Malaysia is selected as a potential market for skincare products from Boots because the number of people interested in styling their personal care is increasing since the year 2010. According to Euromonitor International (2011), natural brands in the beauty and personal care industry are expanding in the market. Additionally, new brands have made entrance in the market. An example of a brand that has recently entered the Malaysian beauty and personal care market is Burt’s Bees.
In addition to the expanding market in the industry, the Malaysian consumers prefer beauty products that do not harm their skins. In fact the demand for natural brands in the personal care industry is on the rise in many Asian countries though in Malaysia the rate is low. This presents an opportunity for internationally positioned companies in the industry like the Boots to tap into this market. Another reason why Malaysia is selected is due to the fact that it is ranked among the top countries that dominate the beauty and personal care industry despite the absence of Boots’ Skincare products in the market (Report Linker 2012). Also there are very few local firms engaging in production in the country. This means that competition is minimal despite few international companies dorminating the market (Euromonitor International 2011). Lastly, the high disposable incomes and increase in urbanization in the country are raising the consumer demand in personal care products. Increase in demand for these products is an opportunity for the company to make inroads into this lucrative market.
The beauty and personal care industry has steadily grown in China. Among the reasons attributed to the growth of the industry is the high population in the country. Euromonitor (2011b) noted that the recent economic growth has led to high disposable income which has encouraged consumer spending on non-basic commodities. Another reason for the industry’s growth is the rising urbanization and the urge for youthful appearance. Lastly, many consumers in the country have invested in this area as a result of the growing demand of the industry’s products (Euromonitor International 2011b).
The Chinese beauty and personal care market is on the rise compared to that of other economic giants such as the US. Despite the China’s market share in beauty care products being slightly lower than that of the USA in 2007, the market is rapidly growing. According to Conrad (2012), the domestic industry is expected to increase production by over 20% over the next year as a result of the emerging markets in the Middle East and Asia.
The China’s market in beauty care products is expected to grow by about 29% by 2014. This is very high compared to the expected growth rate of 5.7% and 7.9% in the North America and European markets respectively (Balfour 2010). This is due to the continuing growth of the economy of the country which is expected to increase the demand for the industry’s products because the consumers will have extra income to spend on non-essentials. Further, those living outside the large cities are expected to increase their use of the personal care products pushing up the demand for skin care products (Euromonitor 2011b)
The Russian beauty and personal care market experienced positive growth in 2010 while in many other countries the same was dropping as a result of the global recession. The reasons for this positive growth are increase in the consumers’ confidence on the use of beauty products and the rising levels of disposable income leading to consumer spending more on non-essential products (Euromonitor International 2011c). Another reason why market broadened was the summer heat waves which mostly affected the central areas of the country.
The Russian beauty and personal care market has not reached full potential. In fact, it is expected that the market could grow at the rate of 4% annually between 2010 and 2014 (Euromonitor International 2011c). This is because the economic growth of the country is expected to remain on an upward tread due to the constant increase in the prices of the natural resources that the country deals in. The end result will be consumers spending more on non-essentials. Further, the skin care products that lost market during the recession period are expected to fully recover within the period beginning 2011. This is expected to further increase the market share in the period (Euromonitor International 2011c).
According to Euromonitor International (2011d), the beauty and personal care market in Vietnam experienced strong value growth in 2010. This was as a result of increased market awareness by the existing companies in the market. Also there was an increase in the availability of new brands targeting the various consumer segments in the Vietnamese market.
The Vietnamese market is ideal for Boots Skincare products because the consumers have high disposable incomes and high living standards. For this reason, the consumers are therefore willing to spend more money on premium personal care products. The demand for beauty and personal care products is expected to continue growing further. There is also another unutilized market in the rural areas of the country (Euromonitor International 2011d). Another way of looking at the opportunity in Vietnamese beauty and personal care market in the coming years is the realization of benefits by those currently using these products, which will increase their demand. A large proportion of the population comprises of youths that are known to consume more of the products hence enlarging the market in the country.
The GDP of India was about 7.8% in 2011 (CIA 2012). However, the beauty and personal care market still indicated positive growth. According to Euromonitor International (2011e), the positive growth was as a result of introduction of innovative skincare products into the Indian market. Another reason why the Indian personal care market continues to rise is the massive advertisements in the products by the key players in the industry. Further, the companies have made key inroads to the country’s rural population market hence the increase.
There are indicators that the market will continue to increase. This is because the country’s economic growth is expected to keep rising and as a result the consumers are expected to have more money to spend on non-essential products such as the Boots’ Skincare products. Euromonitor International (2011e) noted that the middle class segment of the Indian consumers have the tendency to spend on the more expensive beauty and personal care products. Given the fact that the overall GDP growth rate is expected to rise, the Indian beauty and personal care market has the potential to grow at the rate of about 15-16% per annum for the period between 2010 and 2014 (In-Cosmetics 2009). Further, despite the Indian women being adamant on the use of traditional care products, rigourous advertisement and the growing popularity of the western personal care products is changing this culture. For these reasons, the Indian Market is ideal for the Boots skincare products.
According to the Smart Cube (2012), the beauty market in Turkey grew by more than 10% in 2010. However, during this year the sales for the more premium personal care products dropped. The drop in the more premium products was not notable because the overall sales of the year represented an increase compared to the previous two years. The increase in the sales of beauty and personal care products in the country were as a result of massive advertisement by the established companies in the industry (Euromonitor International 2011f).
Although the sales of the premium beauty and personal care products in the country declined in 2010, Turkish market is ideal for established international companies such as the Boots Skincare. This is because the increase in disposable income being experienced in the country will encourage the customers to spend more on the premium international beauty and personal products (The Smart Cube 2012). Therefore Turkey is a strategic opportunity for a company in this industry to expand in the Western Europe region. Further notable opportunities in the country are presented by the untapped rural population of the country (Euromonitor International 2011f). Therefore, the company has the potential to tap on the growing youthful population of the country as well as the continued urbanization.
The global economic recession in addition to the local banking crisis in the country resulted in a decrease in consumer spending in the year 2009. However, according to FSDH (2011), the Nigerian economy recovered in 2010 with a GDP growth of about 7.9% in the third quarter of the year. The economic recovery in 2010 led to the positive growth in the current value sales for beauty and personal care products in the Nigerian market (Euromonitor International 2011g). The recovery from the economic crisis has led to the increase in disposable incomes of the people. Another indicator that the beauty and personal care products in the Nigerian market are growing is the increase on demand of the premium products of the industry. Despite the growth in the market, the country’s poor infrastructure causes the prices of the personal care products to remain high. As a result of the poor infrastructure in the country, there are few domestic manufacturers. This makes the Nigerian market to be more dependent on the importation of beauty and personal care products. This is an opportunity for an internationally established company like the Boots to expand into this market.
In addition to the noted growth, the Nigerian beauty and personal care products is expected to continue growing in the coming years. According to Euromonitor International 2011g), the population of Nigeria is increasing and this offers opportunity for companies to increase their market share in the coming years.
South Korea has a population of about 49.5 million. The country’s beauty and personal care products are exported from New Zealand (NZTE 2012). This is a particularly large market which was worth $7.47 billion in 2009. The country’s economy recovered quickly from the global recession with a GDP growth of about 6% registered in 2010. This resulted in the positive growth of the beauty and person care products for the country in 2010 (Euromonitor International, 2011h). The consumers in the Korean market were observed to pick beauty products because of the brand function rather than the image. This is reason enough for internationally recognized quality products from Boots to enter the Korean market. Additionally, there are only two major domestic companies making competition for new entrants minimal (Euromonitor International 2011h). The industry is however expected to grow slowly at the rate of about 2%. Further, Boots can make inroads in the country’s market due to the high demand for skincare products as noted by NZTE (2012). The market is expected to continue growing until 2015. The reason for this growth is the increase in the women income. NZTE (2012) suggested that expectations of the customers are expected to be based on high quality and therefore it is easier for a company already producing high quality products to win the market.
Sales for beauty and personal care products in Japan declined in 2009 because of the recession. As a result the Japanese consumers dropped on the spending on non-essentials such as the beauty products (Lennard 2010). Premium and high quality products in the country have lost popularity. However, the ageing population together with the sensitivity to body odor amongst the Japanese have resulted in 3% value growth in the year 2009. Lennard (2010) noted that the ageing population will continue to increase the demand of anti-ageing products in the market.
The Japanese market is not an attractive one for the company as it is expected to further decline by 2014 by about $2 billion. This decline is as a result of the consumers preferring cheap brands due to fear of the recession (Lennard 2010). However, with the growth being experienced the market shows some potential that can be utilized for the Boots’ skincare products.