Korea's The Face Shop goes for mass sales

“Our sales have reached a certain volume that allows us to reduce prices to expand our customer base in Thailand. However, the prices are still 1.8 times those offered by The Face Shop stores in Korea,” managing director Nuttayoot Apiratikiat said yesterday.
The free-trade agreement reached last year between South Korea and Asean eliminated some duties and sharply reduced others for imported cosmetics. For example, the 20-per-cent duty on shampoos was totally removed and the levy on skincare products was lowered from 30 per cent to 18 per cent.
“Our brand strategy is to make The Face Shop the imported brand that is mass-market and that everybody can buy,” Nuttayoot said.
The Face Shop products will be made as cheap as possible so they are affordable to most consumers, he said.
The company saw its first-quarter sales jump 66 per cent year on year while its outlets were rapidly expanded from 25 in the first quarter of last year to 32 now. The latest store opened at the beginning of this year in the Diana Complex in Hat Yai, Songkhla province.
“We plan seven more The Face Shop stores this year, to reach 39 by the end of the year. The 33rd store will appear in Mega Bangna next month,” Nuttayoot said.
TFS (Thailand) expects to grow its sales by 58 per cent to Bt100 million this year. The Face Shop business, which debuted in Thailand in 2008, posted Bt41 million in sales in 2010 and Bt65 million last year.
Each standard store offers about 800 cosmetic and skincare products. That is fewer than the stores in South Korea, which offer more than 1,100 stock-keeping items, with skin treatments for all weather conditions.
Positioned as a mass cosmetics brand serving people in all age groups, The Face Shop is the largest single cosmetics and skincare brand in South Korea by sales and retail outlets. The Face Shop retail network is now present in 24 countries outside Korea, of which 14 are in Asia.
Nuttayoot said the company expected to open about 80 The Face Shop outlets in Thailand by 2015 when the Asean market is fully liberalised. Its sales are expected to reach between Bt180 million and Bt200 million by that time.
“Thai consumers have accepted many cultural clues from Korea. They also believe that Korea can make very good cosmetics, especially in the whitening category,” he said.
“We want to promote the positioning of The Face Shop as an accessible import brand among Thai consumers.”