China is one of the most lucrative and fast growing retail markets in the world. This market offers a wide range of opportunities for foreign investors. Indeed, Foreign-invested enterprises (FIEs), such as Wal-Mart and Carrefour, have already achieved success in China’s integrated retail market. Despite the global economic downturn, China's retail sales increased rapidly to ¥12.5 trillion ($1.8 trillion) in 2009 (up 15.5 percent year on year). Also, China's booming retail sales are mainly due to the steady rise of household income.
Wal-Mart in China
Foreign investors, however, should familiarize themselves with government policies in order to succeed in China’s retail market. In fact, Chinese legislation requires all cosmetics to be tested on animals in order to be deemed safe to be imported into China. The Body Shop, of course, does not test on animals and decides not to export its products to China. While business in India looks promising, The Body Shop may have missed out on market share in the world’s most populous state.
Wal-Mart in ChinaInnovative “natural” products
The Body Shop must consistently revise its design and range of products in order to remain competitive in the market. This is necessary due to technology change and improvement as well as external competition and changing customer needs. As The Body Shop is against animal testing, countless efforts need to be put in research and development sector. Alternatives to ingredients and animal testing are to be developed in order to get the cosmetic products sold in the market. Research and development activities are often costly and require a long period of time to obtain results. Since customers always demand for new product development, The Body Shop must work towards producing new innovations on a regular basis and at minimum costs, in order to prevent competitors such as Face Shop and Skin Food from acquiring the market share.
The Body Shop must consistently revise its design and range of products in order to remain competitive in the market. This is necessary due to technology change and improvement as well as external competition and changing customer needs. As The Body Shop is against animal testing, countless efforts need to be put in research and development sector. Alternatives to ingredients and animal testing are to be developed in order to get the cosmetic products sold in the market. Research and development activities are often costly and require a long period of time to obtain results. Since customers always demand for new product development, The Body Shop must work towards producing new innovations on a regular basis and at minimum costs, in order to prevent competitors such as Face Shop and Skin Food from acquiring the market share.
Done by: Fickey & Hee Yuan
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