HEG. Hung Duy. Elwin Kusumaningtyas. Goran Adam Gasparac. China’s cosmetics market. T he second largest in Asia Pacific after Japan and the eighth largest in the world . The total retail sales of cosmetics in the country is estimated to top RMB 70 billion in 2006.
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Goran Adam Gasparac
For consumers looking for mid-level quality of products.
All products that target the mass market
Each of diversified brands with different tiers of sales channels has a distinguished personality-Maybelline is fashion driven, Garnier is regarded as a natural brand, and L'Oreal Paris is known for a high-performance technology brand.
1. A decision was made to buy a local brand, Mininurse was found, and a deal was done.
2. A gleeful announcement was made that this acquisition would open up the 2nd and 3rd tier cities through Mininurse’s distribution infrastructure to L’Oreal’s own brands.
3. A glum L’Oreal found that the distribution channels smooth and were complex, multi-layered beasts, with no direct connection between the top and bottom layers.
4. L’Oreal dumped the strategy and the brand and came up with a totally new one: GarnierMininurse. “…in other words, they changed the brand, the packaging, the formula, the position, and the distribution channel…all at the same time”.
5. The “hybrid brand (Garnier is international while Mininurse is rural China)” did not go down well, and no amount of promotion through modern channels helped.
6. Mininurse strategy has been unsuccessful, and they plan to go back to the original channels in which Mininurse was strong”.