International Marketing of Sodashi: Analysis of Hong Kong & Singapore

This report explores the international marketing strategies of Sodashi, an Australian skincare company, in the Hong Kong and Singapore markets. It begins with a company and product overview, highlighting Sodashi's unique selling proposition of natural, unadulterated ingredients. The report includes an industry analysis, examining both domestic and international skincare markets, and a consumer profile, focusing on target demographics with higher disposable incomes interested in natural products. Market analyses for Hong Kong and Singapore are conducted using PESTEL and Porter's Five Forces frameworks, assessing the political, economic, social, technological, legal, and competitive landscapes. The report concludes with recommendations for Sodashi's market entry and future feasibility in these Asian markets.

Running head: INTERNATIONAL MARKETING
INTERNATIONAL MARKETING
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Author’s Note:

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Contents
1.Introduction...................................................................................................................................3
2. Company and product overview:.................................................................................................3
Sodashi Market Analysis:............................................................................................................3
3. Industry Analysis.....................................................................................................................4
4.Consumer Profile......................................................................................................................5
5.Market Analysis........................................................................................................................7
Country 1: Hongkong..............................................................................................................7
Country 2: Singapore...............................................................................................................8
6. Recommendation...................................................................................................................11
7. Conclusion or feasible for the product in future........................................................................13
8. References..................................................................................................................................14
Appendix 1:...................................................................................................................................16
Appendix 2:...................................................................................................................................18

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1.Introduction
The industries, their location and sizes are the factors that limit the markets of Australia.
Most of the businesses in Australia are small and medium in size. They are searching for
opportunities in the markets overseas, in order to expand their marketing and business activities.
Asia Pacific is an area where numerous businesses from Australia focus on growing their
markets internationally. This suggests that there occurs a continued economic growth in this area
with varying opportunities in the different countries. International marketing is a great strategy to
expand business; however, it is tricky as well as challenging because the marketing environment
and consumer groups are different in each country (Panayotou, 2016). This report will be
exploring the International Marketing of the company Australian company Sodashi in Singapore
and Hong Kong Markets.
2. Company and product overview:
Sodashi Market Analysis:
Sodashi is a natural skin care products manufacturing organisation and is based in
Western Australia. Since the establishment of the organisation in 1999, the company has come a
long way based on the values and principles adapted by the company. The company believes in
making high quality products with unique formulas. The unique selling preposition are the
formulas that are developed by the company is based on the natural ingredients are claimed to be
in their purest, unadulterated form.
The aim of the company is to provide people with glowing and radiant skin

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There has been a huge growth rate of Sodashi business as they supply their products to
the largest spas of the world. Sodashi is currently at the top in the skincare industry with its
branches in over 25 countries (Sodashi Skincare, 2018).
3. Industry Analysis
Domestic
The industry in which the organization operates is the Skin Care segment. The revenue of
the industry amounts to US$1,646m in 2018 whereas the expected growth is expected to be
annually by 4.7 % (1). Thus it can be said that the growth prospect of the industry is lucrative.
The competitive advantage is that globally, the trends for skin care products vary region
wise. For instance, in the Asia Pacific region, Skin lightening and skin brightening product are of
great demand while Anti aging creams have a higher demand in European or North American
regions and in the more dries regions like that of Argentina and Brazil, consumers have an ever
increasing need for sun protection creams (Statista, 2018). Skin Care is an industry, which is
very dynamic owing to constant innovative product launches by the manufacturers and evolving
trends of the consumer. Multi utility products like color corrector balms, lip balms daily defense
creams and other products like body lotions, anti-ageing creams, body massage creams , skin
whitening, sun block lotions, wart removal lotions, acne removal products, skin nourishing
creams and many more are included in the skin care product range. In Australia, NICNAS
regulates the manufacture as well as import of chemicals for 'industrial' use, which includes
cosmetics, skin care etc. Therapeutic Goods Administration (TGA) is another body that regulates
the operations as well (2). As Australia is a country that encourages trade there are hardly any
barriers in business.

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Among the existing business of the Skincare Industry, L’Oreal Australia has been a large
player in this industry holding share value of 12 percent in the year 2016. Skin care industry is
slowly developing and though it does not make a significant impact on the collective economy of
the country there are a lot of people who are associated in this industry. With the growth of
awareness among the people regarding health care and skin care, people have started using more
and more organic and natural methods which has made the companies in this industry invest in
innovation.
International
Geographically, the segments of the skin care industry spread across Asia pacific, Middle
East Asia, Africa, Europe, Latin America and North America with Asia Pacific being the largest
market for this industry. The developing countries of the Asia pacific have been witnessing a
rapid improvement in standards of living, which might result to an increased growth in the
market.
Some of the popular brands are L’Oreal Paris and Garnier while Lancôme, Kiehl’s,
Biotherm and Georgio Armani comprise of the premium brands owned by the company
(Loreal.com.au, 2018). Another active brand of cosmetics also owned by L’Oreal includes La
Roche-Posay. It is true that the multinational skincare brands have dominated the industry;
however, there has been a growing demand for small businesses especially the ones that are
positioned as manufacturing product with natural ingredients (Loreal.com.au, 2018).
4.Consumer Profile
Consumers are very proactive about their choices in skincare products, from knowing
what kind and type of products they want to use to checking the list of ingredients to figure out

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which products have been made with active or natural ingredients. . Consumers use numerous
skincare products in their daily routine, making skin care an indulgent product category.
Profile segment
Age is an important factor when it comes to consumption of skin care products. The younger
population is more prone to spending money on cosmetic and skin care products and most
companies target the age group of 18-35, as this group consists of population who need
themselves to look more attractive (GlobalData Plc. 2018).
Another important factor for consumer profiling is that of disposable income. The population,
which has higher disposable income tend to spend more on luxury skin care products, however
some companies target the middle class, by designing marketing strategies to appeal to the
group.
In addition, ethnicity also matters different regions in the world have different needs for
cosmetic products due to their climatic conditions, cultural differences and many more, so
different kinds of skin care products need to be targeted in different parts of the world, for
instance, Pacific Asian Countries have a high demand for skin lightening creams.
Sodashi is a skin care company, which is, based n Australia but has spread its branches in
almost 25 countries. They sell luxury cosmetic products with purely natural ingredients to the
spas and salons all across the world (Sodashi Skincare 2018). Therefore, their target consumers
include individuals on higher socio-economic side with higher disposable incomes. The age
group in this case is wider in range from 25-55 years, given the fact that spas and luxury salon
treatments are availed by a variety of age groups. Consumers are demanding products made with
natural ingredients that would show the results and there for this consumer base is rapidly
growing (Ribeiro et al., 2015)

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5.Market Analysis
Country 1: Hongkong
PESTEL analysis
Political :Hong Kong is in the SAR or Special Administrative Region on China. They maintain a
lot of autonomy from China but are not entirely independent of the politics of the Chinese. Hong
Kong does not have governing political parties and the professional or the business sectors carry
out most of the legislative matters. The main political parties usually register themselves under
these business corporations or companies.
Economical: Hong Kong is the tenth largest in terms of trading power and third largest in terms
of financial centre, globally. Despite having an economic crisis, Hong Kong GDP was expanded
by 3.8 percent in 2017. Forecasts about a 4percent increase in 2018 has been made (Oecd.org.
2018).
Social: Hong Kong has a collectivist culture and a patriarchal society. The women in Hong
Kong are expected to settle down after marriage and have at least one male child to continue the
family legacy. Hong Kong has been having low birth-rates. Hong Kong people are open to
various religious practices (BBC News. 2018). As the opening line states,
Technological: Hong Kong is one of the most technologically sound country in the world is
Hong Kong with tremendously advances telecommunication systems. They have achieved other
technological advancements which are spread for most of the public to use.
Legally: Hong Kong is famous all across the world for its simple tax laws and the tax rate for
local as well as international companies is lower compared to any other country. In addition, The
legal system is very effective as well as transparent. (BBC News. 2018).

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Porter’s five forces
Competition in the market High completion in the market Lancome, Shu Uemura, Shiseido, Kanebo,
L'Oreal etc are some of the major skin care brands in skin care.
Among the natural skin care line: Native Essentials, Bahia, Coconut Matter,
Purearth etc.
Bargaining power of the
Supplier
Low, the number of suppliers in the country is significant therefore the
switching cost is low for the company.
Bargaining power of the
consumer
High, As there is intense competition in the market.
Threat of Substitution Medical treatment like surgery and treatments facial are the threat to the
industry as substitute.
Threat of new entry High capital investment s required though it is a profitable industry it seems
lucrative.
Country 2: Singapore
Politically, the country is stable and peaceful and do not suffer from political risks. The political
scenario of the country has improved the various opportunities in business in the country. Free
speech of the parties is restricted and debates between the political parties are low (Export.gov,
2018).
Economical: Singapore has an economy which is free of corruption and has an environment to
provide support to the entire sector of business. The workers are educated which further
strengthens the Business framework in legal and financial terms, the economy has been
diversifying. Tourism, skincare, pharmaceutical industries are on a rise because of both, the

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investments by the government and the strategic position geography wise. Few of the constraints
affecting the economy include shortages in labour, rise in cost of labour and productivity decline
(BBC News. 2018).
Social: Singapore is like any other Asian countries socially with strict family values and a
collectivist culture. However the younger generation has been evolving more with western
influences. The productivity of the nation keeps increasing and the literacy rate is of the country
is also very high. English fluency in the population attracts international trade.
Technological: Advancements in the field of technology is what helped improve the standard of
living and the economy of the country. Singapore has an impressive IT infrastructure and the
efficient internet plans have increased communication and connectivity by manifold (The Straits
Times. 2018).
Legal: Given the rapid development of the industries, there are legal settings which have been
established to support the industry and ecommerce growth. Some of the acts include Electronic
Transactions Act, Content Regulation, and Intellectual Property Rights etc.
The environmental qualities are maintained thoroughly by the Ministry of Environment. Lack of
water resources requires Singapore to be dependent on Malaysian water supplies (The Straits
Times. 2018).

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Porter’s five forces
Competition in the market Similar to Hong Kong market as the companies that are discussed in
multinational and is worldwide popular and poses major threat to all skin
care brands.
Bargaining power of the
Supplier
The bargaining power of the suppliers are low as there is a number of
suppliers available in the market
Bargaining power of the
consumer
High, due to tough market rivalry
Threat of Substitution Medical treatment, plastic surgery
Threat of new entry Government encourages trade and business. The industry is also lucrative in
terms of the target market.

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6. Recommendation
SWOT of Hong Kong
Strength
 The people of Hong Kong show a
natural trend for beauty, along with the
need to be able to defy age. Therefore,
there is a steady increase in the market
demand for skin care products.
 Consumers here seek for products
which are natural and can give results
of a naturally flawless skin, rather than
using external make up to conceal the
imperfections.
Weakness
 Strict rules and regulations of business
as well as quality
Opportunities
 The consumers here therefore have an
intense demand for products which
boosts radiance, minimises pore, makes
the skin tone even, and softens
wrinkles.
 Women have the strongest skin care
demand; however, growth has been
Threats
 Leader in the skin care business in
Hong Kong is SK-II with an 8 percent
share value growth , followed by
Shiseido with 8 percent and Este
Lauder with 7 percent share value
growth in the year of 2016. These
brands leading the skin care industry in

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noticed in the need for skincare
products in Hong Kong working men
too, especially in the age range of 40-
65.
Hongkong have developed, over the
years, a huge and loyal customer base.
SWOT of Singapore
Strength
 Consumers in Singapore have high
disposable income which will be
helping in a hike in the growth of sales
in the skin care industry, given that a
large part of the population is
comprised of image conscious women.
 The young population strive for unique
products to be able to improve the
natural quality of the skin. There has
been a rise in skin care sales for men
too.
Weakness
 Some of the exsisting brands appealing
to the population include Estee Lauder,
Dermalogica, MAC, Clinique, and
Bobbi Brown
Opportunities
 The population demands sophisticated
and higher priced skin care products.
 A dynamic growth in the demand and
Threats
 Singapore has a small market size;
however the growth in the sales of the
skin care products suggests enormous

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sales of sun blocks and anti ageing
treatments has been observed. Facial
and massaging creams are also of great
demand.
 Brands are also earning more from a
strategy of using nutritional and natural
supplements in the products thereby
appealing more to the population
(Export.gov. 2018).
competition among the premium
brands.
7. Conclusion or feasible for the product in future
Having analyzed the markets of both Hong Kong and Singapore it can be understood that
both the countries have a lucrative market for skin care products especially ones, which have
been stamped as being natural and organic. Population of Singapore has a higher disposable
income, and also according to the chart in the appendix the indulgence of Singapore market will
opt for the more expensive treatments and spa trips instead of skin care. Also the Hong Kong
market of the skin care is more attractive than Singapore thus establishing a better market for a
luxury new skin care brand to launch the product Hong Kong in than in Singapore. (refer to
appendix for data).

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8. References
BBC News. 2018. Hong Kong country profile. [online] Available at:
http://www.bbc.com/news/world-asia-pacific-14918801 [Accessed 2 Apr. 2018].
BBC News. 2018. Singapore profile. [online] Available at: http://www.bbc.com/news/world-
asia-15961759 [Accessed 2 Apr. 2018].
Export.gov. 2018. Global Market Insight: Singapore Cosmetics Skincare and Toiletries
Overview | export.gov. [online] Available at: https://www.export.gov/article?id=Global-Market-
Insight-Singapore-Cosmetics-Skincare-and-Toiletries-Overview [Accessed 2 Apr. 2018].
GlobalData Plc. 2018. APAC to remain as the largest skincare market through 2022 | GlobalData
Plc. [online] Available at: https://www.globaldata.com/apac-remain-largest-skincare-market-
2022/ [Accessed 2 Apr. 2018].
hofstede-insights.com 2018. Hofstede Insights|Statista.com.[online] Available at:
https://www.hofstede-insights.com/country-comparison/hong-kong,singapore/ [Accessed 14
Apr. 2018].
Hongkong Business | Hong Kong Business News, Economic News, Finance News, Stocks
News.. Retrieved from http://hongkongbusiness.hk/
Loreal.com.au. 2018. L'Oréal Australia, world leader in beauty - L’Oréal Group. [online]
Available at: https://www.loreal.com.au/ [Accessed 2 Apr. 2018].
Neely, C. 2018. The Hong Kong Political System. [online] Hong Kong Industry News. Available
at: https://www.Hong Kongindustrynews.com/2016/06/Hong Kong-political-system/ [Accessed
2 Apr. 2018].

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Oecd.org. 2018. Hong Kong - Economic forecast summary (November 2017) - OECD. [online]
Available at: http://www.oecd.org/economy/Hong Kong-economic-forecast-summary.htm
[Accessed 2 Apr. 2018].
Panayotou, T., 2016. Economic growth and the environment. The environment in anthropology,
pp.140-148.
Ribeiro, A.S., Estanqueiro, M., Oliveira, M.B. and Sousa Lobo, J.M., 2015. Main benefits and
applicability of plant extracts in skin care products. Cosmetics, 2(2), pp.48-65.
Sodashi Skincare. 2018. SkinCare Provider in Australia | Sodashi. [online] Available at:
https://www.sodashi.com.au/ [Accessed 2 Apr. 2018].
Statista. 2018. Size of the global skin care market 2012-2024 | Statistic. [online] Available at:
https://www.statista.com/statistics/254612/global-skin-care-market-size/ [Accessed 2 Apr. 2018].
Statista.com. 2018. Skin Care|Statista.com.[online] Available at:
https://www.statista.com/outlook/70020000/124/skin-care/singapore [Accessed 14 Apr. 2018].
Statista.com. 2018. Skin Care|Statista.com.[online] Available at:
https://www.statista.com/outlook/70020000/118/skin-care/hong-kong [Accessed 14 Apr. 2018].
The Straits Times. 2018. Preparing for Singapore 4.0. [online] Available at:
http://www.straitstimes.com/opinion/preparing-for-singapore-40 [Accessed 2 Apr. 2018].

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Appendix 1:
Figure: Singapore skin care market
(Source : Statista.com 2018)

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Figure: Hong Kong skin care market
(Source : Statista.com 2018)

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Appendix 2:
Figure: Hofstede Hong Kong and Singapore comparison
(Source: hofstede-insights.com 2018)