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Hong Kong Cosmetics Industry Analysis

2075 Words9 Pages

Hong Kong is an important financial center in Asia. Many companies from Mainland China as well as from other foreign countries view Hong Kong as a platform to expand their businesses and as a good way to enter into a new market. Therefore, several industries take the chance to develop in Hong Kong. As the overall economic development, the demand of products to improve living standard also sharply increase. In this article, cosmetic industry in Hong Kong is chosen for further analysis. Similar to the development of cosmetics industry in Malaysia, the cosmetics industry in Hong Kong is also in rapid growth because of the increasing number of working female, increased urbanization, and the increasing self-awareness due to education. “This industry …show more content…

Different from physical stores of some famous brand like Lancôme, Dior and Chanel, which sells products of their own brand. Compared to those expensive products in the brand store, cosmetic products in the retail store is of lower price and customers can buy products of different brands and products made from different countries. There are some popular retail stores like Sasa, Colormix and Bonjour. These retail stores sell cosmetic products in a lower price and thus become the best choice of some young girls who cannot afford to buy luxury cosmetics. Among them, Sasa stands out as a public company and it is the one holding the most storefront in Hong Kong. Therefore, Sasa is representative among all the retail companies. The paper tries to figure out the pricing strategy and the price model of Sasa Company and further analyze what measures they have taken to reach the …show more content…

Therefore, the ultimate demand of cosmetic products is not that easy to alter. When customers go to Sasa’s stores, they can find discounting products all the time. These authors believe that discounting pricing structure may be a part of Sasa’s pricing strategies or they might adapt some similar pricing structure. Lal & Staelin (1984) had did a research on how a seller should develop discount pricing structure and gave advices for seller to design the discount pricing structure with technical feasibility which can minimize the total transaction costs associated with ordering, shipping and inventorying products. As a big retailer which has a great volume of customers, Sasa’s transaction costs account for a large portion in its expenses. If there exists better designed model for Sasa, it might lower more expenses and earn more

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