This report analyzes the cosmetics retail industry in Hong Kong. There are many large-scale specialty cosmetics chains that are well developed in this market, such as Sasa, Bonjour, Colourmix, Aster and Angel, which are taking the lead. They mainly offer a wide range of international branded products and private label products to cater for customers’ special beauty needs, like make-up, fragrance, skincare items. With many dominant firms and a slowing growth in demand, the industry structure is being identified as mature.
On the following report, customers’ needs analysis, five forces analysis and complementors, companies’ performances as well as the potential impacts on ...view middle of the document...
For satisfying the needs of customers, cosmetic retailers adopt the one-stop operating mode, which is benefit to customers much. It is because customers can get what they need in one time, even if products are from different brands. What is more, nowadays, many cosmetic retail companies have their own websites as serving customers better. Customers can take orders through these online shopping systems and then goods will be delivered to them. As a result, limitation of time and place is reducing, which will force customers to shop.
2.3 Cognitive/ Information
Various beauty products are provided for customers choosing. In order to pick the suitable ones, customers will look for relative information on the Internet. However, messages online are so much and some even cannot be reliable. Quite naturally, in the stage of identification and evaluation, creditable views are sought by customers.
Information about products, such as price, function and product reviews, is offered on the companies’ official websites. Customers can also get makeup and health knowledge by watching relevant videos on the Internet. All of these will help them to make suitable decisions on buying beauty products.
2.4 Risk and confidence
In addition to needs mentioned above, product safety is another factor influencing customers’ purchasing, especially beauty products that applied directly to the skin. On account of improperly usage causing skin problems, customers will require guarantee in the stage of usage and maintenance.
To comfort customers’ worries, samples are supplied for trying. Besides, staff get training about product knowledge and service skills before they start work. Suggestions they made will based on customers’ requests and situations, therefore customers will be more confident to purchase and use the beauty products.
2.5 Different focus between different groups of customers
Due to most teenagers are students, their purchasing power is relatively lower since their sources of income are narrower. As a consequence, teenagers will focus more on the prices when shopping.
Many Hong Kong people devote their lives to working, especially the working class. Weekends or holidays are valuable for them. There is no doubt that they hope to save time so that they can do other things or just take a rest.
Anti-aging products will be more attractive to this kind of people. However, these products are generally very experience. As rational customers, middle-aged people like to compare before buying in case of wasting money or choosing wrongly. From this point of view, risk and confidence might be more important than other considerations.
3. Five Forces Analysis and Complementors
Below is the analysis of five forces and complementors that reveals the attractiveness and profitability of the cosmetics retail industry.
3.1 Threat of Entry
Threat of entry can be determined by the level of entry barriers faced in the industry....