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Matsumoto KiYoshi partners with Lotus Group to expand into pharma-cosmetic market

Released at: 10:55, 20/12/2019 BUSINESS SPOTLIGHT

Matsumoto KiYoshi partners with Lotus Group to expand into pharma-cosmetic market

From Left: Mr. Nguyen The Hung, Ms. Bui Thi Thanh An, Mr. Kiyoo Matsumoto, Ms. Le Van May, Mr. Junichi Kaguawe, and Mr. Hirai Shinji at the signing ceremony (Photo source: Matsumoto KiYoshi)

Two target opening 10-15 pharmaceutical and cosmetic stores over next few years and hundreds in the future

by Minh Do

Inside the multi-million-dollar cooperation between Matsumoto KiYoshi and Lotus Group: When giants get ahead of the growing pharmaceutical-cosmetic market

Currently running 1,654 stores in Japan and other chains in Thailand and Taiwan (China), yet KiYoshi aims to develop a chain of 10 to 15 Japanese-standard flagship stores in Vietnam within the next 3 to 5 years. The latest move from this Japan’s giant retailer has “stirred-up” Vietnam's pharmaceutical and cosmetic market as KiYoshi set sights on developing hundreds of stores in the future.

A “market pie” that worth $2.35 billion

A number of surveys and studies confirm there is still much room to move in Vietnam’s cosmetic market compared to globally. A Nielsen report points out that Vietnamese people spend an average of only $4 a year on cosmetics, while Thais spend $20 each.

Mintel - a global market research firm based in London - estimated that Vietnam’s cosmetic market is worth approximately $2.3 billion and is expected to post annual growth of 15-20 per cent over the coming decade. The young generation of customers, including men, are gaining more interest in make-up and skincare products.

This also explains the presence of more and more players in the pharmaceutical and cosmetic chain business over recent and not-so-recent times. And this excludes the amount of pharmaceutical and cosmetic products entering Vietnam via hand luggage or smuggling.

Mr. Hiroki Miyaoka (C) and  Ms. Le Van May (R)  

Strategy of the Japanese giant

As the market gets bigger and more attractive, industry tycoons will most certainly arrive. The arrival of Matsumoto KiYoshi is part of an ongoing trend and promises to strongly change the market as well as buying habits of local consumers.

Entering the market nearly two decades after the first cosmetics chain stores began to appear in Vietnam, Matsumoto KiYoshi is nonetheless opportune in timing, locality, and human factors to make Vietnamese shoppers visit the chain weekly and get ahead of the next trend.

Its arrival has, indeed, been perfectly timed. Unlike ten years ago, Vietnamese consumers are now more familiar with imported product lines and modern retail methods.

People are also paying greater attention nowadays to brands and product origin when choosing healthcare and beauty products. This helps businesses save much time and cost on branding and product education compared to entering a completely untapped market.

“Matsumoto KiYoshi will become the store chain that Vietnamese consumers will want to visit once a week to find carefully-selected healthcare and beauty products at affordable prices,” a representative from Matsumoto KiYoshi Holdings said at the signing ceremony with the Lotus Food Group.

In terms of “locality”, Vietnamese people are very fond of products made in Japan. Figures reveal that Japan accounts for 17 per cent of foreign cosmetics sales in Vietnam, ranking third after only South Korea and the EU.

A survey conducted by Matsumoto KiYoshi on its own chain of stores also showed that about 389,000 Vietnamese tourists in Japan have shopped at their stores since 2017. The average growth in Vietnamese visitors to Matsumoto KiYoshi stores is 156 per cent a year, with the most favored items being functional foods and cosmetics.

“Upon hearing that we were going to open shops in Vietnam, many Vietnamese customers have expressed their happiness and also encouraged us,” said Mr. Kiyoo Matsumoto, President of Matsumoto Group KiYoshi Holdings.

The remaining factor, “human”, is proven by previous successful practices by both Matsumoto KiYoshi in Japan and the Lotus Food Group in Vietnam, alongside with their internal resources. It includes a policy of selling only authentic products at reasonable prices, exclusive product lines, and an understanding of the market.

Ms. Le Van May

In particular, according to Ms. Le Van May, President and CEO of the Lotus Food Group, their key strategy is to secure customer trust by selling only authentic goods with verified origin. This is also the most important factor driving competition between pharma and cosmetic retailers.

“In Japan, if a product is placed on the shelves of a Matsumoto KiYoshi store it means it has been guaranteed in quality and safety,” Ms. May said. “During our cooperation, we will also adhere to the same principles in selecting and confirming product origin in Vietnam.”

In order to draw consumers away from unverified and smuggled cosmetics, its pricing policy has also been a key focus of Matsumoto KiYoshi. Pricing will be carefully considered and balanced to suit the incomes of the majority of Vietnamese consumers.

With an extensive product range including exclusive goods that can only be found at their stores, a reasonable pricing policy, and Japanese-standard services, Matsumoto KiYoshi will quickly grow from a late starter to a first finisher in Vietnam’s highly competitive pharmaceutical and cosmetic market.

Matsumoto KiYoshi now has 1,654 stores in Japan and other chains in Thailand and Taiwan (China).

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