Cosmetics firm launches big ad strategy to ensure product sales

The locally-owned hair care and cosmetics manufacturer and distributor has taken an aggressive tack to ensure not only that it can compete in the single market under the Asean Economic Community but also that it can sustain growth at 20-30 per cent per year on average.

It is also preparing to list on the Stock Exchange of Thailand by 2016 when its annual sales reach Bt3 billion so it can systemise and standardise its operations to cope with cutthroat competition in the future.

The company runs four core businesses through four companies.

Modern Cass International Cosmetic focuses on hair colour and hair treatment products.

Lifeford (Thailand) makes locally-made cosmetics to capture the mid-market.

Extraction Co imports hair care and hair salon equipment.

Alien Distribution joins with both foreign and local partners to import high quality hair products.

The company claims it is the leader in mid-market hair care products, thanks to its focus on quality. It spends 3-5 per cent of its sales on research and development. Its partner is a chemist who plays an important role in developing all formulas of the company's products to serve market demand.

"Our materials are 100 per cent imported from the US, Japan, Germany and France, which are the same sources used by global cosmetic brands," Narong Srikriengthong, deputy managing director, said last week.

The company distributes hair colour and hair care products under its own brand, Dcash Professional, while cosmetics are under Lifeford Paris and various imported brands of hair salon equipment and the latest imported hair care and hair treatment are under BerryWell from Germany.

Dcash Professional is expected to account for 60 per cent of the company's sales this year, followed by Lifeford Paris for 30 per cent and imported equipment for 10 per cent.

Hair colour and hair treatment products are still the company's mainstay. They share 15 per cent of the Bt4-billion market. It plans to grow in this market at least 20 per cent per year by launching two products every month.

Wholesalers were the bulk of the firm's customers for years, but now it will focus on directly serving the modern trade such as Lotus Supercentre. It needs to modernise product packaging to catch up to rapid changing lifestyles.

To push sales up to the next level, the company knows it has to access more foreign markets, especially Vietnam and the Asean region. Although Vietnam is a tough market to crack, the company's operation in Ho Chi Minh City will shape up as the company's business model for its penetration outside Thailand in the future.

"It's a hard market to access due to many factors particularly local regulations and traditional trading practices. Although we've been there for three years, we still have to plough ahead to compete with local traders," Narong said.

This business model should be completed within two years.

The company invested Bt100 million to set up a plant in Vietnam that uses its old machines from Thailand. The base in Vietnam is expected to cater to the integrated market under the Asean Economic Community in 2015.

The company's exports have reached 15 per cent of its total sales. Besides Vietnam, the company also ships to Cambodia and will fire up its Bangladesh operation this year.

"We hope to increase our export share to 20-30 per cent next year," he said.

To facilitate the company's investment abroad, Panorama Co was set up in Vietnam and Dcash Trading in Cambodia. Narong is also negotiating with a prospective distributor in Indonesia to help increase exports.

The company has no interest in investing in China, as it is a complicated market teeming with copycat products.

The company is moving towards doing its own marketing rather than relying on distributors as in the past. It expects to be handling 90 per cent of its marketing within three years, he added.