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Risk and Assets of the Former Implation of Sephora in China

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RISK & ASSETS OF THE FORMER IMPLANTATION OF SEPHORA IN CHINA

With an annual turnover of around 2.5 billion euros, Sephora is a worldwide brand. Present in China since 2005, the company now has 135 stores in 47 cities. The brand has experienced a rapid development and do not stop there. The brand aims to open more new stores, particularly in the towns of 2nd and 3rd level. Indeed, cosmetic products in China are rapidly expanding. What were the risk and assets of an implantation in China?

I - RISK

1. Cultural rigidities

Traditionally, cosmetics, especially skincare and fragrances are reserved for women. Taking about caring of your body is not a major concern for men, especially in rural areas. However it develops in the cities new male customers, more westernized, consisting essentially of managers with a high enough income.
Female customers appreciate in great majority the skin lightening products. Unlike the European, they prefer light perfumes and discreet scent, and they prefer the scent of flowers. In addition, the Chinese hardly use deodorant.
Most Chinese do not know cosmetic products or only a small part, which requires a high level of involvement on the part of vendors and a strong marketing strategy to attract potential consumers.

2. Copying

Counterfeiting is a problem in Asian countries and in particular China, where the industry has taken on an unprecedented scale over the last ten years. It represented in 2006 about 8 % of China's GDP ($115,76 billion) and employed between 3 and 5 million Chinese.
Luxury goods are particularly affected by counterfeiting and for several reasons. Firstly, luxury goods are often identified to a brand and this is often the brand that embodies the luxury of a product. Now it has become easier to copy trademarks or logos even if the product itself is not as good as the branded product. Then, luxury goods…...

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