natura brasil

Presented by – Group 2 Jasveen Kaur (14) Neha Shaw (29) Prath Pr athamesh amesh Nar Narkar( kar(37) 37) Shal Sh alvi vi Sh Shar aran an (4 (48) 8) Shuaib Raza Sheikh(54)

QUICK FACTS Founded in 1969 by Antonio Seabra 2004: went Public 2009: 1.2 Million direct sales consultants Market: Latin America & France Market share: 21% Brazil, 8.6% Global Growth B Corp Certified Most Sustainable Companies in the World 2017 : Forbes

Unique fragrances combining the wealth of the Brazilian forest with essential oils and the tradition of its communities

perfume do

Altogether 223 perfumes in fragrance base. Produced using organic alcohol from sugarcane

Market leaders in Brazil with market share of 21% in 2016.

Brasil

EKOS  – For women 5 fragrances (eau de toilette) Price range  – 38-40  €

KAIAK  – For men 4 fragrances (eau de cologne & eau de toilette) Price  – 40  €

Country to Enter?

Hong K ong  11th

worldwide in terms of GDP/Capita  Market size :HKD1.5 billion in 2016  11th worldwide in terms of most visited countries  Foreign brands are major player compared to local brands  No custom tariff on goods imported to Hong Kong.  Premium fragrances are forecasted 7.5% value growth from 2016 to 2021.  Hong Kong & Brazilian customers have similarity for fragrances in terms of quantity and quality.  Natura produces oriental fragrances more which is likable by customers in Hong Kong.

Porter’s 5 forces (1/2) • Bargaining power of Supplier (Low) •

Three main types of providers for a perfume:

 – Fragrance producers  – Perfume bottle producers  – Packaging specialists producers…. •

Suppliers have low bargaining power toward large luxury group, due to their large size even if the raw materials are critical to the quality and the potential sale of the final product

• Bargaining power of Buyer (High) •

Too many brands (Chanel, Lancome, Dior) and too many fragrances are available to choose from

•

70% of perfumes purchased by the Hong Kongers are given as a gift

•

Many customers are not consumers and hence are not brand loyal

Porter’s 5 forces (2/2) • Threat of Substitutes (Low) •

As Hong Kongers like mild perfumes there are substitutes like BotanicalBased Scent but no direct substitute

•

However, the threat comes from counterfeit perfume

• Threat of New Entrants (Low) •

New entrants need to think twice: facing huge brands which are in the business for decades

•

Moreover, putting a perfume on the marketplace is link to substantial costs such as communication, marketing and HR budgets

• Rivalry among Existing players (High) •

Non-Hong Kongese brands only account for 30% of market share in HK

Porter’s 5 forces (continued..)

Competitive Landscape Leading brands in Hong Kong •

Chanel No5 and L’Occitane in 2016

• •

Chanel growing continuously with the launch of some exclusive series L’Occitane competes at affordable price; product series- high-end and mass market fragrances

International vs local brands • • •

Consumers loyal towards international brands Also have a desire to discover unique fragrances; niche foreign brands Local brands- potential to grow due to strong and unique demand

On the go fragrances

• •

2016 saw the launch of roll-on and stick fragrances Reason being convenience and portability

Leading Brand -Chanel

Distribution

Retail stores and online presence

Strengths

Premium product, strong online presence, oriental fragrance

Pricing

Starting from 1000 HKD (100 ml)

Market share

Leading brand in 2016 with 4% market share

Competitive Analysis- L’Occitane and Kiehl’s Distribution

Strengths

30 retail stores of L’Occitane in Hong Kong 23 retail stores of Kiehl’s

Oriental fragrance, premium product in affordable price range, online presence

Price L’Occitane starting from 485 HKD (100ml) Kiehl’s starting from 365 HKD(50 ml)

Market share L’Occitane leading brand in 2016 with 4% market share, Kiehl’s market share - 1%

Age group: 30-49

Customers: Who prefer natural product and care about sustainability

Experience: Belief that perfume you wear is more than just a scent, it’s a way to communicate

Customer Profile

Global shoppers: They shop everywhere; where they live, while they are travelling and at their final destination

Pricing Strategy Beta testing : Free samples

Share established Price adjusted upwards to maximise profit

Pricing: 500 HK$ for 100 ml bottle

Trial and switching Penetration Pricing Market: Fast growing Share: low

How Natura distributes

Direct Selling (Offline) - Natura uses a network of consultants for dire selling in Brazil, Columbia, Chile and Mexico - There are about 500000 consultants internationally - We have employed this method since 1974 Direct Selling (Online) - Natura also has its own website which sells it products - This channel is available in all countries in which Natura is present - We normally ship through UPS Retail shops - Natura is trying to diversify its distribution channels - We have opened a store in France and a conce store in Brazil -A synergetic effect is expected to take place between these two channels as customers are striving for convenience and this will enable the reach products through different means.

Distribution Strategy in Hong Kong

- During the initial launch

period we will set up our own retail / experience shops in the 3 biggest malls in HK - We will also use the existing distributors of Body Shop - These stores will be similar to the stores in Brazil and France

-We will increase the number of retail outlets - Along with this we will design a site for HK which will also be an online sales platform, as the cost of leasing retail outlets is very high in HK

- We won’t employ the offline direct sales in HK - HK is a tourist destination , mainly tourists from mainland China come to visit - They want to experience the brand as 60-70% of buyers buy perfumes for the purpose of gifting.

Concept stores in Brazil and France

References http://www.bbc.com/news/business-38905530 http://www.portal.euromonitor.com/portal/analysis/tab http://www.tourism.gov.hk/english/statistics/statistics_perform.html http://list25.com/25-most-visited-countries-in-the-world/3/ http://www.doingbusiness.org/data/exploreeconomies/hong-kongchina#paying-taxes https://hbr.org/2012/07/the-growth-opportunity-that-lies-next-door http://www.cosmeticosbr.com.br/conteudo/en/natura-opens-firstphysical-store-in-sao-paulo-for-product-experimentation/ http://hkmb.hktdc.com/en/1X006S6I/hktdc-research/Cosmetics-andToiletries-Industry-in-Hong-Kong http://www.worldsrichestcountries.com/top_hong_kong_imports.ht ml

THANKS FOR YOUR TIME AND CONSIDERATION