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Utilising Ginseng in a New Skin-Care Product for China

Powerful Essays
1. Introduction
1.1 High Value of Skin-Care in China
The skin-care industry is worth a whopping $24 billion in the $160 billion dollar beauty industry (“Pots of Promise”, 2003). In China, the Chinese place a high value on beauty and skin-care because they fear ageing (Lin, 2013). Because of this and the growing incomes of the Chinese in China, the skin-care industry is doing extremely well in China where ‘skin care represents 40 per cent of the cosmetics and toiletries market’ (Mobius, 2013, para. 7). As such, many companies have capitalised on this trend and increased their shares in China’s skin-care market (Lin, 2013).
Although Nivea (refer to Appendix A for company profile) already owns a significant market share in China (Mobius, 2013), we still rely heavily on European markets for revenue (MarketLine, 2012). MarketLine (2012) reported that 60.6% of our revenue came from the European markets. Due to the Eurozone Crisis, European countries are facing depressed economic activity. Consequently, consumers in the Eurozone now have less disposable income, and are spending less on beauty products (Lin, 2013). If we continue relying heavily on these economies, our revenue cannot be sustained. Thus, it will be beneficial for Nivea to expand its existing market share in China to reduce reliance on the dismal European economies. Considering the high value of skin-care in China, a viable market to start expanding our market share would be skin-care.

1.2. The Plan
The purpose of my report is to explore the ways in which Nivea can reduce its reliance on the European markets by creating a new skin-care product which caters specifically to the interests of the consumers in China.
At the moment, Nivea does not have any skin-care products w...

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