed soup, Glowing Green, TEBBerry smoothies
Figure 19: Anti-‐‑Aging supplements selling in TEBstore (from left-‐‑right : RTD Shiseido Collagen, Kanebo Q10, Inneov by Loreal)
38
Moisturizing & Hydrating Most anti-‐‑aging supplements already have cross-‐‑functional benefits of skin moistening. However, TEB does offer specific products targeting dry skin from inside out. For instance, omega-‐‑3 is known to create a natural barrier to help retain moisture, as well as Vitamin A, E and B. Some research suggests snacks that have vitamin E in addition to omega-‐‑3s, such as nuts and whole grains, provide an extra skin booster. These beauty supplements and beauty snacks can be conveniently found in our shelves under Moisturizing & General Beauty subcategories. At the same time, consumers can receive the same moisturizing effect through our fresh F&B menu. Some of the moisturizing drinks are Glowing Skin green smoothies, Beta-‐‑carotene Rich juices, Flawless Avocado, Smoothing Cucumber and Pineapple. The HYDRATING gazpacho/ pumpkin soup and NORISHING Sesame soup also have the same effect. This moisturizing & hydrating subcategory (both supplements and fresh F&B) represents 30% of our business.
General Beauty This section is the rest 20% of our business. Beautiful skin should come from holistic healthy body and mind. Therefore, besides the anti-‐‑aging, moisturizing, TEB also have other general beauty supplements and F&B, which ranges from daily vitamin supplements, to detox & cleansing, energizing, calming etc. to cater every need of consumers. Customers can visit our boutique simply for a short break from stressful corporate environment with our Relaxing Lavender tea and wrap some Calming lotus soup and beauty snacks. Depending on our sales of specific products, we will adjust our stocking accordingly. For full lists of our products, please refer to Exhibit 1.
PRO
DU
CTS
39
Pricing In reference price to the price of best selling beauty supplement Angel Spirulina (Euromonitor, 2013), as well as our the customers’ spending estimates price point moderately premium. Few exclusive products and most premium are priced at 1,100,000 VND as ceiling price. The majority of anti-‐‑aging supplements are priced at 880,000, particularly for the well-‐‑known Japanese premium brands such as Shiseido and Kanebo. However, TEB also offer anti-‐‑aging products at opening pricing as low as 350,000 VND to encourage consumer trials. These opening priced products are often in smaller quantity package or domestically produced such as Royal Jelly Honey at 350,000 VND ~ 16USD. We also offer snacks and beauty candies for impulse buy at the checkout counter priced at 1.5 to 3.5 USD. For beauty F&B, TEB also benchmarked high-‐‑end drink shops around the district 1 area for Perceived-‐‑value pricing. The average 4USD per serving is critical to lead customers to try the product; with the same price of regular drinks, customers can have extra beauty enhancing benefits when choosing our boutique. Specifically, food and drink with anti-‐‑aging benefits will cost the most, at above 4-‐‑5 USD. For others, there will be ranged from 2 -‐‑3 USD. With monthly “subscribe and save”, customers will save 5% off the entire cost for regular orders applied both to beauty supplements and F&B. Additionally, all subscribers will receive extra reward points of 1000VND ~ 1 points, which they can use to convert into product coupons. These encourage customers to order regularly and enhance customer loyalty.
PRIC
ING
40
Our Boutique Environment When customers visit our boutique, they will feel indulge in the cozy, relaxing environment. Customer will find our menu as well as product display, mimicking the spa course treatment of anti-‐‑aging, skin moisturizing & hydrating, and more (these are the top skincare concerns obtained from our primary survey as well as Euromonitor Skincare report Vietnam 2013). TEB also benchmarks other premium retail outlets to offer the fastest, most accurate order processing for customers. TEBcan also take order at our boutique and delivery directly to customers’ office location for their convenience. We also have professional skincare consultancy from our management team as well as hosting beauty events to best interact with our customers. All the events will be held at our exclusive premium retail space. Because our main target are employees at all grade-‐‑A office buildings in central district 1, the company will base its retail location in central district 1. TEB will negotiate for a retail space of 20 TEB19 square feet in Kumho Link (right next to Kumho Asian Building). This location will be at the doorstep of our target market as well as within walking distance from other surrounding office buildings. This location also has high exposure for our brand since other F&B are located in the same area, where office staff often come for lunch breaks or short tea breaks. Besides the physical space, TEB also offers online forums to keep high interaction with our customers. Detail of this online forum will be discussed in details in the Promotion Sections.
SERV
ICE
& P
LAC
E
41
42
Company Image/ Market Message Tu es Belle -‐‑-‐‑ “The exclusive forum for office beauty” The company not only sells nutricosmetics and beauty F&B, but it also aims to build a strong beauty community of female professionals working in large corporations. By building an interactive marketplace (online forum & retail space), our company wants to support modern women, who want successful career without having to sacrifice their beauty. Overall Objectives To maximize our exposure at the same time, minimize marketing expense since TEB is a small startup. TEB try to lessen our promotion expense by leveraging our key connections with HR departments at large corporations in grade A office buildings since they manage the human assets of our target market. TEB aims to build its reputation via continued educational/promotional events for nutricosmetics organized by experts from local and international networks. At the same time, these events will bring customer reviews and feedbacks for continuous improvement of our beauty community. The total budget for the first year is 8000 USD. The event plans and first year budget breakdown will be discussed in the next section.
PRO
MO
TIO
N
43
44
Marketing Vehicles TEB is strongly aware of our core competence as a community forum for female office staff. Therefore, we always aim at generating the best environment for our customers to exchange their beauty opinions, review and nuture their beauty. TEB customers are its collaborators, the critical members of our interactive community. In order to develop this community, TEB has developed the following marketing plan with three parts. Part 1: Products and Service trials Based on our primary survey results, efficacy is among the top 3 criteria when choosing a skincare product. Therefore, the objective is to prove strong results of our products and receive early feedback in preparation for the official launch. TEB will start with product trials for the opinion leaders by carefully selecting 5 female professionals in our target market, who have strong influence on the purchasing processes of other female co-‐‑workers. They must be of senior management level in the corporation and well-‐‑known for taking good care of their skin. By convincing this group to try our beauty F&B for free for one month. This incurs total cost of 5,000,000 VND (1,000,000VND for each month of each opinion leader trial). In return we will in turn receive their accurate reviews about our products and service effects on their skin. The positive reviews will be shared in our promotional/educational materials. TEB will then fine-‐‑tune products / services from all the feedbacks and prepare for the official launch. Part 2: The Grand Opening This grand opening event is aim at creating the momentum and buzz for TEB to reach the target market. On the opening day, TEBwill offer the free seminar “Skincare From Within: Anti-‐‑Aging Through Food And Drinks” organized by our doctor and nutritionist for skincare nutrition. Alendees will have a chance to win a Grand Prize of TEB beauty F&B products for in three month, and additional VIP 10% off any purchasing for an entire year. TEB estimates the budget for this around 5,000,000 VND ~ 240 USD. Each guest in this event will get a free gift bag, with random surprises including 30,000 VND coupons to purchase any product in our boutique on the opening day. With 30 coupons offered, the cost total cost for coupons will be 900,000 VND ~ 45 USD. To launch successfully, TEB will need to create teasers from for the event, initiated by worth-‐‑of-‐‑mouth from HQ Brilish American Tobacco and ANZ bank located in Kumho Asiana office building. Our company chose this building because of our strong relationship with its existing network of HR staff, who have friends and colleagues working in the surrounding building, to spread the news about this event through word-‐‑of-‐‑mouth.
PRO
MO
TIO
N
45
Part 3: Continuous Interactive Events to develop the Beauty Community In order to gradually build a strong beauty community, TEBwill initiate weekly blogs, monthly events and promotional contests from the beginning in October (aligned with Vietnam Women’s day on 20th Oct), Weekly beauty blogs are conducted and open for our registered members on our online forum. Each week, the management and the community will select one blogger who has shared the most helpful beauty skincare tips in the office. The winner is the one who has highest votes by the management and “liked” the most by the community. The winner will receive an extra month of our free beauty F&B products (value $48 ~ 1,000,000 VND). Therefore, the budget for the first year of this weekly blogging activities will cost around 48,000,000 VND. TEB will keep track of the blogging winners to make them our advocacy to lead our customers’ opinions. While this is an online space for our customers to exchange beauty tips and advice, TEB will also be able to manage our customers’ expectations and receive their suggestions to create monthly events tailored to their needs. Monthly events will be launched in X’s retail space, the sought-‐‑after location for educational skincare programs hosted by our experts and beauty gurus. The best beauty bloggers are invited as guest speakers in this event series. Monthly events are based on themes extracted from the weekly blogs mentioned earlier. Promotional Contests are where TEB will seek collaboration with reputable cosmetics brands and beauty magazines for sponsorship or free advertising in our events. At the same time, we will emphasize the premium position of TEBin the consumers’ mind when associating with high-‐‑end brands. These contests can be held simultaneously with other monthly activities.
46
Customer Loyalty Based on the interview with Mr. Dolev Sunshine Sadan, Business Development Manager for Thanh Bac Fashion Group, Vietnamese consumers are very online savvy, they will search for products online first, share their opinions with friends, and later make purchasing decisions at a store. According to Vietnamese Consumer Pocket (Neilsen, 2013), Vietnam is among the top countries with the highest usage of smartphones. Therefore, leveraging this smartphone savvy, we will build free apps for our social media users (linked with our website) for friends referral programs. In this friend referral program is where each referred friend, customer will receive a 30,000 VND coupon for their next purchase, as well as a complimentary Drink of Surprise (delivered directly to their office for free). Each positive result shown from our customers and their friends will be posted in our online forums and at our retail space. Estimated spending for the Referal Program (including Drink of Surprise) will be around 30,000,000 VND. Exclusive members receive a promo code as a privilege for TEB core customers via their email. Our online forum will have periodic sales section, exclusively “private” for our members only. New guests are encouraged to register on the forum to receive info about private sales event at our boutique. These will generate new customer trials, sales leads and loyalty to our business. We will not sell discounted products in our store. Only members invited to our private sales events will be able to purchase items with discounted price at the boutique. Doing this, TEB can keep our premium positioning and still be able to liquidate our inventory when needed. We will hold 4-‐‑5 private sales per year, with estimating cost will not exceed 8,000,000VND per sales event. The following is the breakdown of all marketing activity budget for the first year.
PRO
MO
TIO
N
!"#$%&'()*+,-%(.%*/%"#*0**
12&'3'&'%.**
45"(&'&6*78*-#797*788%#.** :7.&*78*%"2;*788%#* <59*
=#7>52&.?<%#3'2%*@#'"A** B* *0CDDDCDDD** *BCDDDCDDD**E-%('()*<%9'("#F*:75-7(.** GD* *GDCDDD** *HDDCDDD**E-%('()*<%9'("#FI#"(>*=#'J%** 0* *BCDDDCDDD** *BCDDDCDDD**K%%$A6*-#'J%.* LM* *0CDDDCDDD** *LMCDDDCDDD**!7(&;A6*<%9'("#* 0N* *0CBDDCDDD** *0MCDDDCDDD**=#797&'7("A*:7(&%.&** N* *MCDDDCDDD** *0OCDDDCDDD**P%8%##"A*=#7)#"9.* BDD* *GDCDDD** *0BCDDDCDDD**Q#'($*78*<5#-#'.%** BDD* *GDCDDD** *0BCDDDCDDD**=#'3"&%*<"A%.** B* *MCDDDCDDD** *LDCDDDCDDD**
* *!"#$%&'()*+,*& &-./01220222&&
! 47
48
Other marketing collaterals
49
Boutique layout
50
Operation
51
Location TEB locates in Kumho Link, 2nd floor (retail space in the proximity of 2km square of our target market). Our office will locate in existing X’s founder residential district 7 to eliminate office rental cost. At the same time, our location in district 1 is central, easily accessible for distributors, convenient to work with government entities such as District 1 Tax and Food Safety Agency. Based on the approximate asking rent for this area, 40 square feet retail will be around 2000 USD per month.
Equipment We will need to invest in 3 industrial juicers (3,600,000VND/each), 3 Smoothies machines (2,400,000 VND each) and 1 freezer (8,500,000 VND) as well as 5 soup cookers (1,900,000 each) and 2 microwaves (990,000 each) to make fresh beauty F&B. Beside, TEBalso need an on-‐‑site product packaging for take-‐‑away products cost around 1,500,000 VND per month. All are available by local electronic distributor.
LOC
ATI
ON
& F
AC
ILIT
IES
52
Computer Hardware & Software needed TEB will need a strong IT team to manage our online forum and social media, as well as customer-‐‑based systems. We will try to keep our office set-‐‑up cost low by out-‐‑sourcing this IT to an external party. Using FPT business partner, each month we will pay approximately 8,000,000 to 10,000 VND ~ 499 USD.
Customer Service Our interviews with all business owners in District 1 shows that customer service is among the top priorities, besides location. However, customer service in Vietnam has often been rated poorly due to politeness of staff and ordering speed etc. Mr. Dang, owner of Le’ AnMien premium café & dining in district 1 suggest that employees must be well trained, knowledgeable, polite and prompt to any requests by guests to represent the premium business. Since we are the exclusive and hi-‐‑end boutique, X’s staff should be utmost professional to cater every need of our guests. For our online website and forum, TEB will set up in-‐‑depth FAQ. Additional information will be contacted via email. TEB also designates two employees for online content management of our forum. We will also allow customers themselves to join our team as liaisons to moderate and facilitate this interactive channel.
53
LOC
ATI
ON
& F
AC
ILIT
IES
Warehousing & Logistic Since TEB is a small boutique, replenishment process will be done manually; inventory investment will be kept minimal. The lead time to import beauty supplements from Japanese, Korean and China lead-‐‑time will be 5-‐‑7 days via a professional import/export company as recommended by Ms. Van, owner of MOF Japanese premium café & dining in district 1. For other products from Europe or the US, it may takes up 2-‐‑3 weeks, depends on the bulk order of the import/export companies. TEB will based on the subscription order to estimate the number of products in advance to order from our suppliers. Leveraging our distributor warehousing, we will hold no inventory in place, and keep enough to display our products and maximize every square meter for guest visits. For fresh ingredients, TEB chose CoopMart (the largest raw material suppliers for major supermarket chains in Vietnam) to supply daily ingredient to keep our product fresh and healthy. Coopmart is very flexible with their order policy, and require only 2 days in advance to secure the amount ordered. The following is the estimate breakdown of X’s operation budget for the first year.
LOC
ATI
ON
& F
AC
ILIT
IES
54
Financials
55
CASH FLOWS
Month: Pre-Start 1 2 3 4 5 6 7 8 9 10 11 12 Totals Receipts
Cash sales 6,848 8,139 10,273 10,550 10,099 8,659 9,131 9,339 9,074 10,088 10,249 10,687 100,877 New equity inflow 0 0 1,000 0 0 0 0 0 0 1,000 0 0 0 2,000 Loans received 14,500 0 0 0 0 0 0 0 0 0 0 0 0 14,500 Other 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Total Receipts 14,500 6,848 9,139 10,273 10,550 10,099 8,659 9,131 9,339 10,074 10,088 10,249 10,687 129,636
Payments Cash purchases F&B Ingredients 500 623 727 935 977 909 805 831 862 867 930 909 930 10,806 COGS for supplements 0 2,020 2,468 3,029 3,029 3,029 2,468 2,693 2,693 2,468 2,917 3,142 3,366 33,324 Logistic Expense 190 190 190 190 190 190 190 190 190 190 190 190 190 2,470 Salaries and wages 760 760 1,615 1,615 1,615 1,615 1,615 1,615 1,615 1,615 1615.20 1,615 1,615 19,287 Employee benefits 0 36 74 74 74 74 74 74 74 74 74 74 74 851 Payroll taxes 0 41 41 41 41 41 41 41 41 41 41 41 41 486 Rent 11,971 1,995 1,995 1,995 1,995 1,995 1,995 1,995 1,995 1,995 1,995 1,995 1,995 35,914 Utiltities 0 0 309 309 309 309 309 309 309 309 309 309 309 3,397 Repairs and maintenance 1,000 0 0 0 0 0 0 238 0 0 0 0 0 1,238 Insurance 0 404 0 0 0 0 0 0 0 0 0 0 0 404 Telephone 0 57 90 57 57 57 57 57 57 57 57 57 57 717 Postage 0 24 71 71 71 71 71 71 71 71 71 71 71 808 Office supplies 0 0 50 0 0 0 0 0 0 0 0 0 396 446 Marketing/promotion 0 48 548 548 548 1,118 548 548 548 1,118 548 548 548 7,213 Accounting & IT 0 380 380 380 380 380 380 380 380 380 380 380 380 4,561 Training and development 0 71 40 0 0 0 0 0 0 0 0 0 0 112 Miscellaneous 95 0 0 0 0 0 0 95 0 0 0 0 0 190 Owner's drawings 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Loan repayments 0 713 713 713 713 713 713 713 713 713 713 713 713 8,551 TaTEBpayments 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Capital purchases 447 71 71 71 71 71 71 71 71 71 71 71 71 1,302 Other 0 0 0 0 0 0 0 0 0 0 0 0
Total Payments 14,463 6,808 8,656 9,093 9,093 9,663 8,532 9,089 8,757 9,102 8,981 9,205 9,826 121,270
Cashflow Surplus/Deficit (-) 37 40 483 1,179 1,456 436 127 42 582 972 1,107 1,044 861 8,366
Opening Cash Balance 0 37 77 560 1,740 3,196 3,632 3,759 3,800 4,383 5,355 6,462 7,506 40,505
Closing Cash Balance 37 77 560 1,740 3,196 3,632 3,759 3,800 4,383 5,355 6,462 7,506 8,366 48,872
56
NAME OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP TOTAL NutriCosmetics Quantities Quantities Quantities Quantities Quantities Quantities Quantities Quantities Quantities Quantities Quantities Quantities Beauty Supplements 90 110 135 135 135 110 120 120 110 130 140 150 1485 Fresh F&B 1200 1400 1800 1880 1750 1550 1600 1660 1670 1790 1750 1790 16300 TOTAL 1290 1510 1935 2015 1885 1660 1720 1780 1780 1920 1890 1940 17785 Beauty Supplements Sales $2,692.82 $3,291.23 $4,039.23 $4,039.23 $4,039.23 $3,291.23 $3,590.43 $3,590.43 $3,291.23 $3,889.63 $4,188.84 $4,488.04 $44,431.58 F&B Sales $4,155.52 $4,848.11 $6,233.28 $6,510.31 $6,060.13 $5,367.55 $5,540.69 $5,748.47 $5,783.10 $6,198.65 $6,060.13 $6,198.65 $56,445.81 Suppléments GOGS $2,019.62 $2,468.42 $3,029.43 $3,029.43 $3,029.43 $2,468.42 $2,692.82 $2,692.82 $2,468.42 $2,917.23 $3,141.63 $3,366.03 $33,323.69 F&B COGS $623.33 $727.22 $934.99 $976.55 $909.02 $805.13 $831.10 $862.27 $867.46 $929.80 $909.02 $929.80 $8,466.87
Sales by month $6,848.34 $8,139.33 $10,272.51 $10,549.55 $10,099.37 $8,658.77 $9,131.12 $9,338.90 $9,074.33 $10,088.28 $10,248.97 $10,686.69 $100,877.39 COGS Monthly $1,506.64 $1,790.65 $2,259.95 $2,320.90 $2,221.86 $1,904.93 $2,008.85 $2,054.56 $1,996.35 $2,219.42 $2,254.77 $2,351.07 $22,193.03
Retail Sales Cost Cost Margin Per Unit Total Per Unit Total $29.92 $44,431.58 $22.44 $33,323.69 $11,107.90 $3.46 $56,445.81 $0.52 $8,466.87 $47,978.93
$100,877.39 $41,790.56 $59,086.83
LINE PLAN
57
Twelve-month P&L Projection
Oct-‐‑14 % B/A Nov-‐‑14 % Dec-‐‑14 % Jan-‐‑15 % Feb-‐‑15 % Mar-‐‑15 % Apr-‐‑15 % May-‐‑15 % Jun-‐‑15 % Jul-‐‑15 % Aug-‐‑15 % Sep-‐‑15 % YEARLY % Revenue (Sales) Category 1 2,693 39.3 3,291 40.4 4,039 39.3 4,039 38.3 4,039 40.0 3,291 38.0 3,590 39.3 3,590 38.4 3,291 36.3 3,890 38.6 4,189 40.9 4,488 42.0 41,739 39.3 Category 2 4,156 60.7 4,848 59.6 6,233 60.7 6,510 61.7 6,060 60.0 5,368 62.0 5,541 60.7 5,748 61.6 5,783 63.7 6,199 61.4 6,060 59.1 6,199 58.0 64,549 60.7 Total Revenue (Sales) 6,848 100.0 8,139 100.0 10,273 100.0 10,550 100.0 10,099 100.0 8,659 100.0 9,131 100.0 9,339 100.0 9,074 100.0 10,088 100.0 10,249 100.0 10,687 100.0 106,288 100.0
Cost of Sales
Category 1 2,020 75.0 2,468 75.0 3,029 75.0 3,029 75.0 3,029 75.0 2,468 75.0 2,693 75.0 2,693 75.0 2,468 75.0 2,917 75.0 3,142 75.0 3,366 75.0 33,324 79.8
Category 2 623 15.0 727 15.0 935 15.0 977 15.0 909 15.0 805 15.0 831 15.0 862 15.0 867 15.0 930 15.0 909 15.0 930 15.0 8,467 13.1
Total Cost of Sales 2,643 38.6 3,196 39.3 3,964 38.6 4,006 38.0 3,938 39.0 3,274 37.8 3,524 38.6 3,555 38.1 3,336 36.8 3,847 38.1 4,051 39.5 4,296 40.2 41,791 39.3
Gross Profit 4,205 61.4 4,944 60.7 6,308 61.4 6,544 62.0 6,161 61.0 5,385 62.2 5,607 61.4 5,784 61.9 5,738 63.2 6,241 61.9 6,198 60.5 6,391 59.8 64,497 60.7
Expenses Logistic expense 190 2.8 190 2.3 190 1.8 190 1.8 190 1.9 190 2.2 190 2.1 190 2.0 190 2.1 190 1.9 190 1.9 190 1.8 2,280 2.1 Salary expenses 760 11.1 1,615 19.8 1,615 15.7 1,615 15.3 1,615 16.0 1,615 18.7 1,615 17.7 1,615 17.3 1,615 17.8 1,615 16.0 1,615 15.8 1,615 15.1 18,527 17.4
Payroll expenses 36 0.5 74 0.9 74 0.7 74 0.7 74 0.7 74 0.9 74 0.8 74 0.8 74 0.8 74 0.7 74 0.7 74 0.7 851 0.8
Employee benefits 41 0.6 41 0.5 41 0.4 41 0.4 41 0.4 41 0.5 41 0.4 41 0.4 41 0.4 41 0.4 41 0.4 41 0.4 486 0.5
Rent 1,995 29.1 1,995 24.5 1,995 19.4 1,995 18.9 1,995 19.8 1,995 23.0 1,995 21.9 1,995 21.4 1,995 22.0 1,995 19.8 1,995 19.5 1,995 18.7 23,943 22.5
Utilities 0 0.0 309 3.8 309 3.0 309 2.9 309 3.1 309 3.6 309 3.4 309 3.3 309 3.4 309 3.1 309 3.0 309 2.9 3,397 3.2
Repairs and maintenance 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0
Insurance 404 5.9 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 404 0.4
Telephone 57 0.8 90 1.1 90 0.9 90 0.9 90 0.9 90 1.0 90 1.0 90 1.0 90 1.0 90 0.9 90 0.9 90 0.8 1,050 1.0
Postage 24 0.3 71 0.9 71 0.7 71 0.7 71 0.7 71 0.8 71 0.8 71 0.8 71 0.8 71 0.7 71 0.7 71 0.7 808 0.8
Office supplies 0 0.0 50 0.6 50 0.5 50 0.5 50 0.5 50 0.6 50 0.5 50 0.5 50 0.6 50 0.5 50 0.5 50 0.5 550 0.5
Marketing/promotion 48 0.7 548 6.7 548 5.3 548 5.2 548 5.4 548 6.3 548 6.0 548 5.9 548 6.0 548 5.4 548 5.3 548 5.1 6,073 5.7
Accounting & IT 380 5.5 380 4.7 380 3.7 380 3.6 380 3.8 380 4.4 380 4.2 380 4.1 380 4.2 380 3.8 380 3.7 380 3.6 4,561 4.3
Training and development 71 1.0 40 0.5 40 0.4 40 0.4 40 0.4 40 0.5 40 0.4 40 0.4 40 0.4 40 0.4 40 0.4 40 0.4 515 0.5
Miscellaneous 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0
Owner'ʹs drawings 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0
Loan repayments 713 10.4 713 8.8 713 6.9 713 6.8 713 7.1 713 8.2 713 7.8 713 7.6 713 7.9 713 7.1 713 7.0 713 6.7 8,551 8.0
TaTEBpayments 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0
Capital purchases 71 1.0 71 0.9 71 0.7 71 0.7 71 0.7 71 0.8 71 0.8 71 0.8 71 0.8 71 0.7 71 0.7 71 0.7 855 0.8
Depreciation 19 0.3 19 0.2 19 0.2 19 0.2 19 0.2 19 0.2 19 0.2 19 0.2 19 0.2 19 0.2 19 0.2 19 0.2 223 0.2
Total Expenses 4,617 67.4 6,016 73.9 6,016 58.6 6,016 57.0 6,016 59.6 6,016 69.5 6,016 65.9 6,016 64.4 6,016 66.3 6,016 59.6 6,016 58.7 6,016 56.3 70,794 66.6
Net Profit -‐‑412 -‐‑6.0 -‐‑1,072 -‐‑13.2 292 2.8 528 5.0 145 1.4 -‐‑631 -‐‑7.3 -‐‑409 -‐‑4.5 -‐‑232 -‐‑2.5 -‐‑278 -‐‑3.1 225 2.2 182 1.8 375 3.5 -‐‑6,296 -‐‑5.9
58
SUP_ Cost Description 39.3%
Variable Costs
Beauty Supplement COGS $33,324
Training and development $202
Inventory $2,020
Total Variable Costs 35,545.72
Per Unit $23.94
Fixed Costs Logistic Expense 2,280
Salaries (includes payroll taxes) 4,555
Marketing/promotion 2,385
Rent 9,402
Utilities 1,334
Repairs and maintenance -
Insurance 159
Telephone 412
Postage 317
Office supplies 216
Accounting & IT 1,791
Miscellaneous -
Owner's drawings -
Loan repayments 3,358
TaTEBpayments -
Capital purchases
Depreciation
Principal portion of debt payment 3,358
Total Fixed Costs $71,765
F&B 60.7% Variable Costs
F&B ingredients $8,467
Training and development $313.03
Direct Labor (Includes Payroll Taxes) $10,261
Total Variable Costs 19,041.18
Per Unit $1.17
Fixed Costs
Logistic Expense -
Salaries (includes payroll taxes) $7,044
Marketing/promotion $3,688
Rent $14,541
Utilities $2,063
Repairs and maintenance $-
Insurance $245
Telephone $638
Postage $490
Office supplies $334
Accounting & IT $2,770
Miscellaneous $-
Owner's drawings $-
Loan repayments $5,193
TaTEBpayments $-
Capital purchases $855
Depreciation $223
Principal portion of debt payment $5,193
Total Fixed Costs $43,277
Fixed Costs & Variable Costs breakdown
59
BREAKEVEN ANALYSIS Supplements
AMOUNTS SHOWN IN U.S. DOLLARS
SALES SALES PRICE PER UNIT $29.92 SALES VOLUME PER PERIOD (UNITS) 12,500 TOTAL SALES $374,000.00
VARIABLE COSTS VARIABLE COSTS PER UNIT $23.94 TOTAL VARIABLE COSTS $299,206.36
UNIT CONTRIBUTION MARGIN 5.98 GROSS MARGIN $74,793.64
FIXED COSTS PER PERIOD TOTAL FIXED COSTS PER PERIOD $71,765
NET PROFIT (LOSS) $3,028.63
RESULTS BREAKEVEN POINT (UNITS): 11993.84
SALES VOLUME ANALYSIS: SALES VOLUME PER PERIOD (UNITS) 0 1,250 2,500 3,750 5,000 6,250 7,500 8,750 10,000 11,250 12,500 SALES PRICE PER UNIT $29.92 $29.92 $29.92 $29.92 $29.92 $29.92 $29.92 $29.92 $29.92 $29.92 $29.92 FIXED COSTS PER PERIOD $71,765.01 $71,765.01 $71,765.01 $71,765.01 $71,765.01 $71,765.01 $71,765.01 $71,765.01 $71,765.01 $71,765.01 $71,765.01 VARIABLE COSTS $0.00 $29,920.64 $59,841.27 $89,761.91 $119,682.54 $149,603.18 $179,523.82 $209,444.45 $239,365.09 $269,285.72 $299,206.36 TOTAL COSTS $71,765.01 $101,685.65 $131,606.28 $161,526.92 $191,447.56 $221,368.19 $251,288.83 $281,209.46 $311,130.10 $341,050.73 $370,971.37 TOTAL SALES $0.00 $37,400.00 $74,800.00 $112,200.00 $149,600.00 $187,000.00 $224,400.00 $261,800.00 $299,200.00 $336,600.00 $374,000.00 NET PROFIT (LOSS) ($71,765.01) ($64,285.65) ($56,806.28) ($49,326.92) ($41,847.56) ($34,368.19) ($26,888.83) ($19,409.46) ($11,930.10) ($4,450.73) $3,028.63
($100,000.00)
$0.00
$100,000.00
$200,000.00
$300,000.00
$400,000.00
0 1,250 2,500 3,750 5,000 6,250 7,500 8,750 10,000 11,250 12,500
DOLL
ARS
SALES VOLUME (UNITS)
Breakeven Analysis Chart
FIXED COSTS PER PERIOD TOTAL COSTS TOTAL SALES NET PROFIT (LOSS)
60
BREAKEVEN ANALYSISF&B!"#$%&'(')#*%(+%($,',(-#..!/'
SALESSALES PRICE PER UNIT $3.46SALES VOLUME PER PERIOD (UNITS) 21,000!"!#$%&#$'& ()*+,,-.--
VARIABLE COSTS/#01#2$'%3"&!&%4'0%561! 7.7)(%%%%%%%%%%%%%%%%%%%%!"!#$%/#01#2$'%3"&!& (*8+9:7.9;
561!%3"6!0125!1"6%<#0=16 *.*>=0"&&%<#0=16 (8;+7*;.8*
FIXED COSTS PER PERIOD!"!#$%?1@'A%3"&!&%4'0%4'01"A 8:+*))%%%%%%%%%%%%%%%%%%
6'!%40"?1!%B$"&&C (8+;97.,9
RESULTS20'#D'/'6%4"16!%B561!&CE 7;;;:.-)
SALES VOLUME ANALYSIS:SALES VOLUME PER PERIOD (UNITS) 0 2,100 4,200 6,300 8,400 10,500 12,600 14,700 16,800 18,900 21,000SALES PRICE PER UNIT $3.46 $3.46 $3.46 $3.46 $3.46 $3.46 $3.46 $3.46 $3.46 $3.46 $3.46FIXED COSTS PER PERIOD $43,276.77 $43,276.77 $43,276.77 $43,276.77 $43,276.77 $43,276.77 $43,276.77 $43,276.77 $43,276.77 $43,276.77 $43,276.77VARIABLE COSTS $0.00 $2,453.16 $4,906.32 $7,359.48 $9,812.63 $12,265.79 $14,718.95 $17,172.11 $19,625.27 $22,078.43 $24,531.58TOTAL COSTS $43,276.77 $45,729.93 $48,183.08 $50,636.24 $53,089.40 $55,542.56 $57,995.72 $60,448.88 $62,902.03 $65,355.19 $67,808.35TOTAL SALES $0.00 $7,266.00 $14,532.00 $21,798.00 $29,064.00 $36,330.00 $43,596.00 $50,862.00 $58,128.00 $65,394.00 $72,660.00NET PROFIT (LOSS) ($43,276.77) ($38,463.93) ($33,651.08) ($28,838.24) ($24,025.40) ($19,212.56) ($14,399.72) ($9,586.88) ($4,774.03) $38.81 $4,851.65
($60,000.00)
($40,000.00)
($20,000.00)
$0.00
$20,000.00
$40,000.00
$60,000.00
$80,000.00
0 2,100 4,200 6,300 8,400 10,500 12,600 147 16,800 18,900 21,000 DOLL
ARS
SALES VOLUME (UNITS)
Breakeven Analysis Chart
FIXED COSTS PER PERIOD TOTAL COSTS TOTAL SALES NET PROFIT (LOSS)
61
62
REFERENCES Amcham. (2013). Amway Vietnam puts direct selling in the spotlight. Retrieved from: hlp://www.amchamvietnam.com/5787/amway-‐‑vietnam-‐‑puts-‐‑direct-‐‑selling-‐‑in-‐‑the-‐‑spolight/ CBRE. (2013). CBRE Vietnam Quarterly Report Q3 2013 In HCMC. Retrieved from: hlp://www.cbrevietnam.com/Vietnam-‐‑Property/cbre-‐‑vietnam-‐‑quarterly-‐‑report-‐‑q3-‐‑2013-‐‑in-‐‑hcmc.cbre Dan Tri International News. (2011). Nutritional Supplement Overdose. Retrieved from: hlp://www.dtinews.vn/en/news/018/14035/nutritional-‐‑supplement-‐‑overdose.html Euromonitor. (2013). Extract of Global Health and Wellness report 2013. Retrieved from: hlp://blog.euromonitor.com/2013/04/nutricosmetics-‐‑target-‐‑markets-‐‑with-‐‑an-‐‑ageing-‐‑population-‐‑and-‐‑a-‐‑rising-‐‑disposable-‐‑income.html Euromonitor. (2013). Passport: Skin Care -‐‑ Vietnam 2013. Retrieved from Zenith International Euromonitor. (2013). Passport: Beauty and Personal Care -‐‑ Vietnam 2013. Retrieved from Zenith International Euromonitor. (2013). Passport: Vitamins and Supplements-‐‑ Vietnam 2013. Retrieved from Zenith International Ministry of Foreign Affair. (2013). Framework for Comprehensive Economic Partnership Between the Association of Southeast Asian Nations and Japan. Retrieved from: hlp://www.aseansec.org/asean-‐‑anthem/fta/asean-‐‑japan-‐‑comprehensive-‐‑economic-‐‑partnership Ministry Of Planning And Investment General Statistics Office. (2012). Report on Vietnam Labor Workforce Survey. Retrieved from www.gso.gov.vn/Modules/Doc_Download.aspx?DocID=15318� Nielsen. (2013). Know Your Consumer Grow Your Business: 2013 Pocket Reference Book Vietnam. Retrieved from hlp://www.nielsen.com/content/dam corporate/t3/vietnam/reports/2013_VN_pocket_reference_book_low.pdf .
63
Sasa. (2013). Online Product Catalog. Retrieved from: hlp://web28.sasa.com/ webapp/wcs/stores/servlet/SaSa/ShoppingArea/CatalogSection/CatalogEntrySubsection/ProductDisplay.jsp?catalogId=10001&storeId=10001&langId=-‐‑1&sapSku=106480509001 T&T Group. (2014). T&T Group stirred beverages market at ending year. Retrieved from hlp://lgroup.com.vn/Articles/2088/935/general-‐‑news/l-‐‑group-‐‑stirred-‐‑beverages-‐‑market-‐‑at-‐‑ending-‐‑year.aspx USDA Foreign Agricultural Service, Global Agricultural Information Network .(2013, June). Vietnam Food Safety Law and Guiding Decree Released. (VM3032) adopted from The full text of the law in Vietnamese can be accessed at the Vietnam’s Government website. Retrieved from hlp://gain.fas.usda.gov/ Recent%20GAIN%20Publications/Food%20Safety%20Law%20and%20Guiding%20Decree%20Released_Hanoi_Vietnam_6-‐‑12-‐‑2013.pdf VietnamNews. (2013). Ministry tightens food advertising laws. Retrieved from hlp://vietnamnews.vn/economy/237343/ministry-‐‑tightens-‐‑food-‐‑advertising-‐‑laws.html APPENDITEB1: Interviews with experts Kenny – Quo Vadis Luxury winery and dining: District 1, Nguyen Sieu Vietnamese consumers overall spend a large amount of their income in food. Their spending power is relatively high, for example, a 10 dollars meal is normal for the white collars. Food Safety . Food Law, ve sinh thuc pham à risk? How to handle risk Make sure you keep track of all your receipt, where you bought it from in case the government entities try to make it difficult on you. You must study the Food law, business law and ecommerce law in Vietnam if you want to do it online. I would recommend have a lawyer friend to proofread. You should start with defining your business model then you will define the cost. Set it up, make it good for several years and sell it (if you'ʹre a SME) and do something else. I know this is not the right way to do if ur so passionate about your business, but due to the ever-‐‑changing and the complexity of market in Vietnam, unless you’re backed up strongly in finance, strong capital; that'ʹs the way. Well, you still can have some share of your business once you sell it. The other way is not to use your own money but build up a plan and find investors. Have all the brand identity, menu, business plan, especially $ costing. .
64
A brief advise on managing people in this industry (very high turnover), and you don'ʹt want them to quit job and later bite you back since they know everything about your business. I have applied this method and it works for over 10 years. In my restaurant, I have different department says buying the input (ingredients), processing the input, managing the output (dishes and drinks), customer service… I have a team of advocacy (who I most carefully selected to manage and smooth out all of the above departments, plus in emergency case, people from that team and jump in and fill in the gap. No business is delay. I also Divide the job into smaller and smaller segment, each employee is responsible for that single segment of simple task. The task is simple enough that even if that employee quit their job, I can easily find someone else to replace him/her. I have 03 chef, their job is just tasting the dishes to make sure the quality is good. One person is responsible for Cooking rice , one for soup etc. I have them relatively higher (10-‐‑20% than the competitors), and their job is like that, it’s hard for them to quit job. Now, look into the model of fast food business, every task is simplied to the most that its anyone can fried a piece of chicken wing, you can easily find so. to do that job. Lea: -‐‑So should my business be a quick dining service? You can do that, formularise the process and the recipe. If you choose beauty dining as your core value, you know the Vietnamese perception about Japan beauty is flawless. I recommend you go to Japan, bring the Japanese people here for your potential customers to see. Register your company in Japan to if possible. Make it perceived as Japan Beauty dining coz it will match with Vietnamese perception toward Japan is the best beauty dining resource, and its credible and they’re willing to spend money on. Ms. Dan – Cupid’s café and dining (District 1 – near Benthanh market) Small snack is an easier way to earn cash from customers. The Vietnamese consumers perception about spending on a set menu for lunch are more demanding than snacks and desserts. They can easily accept the illusion of “spending pely cash 20k – 30k vnd on small snack and deserts (while when add up the total bill, it may cost the same as the whole set lunch) I think the human resource is important. There are 02 options you can choose. One is to hire every single position by yourself. Two is hire the entire team. The risk for option 02 is once they quit, the entire team quit. But I have used this method for years, if you treat them right, let them have share in your business (10% or more), they will become a part of your business and more. But remember to keep the signature to yourself, for my case, all the customers who come to my dining are businessmen from Japan and Korea, they are in my network, they know im the owner and they trust in my name and service. If my employees goes wild and quit to start their own business, they will never find a good customer base like the one I have here.
65
Mr. Dang -‐‑ L’an Mien café (District 1, part of New World Hotel Complex and AB tower) F&B in Vietnam is very complicated and competitive in terms of varieties of food service, the proximity of food service (too easy to find a place to eat with tasty food – not considering healthy or functional). The pressure of economic downturn lead to narrowing the profit margin, pushing the food & drink becoming more and more poisoning for consumers. I can tell this is not the right time to launch any dining service, not until 2015. On the other hands, young consumers (15-‐‑25) have low loyalty to any brands, therefore unless you want to create a fast (skim milk?) business that will last only <2 years to get fast cash, and change the business before the consumers can find something else more interesting. Functional food like collagen powder marketed in my café chain Ineffectively (why? – Lea: I can see his customer base if not suitable for this type of products, most customers are businessmen, white collars who work for companies around the area both men and women come here for lunch break, but more men than women) Here are the 03 important factors for my café n dining business: No 1. Factor is Location (60-‐‑70%) – Highland, terrace, paris deli (How to define the location and service, use Benchmark) No 2 Food (10-‐‑20%) No 3 Service (10 – 15%) *Sell something an average can understand and consume will guarantee success. Now they are still in the very simple stage of wanting to eat something tasty, cleanliness may be a concern but tasty may overweight that concern. For the functional benefits, Im not so sure they will understand. The only way to make them understand is to educate them. But you have to pour $ to educate consumers to use new products or service. For example, EAON japan. Wa’n Ngon, always crowded due to tourist groups (commissioned), huge $ on foreign magazine. Forget about lunch time to make profit. Lunchtime is only to gain customer base due to set lunch profit lille profit. You have to sell large volume too. *Highest profit margins are any type of food that can go well with Wine, beer and cigarele. Could you find any type of food / drink in the above categories to benefit the skin? Leveraging this, well not cigareles. You must make the most of every square meter you rent, every hour you rent your space. Calculate how many rounds (50-‐‑100 orders per morning breakfast for example) you need to make profit. You must find your signature, formularized the main ingredients of your best selling dishes. Keep in mind, you must keep the most important secret ingredients to yourself. For example, Korean BBQ garden, have their grilling sauce bolle and sell to their franchisees. .
66
APPENDIX 2: Consumer Surveys .
67
APPENDIX 2: Consumer Surveys .
68
APPENDIX 3 : Product listing .
69
EXIHIBIT 1 BeautyNutri Product Lis9ng USD-‐VND 21,050.00 Beauty Supplements Product names Price in VND Price in USD Pills Shiseido Collagen 126 tablets 610,000 28.98 Shiseido Collagen EX 120 tablets 920,000 43.71 Royal Jelly Honey 350,000 16.63 Sprinulina Angel 550,000 26.13 Sprinulina Angel Japan Special 880,000 41.81 TruNature Coenzyme Q10 780,000 37.05 Kanebo Evita50 Q10 990,000 47.03 VItaWhte PLus Korea C+E+B2 560,000 26.60 Lipoic & CoQ10 Japan Premium 1,050,000 49.88 Inneov Cellular An9-‐ageing 60 Pills 1,050,000 49.88 Coenzyme Q10 Orihiro (90 capsules) 890,000 42.28 Powder Meiji Amino Collagen (30days supply) 580,000 27.55 Meiji Amino Collagen Premium 830,000 39.43 Collagen Hanamai (Green Tea flavor) 550,000 26.13 Collagen Hanamai 550,000 26.13 Vita A, E, C + Collagen 12000mg France 850,000 40.38 Shiseido Collagen Powder (28 days supply) 860,000 40.86 Sprirulina Soya 890,000 42.28 RTD 10,000mg Marine Collagen Drink (10 pcs) 890,000 42.28 Shiseido Pure White (5pcs) 550,000 26.13 Shiseido Collagen EX (10 pcs) 830,000 39.43 Hovenia Herbal Detox 500,000 23.75 An9-‐Oxidant Water Booster 880,000 41.81 Snacks Gummy bear Collagen 35,000 1.66 Lingzhi Candies 45,000 2.14 Korean Gingseng candies 35,000 1.66 Beauty Candies 24gr (Singapore) 75,000 3.56 Moisurising Cacao snacks (Malaysia) 55,000 2.61 Fresh Beauty Drinks Smoothies Glowing Skin green 65,000 3.09 An9-‐aging X Berry 85,000 4.04 VitaC boost (with yogurt) 85,000 4.04 Moisurising Avocado 65,000 3.09 Berry Healthy Hair 65,000 3.09 Juices Cleansing Lemon 65,000 3.09 Pure Aloe Vera 65,000 3.09 Beta-‐carotene Rich 85,000 4.04 Skin Clearing Apple 65,000 3.09 Smoothing Cucumber and Pineaple 75,000 3.56 VitaBoost Orange & Strawberry 85,000 4.04 Teas Green tea Macha 65,000 3.09 Black Olong 45,000 2.14 Relaxing Lavendar 45,000 2.14 Soups CALMING lotus soup 79,000 3.75
(all soups come with complimentary green or
black tea
NORISHING Sesame 79,000 3.75 ANTI-‐AGING seaweed 99,000 4.70 REVIVING Bakute 89,000 4.23 MOISTURIZING gazpacho / pumpkin 79,000 3.75