Wren,
Since this is a venture into China (see article below), I assume it means that CPPKY will be in the entity that is the partner who's going into the cosmetics business in China.
Viv
Cosmetics firm eyes China,The Nation (Thailand); KWANCHAI RUNGFAPAISARN; 08-18-2000
DOMESTIC cosmetics and heath-product manufacturer SSUP Group plans to apply
its local success in brand development to China by early 2002, making the
company a pioneer among Thai cosmetic firms. With 1.2 billion consumers,
the Chinese market presents a potential goldmine to any company serious
about expanding there. SSUP, which owns the brands Oriental Princess, Spices,
and Cute Press, is hoping to benefit from the liberalization of trade and
retail in China once the country becomes an official member of the World
Trade Organization (WTO).
It will invest at least Bt100 million in China to market its three core
cosmetics and natural-extract skin-care products brands, all of which have
proved successful with Thai consumers. Chairat Hiranyavasit, SSUP corporate
strategic director, said the company sees plenty of opportunity in China,
following its entry in the WTO. The company formed a joint venture with
Charoen Pokphand Group and a local Chinese investor to open a factory and
marketing operations in Shanghai, Chairat said. The joint venture, known
as Jiatai Shanghai Daily Chemicals, has developed its own brand of skin-care
products called Lafonte, selling them in Shanghai and neighboring provinces.
"We set up business in China in 1997 and have developed our own products
there, as we want to study the market and consumption behavior of Chinese
people, which is quite different from other markets," said Chairat.
"We have not had much activity in China so far. But we will take a serious
run at the market by the end of next year or early 2002, applying the same
business strategy for success that we used in Thailand," he added. The
Chinese government currently sets a 100 per cent import tariff for cosmetics
because retail is considered "sensitive business" and foreign ownership
is prohibited, Chairat said. But once China enters the WTO it will have
to reduce import tariffs, he said. It will also have to gradually liberalize
the retail sector. Some SSUP products would be suited to Chinese consumers,
Chairat said. Oriental Princess will focus on those who prefer natural-extract
products, while Spices brand will focus on teens and Cute Press on working
people. SSUP, founded by the Sakpornsap family, has been in the retail
business for more than 25 years. The company has more than doubled its
outlet space for its Oriental Princess products, expanding from 52 outlets
in 1996 to 120 today.
More than 10 will open this year. The group also operates more than
100 sales counters for its Spices cosmetic products and has sold the Cute
Press brand since 1976. The brand is treated as core product for the group.
Cute Press, which covers more than 1,000 different products from skin-care,
body-care and make-up, now contributes annual sales revenues of more than
Bt600 million to the group and being sold through 150 dealers throughout
the country. SSUP yesterday revealed its strategy to expand the distribution
outlets of Cute Press products to the massive modern trade outlets. The
new brand - 'Swiss Formula' By Cute Press has been established to differentiate
to those selling via dealer network. Body lotion product will be the first
product category putting on supermarket's shelves.
The group aims its 'Swiss Formula' brand will take at least 4 per cent
market share in local Bt1.6 billion body lotion market in the first 12
months. Chairat said that SSUP also owns the license to develop a local
network of GNC outlets for health and supplementary products. The group
has currently opened 25 GNC outlets so far. SSUP Group achieves total sales
at Bt1.2 billion last year of which about 50 per cent were from Cute Press
products. The group has also exported the Cute Press products to neighboring
countries, including Myanmar and Laos. The company also earned Bt400 million
from sales of Oriental Princess products last year and Bt120 million and
Bt100 million sales respectively for Spices and GNC products. SSUP is working
as a holding company and operating about six companies within its business
empire to take care for research and development, manufacturing as well
as sales and marketing for each product brands.
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kWANCHAI RUNGFAPAISARN, Cosmetics firm eyes China, NATION. , The Nation (Thailand), 08-18-2000. |
