International Expansion Strategy of Jurlique in China

International expansion strategy of Jurlique in China

International expansion strategy of Jurlique in China 1

Executive Summary 3

1.0 Introduction 4

2.0 The Company 4

3.0 The Country Chosen 6

3.1 General Description 6

3.1.1 social and economic overview 6

3.1.2 The Chinese market for skincare and cosmetic products 7

3.1.3 Market trend 7

3.2 Risks 8

3.3 Opportunities 8

4.0 Key issues of the expansion 9

5.0 Specific action to implement country expansion 9

6.0 Nature of the expansion 10

7.0 International business strategy and structure 10

7.1 international strategy 10

8.0 Discussion and conclusions 12

References 13

Executive Summary

This report explores international expansion strategy for Jurlique in Chinese market. The report first gives an introduction on the company, then it provides a country analysis for China to identify risks and opportunities, followed by recommendation on international strategy and action plan for Jurlique. The analysis on the performance of Jurlique and its capacities suggest Jurlique should focus on international markets for strong revenue growth opportunities. The cosmetic and skincare market in China reveal beauty obsessions of the female gender and the trend is increasing. Besides, the established e-commerce and mobile payment platform in China provide new opporunities for Jurlique to dwell on. Jurlique is recommended to form strategic alliance with e-commerce retailers to boost its sales in China and gain competitive advantage by offering quality and premium natural skincare products.

1.0 Introduction

This report works on providing an expansion strategy plan for Jurlique. The report first gives an introduction of the company and performs an analysis for Chinese cosmetic and skincare market. Risks and opportunities within the market was examined. In addition, the report identifies key issues for the expansion and designs a specific action plan for the expansion to address identified risks and opportunites. Eventually a proposal for international expansion strategy is provided and the structure for its operation in China is presented.

2.0 The Company

Pola Orbis Jurlique Holdings Pty Ltd(Jurlique) is the holding company for the Jurlique, which is originally a family company founded in 1985. The company manufactures and markets natural skincare products and herbal medicines. The brand is positioned as a prestige skincare brand in Australia and its products are sold to 22 countries through a various range of distribution channels including brand stores, department stores, retail outlets, spas and online platforms.

Although the company has been selling to Chinese market over own brand stores and online platforms. Its sale performance is unsatisfactory and does not match its capacity and leading position in Australian market. For example, the official online retail store in Tmall, which is the largest online retail platform in China, only reported single-digit monthly sale for its best-selling products (Figure 1).

Figure 1. Sale of Jurlique on Tmall (Tmall, 2017)

2.1 Financial highlight

Figure 2. Financial performance of Jurlique (Richardson, 2017)

2.2 Operation results

Jurlique manufactures all its products in its herbal therapeutic factory in Mount Barker, SA. Its factory uses organic and biodynamic produce from its own herb farm. By making products in-house, Jurlique has managed to produce quality products for all its customers, domestic or internationally.

3.0 The Country Chosen

For target country, China is chosen for its strong economic outlook, increasing demand in skincare and cosmetic import products from consumers and its emerging e-commerce and mobile payment platform.

Jurlique has expanded its business in China, however the outcome of its market expansion show underperformance of many other import cosmetic brands. This report