1. Executive Summary
Seri Beauty Secret is a company that will create a brand concept consisting of beauty
care, personal care and cosmetics. We will create a brand that is exclusive herbal base
product for men and women. We are seeking investment to fund the creation of the
brand and startup. The plan that follows explains our market, our value proposition and
our market segmentation strategy. The financial plans provide a clear view of our sales
and profit forecasts. These plans show how Seri Beauty Secret will reach profitability in
our second year of operation and generate shareholder return on equity within three
years. After three years, we will enter new form of market which is multilevel
marketing.
Mission
To establish Seri Beauty Secret as an important brand that represents quality in beauty
care, personal care and cosmetics. We will accomplish this using high quality
manufacturing and research, a marketing program, a distribution network, and also
internet presence. We will also export our brand into international markets especially
the Middle East. We will fully utilize our connection in Ministry of International Trade
and Industry.
By utilizing this multi-channel approach we will be able to reach the niche market for
quality personal care products and beauty care products. It will allow us to develop Seri
Beauty Secret as the brand for quality skin and body care products within our target
market.
We will also plan to enter multilevel marketing, where buyers are salespeople who are
expected to directly sell products to consumers by means of relationship referrals and
word of mouth marketing.
The Company
Seri Beauty Secret is a Malaysian corporation. The company is 30% owned by
Muhammad Hidzir bin Ismail, and 70% by KPUNB Niaga Berhad. The board will consist
of three members: Mr. Muhammad Hidzir bin Ismail, Mr. Che Wan Darul Ridzwan, and
an outside director appointed by Mr. Che Wan Darul Ridzwan.
Mr. Muhammad Hidzir bin Ismail has 5 years worth of experience in the beauty care
industry. He has held senior position as chemist with a major company in this area. He
was involved in formulating numerous successful brands for major company in the
industry including Kzanah by Cosway, Bali Secret by Binary Singapore, and DIEM Duroil
range, for men’s health. Mr. Che Wan Darul Redzwan is the company president for
2. KPUNB Niaga Berhad. He has been with Ministry of International Trade and Industry for
a few years before becoming president of KPUNB Niaga Berhad.
The company's main office is located in Wangsa Maju. The leased office space and
warehouse should be sufficient for planned staff size growth within the first few years.
From Year 1 we will grow in head count from three to seven. The growth will consist of
store personnel, admin staff, sales and marketing manager and goods driver. We
believe the plan shows a controlled and conservative ramp up of personnel.
Products
Skin and body care products will be developed and produced at our contract facilities in
Petaling Jaya. We will develop strategic alliance with accredited laboratory with
operation space and transit storage of 16,000 sq. ft. Our contract facility is a laboratory
and manufacturing plant complete with research and development that is ISO
compliant, GMP (Good Manufacturing Practice) and HALAL certified. Our associated
laboratory is structured for the production of Cosmetics, Skin Care, Toiletries and
Herbal Products catering to both local and international markets. In addition to
manufacturing cater to the demand of our export market, our research and
development facility and services like Original Development Manufacturing (ODM) and
Original Brand Manufacturing (OBM) are available for the creation of such self-owned
brand. In this direction our laboratory caters to develop, design, manufacture and
registration for NOT (Notification Number) and HALAL certification as well. The
manufacturer has in house capabilities to produce original and exclusive product
development and analytical testing. All products will be approved and certified by
Malaysia Health Ministry.
Seri Beauty Secret will have two product line, our SPA line and our export line. SPA line
will include skin care, facial care, and hair care, whilst export line will include women’s
beauty range and men product range. Within the SPA product line, we have skin care
line which we will offer a wide array of products including body scrubs and body
massage oils. Within the facial care line, we will offer products including facial cleanser,
facial scrubs, facial mask and facial massage cream. Other products include hair
shampoo, hair conditioner, hair treatment cream, and scalp care scrub. Future products
will be in the traditional Malay remedies, such as herbs and jamu direction including
post natal care and jamu line. For our export line, we will make few products which is
supplement for men health and virility, whitening cream in women’s product range,
moisturizing cream, facial cleanser and facial serum for women. Future products may
lean towards personal care (shower range, scrub range, slimming range, hair care) or
cosmetics (make ups, anti-acne range, and beautification). Another niche market is in
health range (premix coffee, traditional pills, supplements, double stem cell).
3. Our pricing strategy is to position our products with a shelf price that is in the mid to
lower quadrant of high-quality products and brands. We will accomplish this by making
careful market comparisons and adjusting our packaging size.
We believe our ability to create future product opportunities and growth will only be
limited by our imagination and our ability to attract talented people who understand the
concept of branding.
The Market
Seri Beauty secret will occupy a cosmetics and beauty care market position. Within
each category significant brands do exist. Quality and price vary widely within each
group. Seri Beauty Secret will be positioned as a quality brand. Health products base
industries contributed RM54.5 billion for the 10th
Malaysia plan (2011-2015) and
forecasted another RM86 billion for the 11th Malaysia plan (2016-2020). The actual and
forecasted growth for health products is based on the industry resilient and robust
movement during the economic downturn during the 1998 economic collapse. Despite
the economic downturn, the health products industry product still managed to secure
RM18.8 billion sales in 1998. Based on records, the industry still contributed RM23.4
billion during the 8th Malaysia Plan (2001-2005), which is 24.4% growth and RM27.13
billion (15.9%) during the 9th Malaysia Plan (2006-2010). With USD 2.91 billion worth
of sales in 2011, Malaysia has become 11th
world biggest health products producer
compared to United Sates (USD29.87 billion) which is in the 1st
place and Japan in 2nd
(USD23.86 billion). The global alternative medicine sector is expected to reach close to
$115 billion by 2015, according to Global Industry Analysts. Market growth is fuelled by
a trend toward herbal and nature-based products based on the presumption these
products may cause fewer side effects than modern medicines.
In the skin care and cosmetics category the competition can be divided into three
groups: Commercial--i.e. MAC, Origins, Philosophy, and Shesheido; Clinical--i.e.
Clinique and Clarins; Spa--private label brands associated with spas.
In Seri Beauty Secret future plan, we will enter new market which is multilevel
marketing. Multilevel marketing is a huge business. In 2011 direct selling (the vast
majority of it through multilevel marketing) by around 16 million distributors generated
sales of almost $30 billion in America. Worldwide, some 92 million distributors grossed
$154 billion, according to the Direct Selling Association, an industry group. Malaysia is
poised to be one of the largest multilevel marketing countries in Asia, with expected
revenue of RM8 billion in 2020. Two Malaysian companies are ranked among the top
global MLM companies – Cosway Corporation and DXN Holdings Bhd. As of February
2013, Cosway is ranked 27th
with DXN at the 28th
spot with annual sales of US$433
million (RM1.43 billion) and US$420 million respectively. At the top of the ranking were
American-based Avon Products Inc and Amway with annual sales of US$11.3 billion and
US$10.9 billion respectively. Other than the US and European markets, India, China,
4. South Korea, Malaysia, Indonesia and the Philippines are currently leading the Asian
multilevel marketing segment in terms of revenue. The total turnover from Malaysia’s
multilevel marketing sector has grown to RM3.48 billion in 2010 compared with RM3
billion recorded in 2003. According to the World Federation of Direct Selling
Associations, Malaysian MLM segment retail sales for 2012 increased 7% year-on-year
to US$4.67 billion in terms of sales.
The Customer
Because Seri Beauty Secret is a combined boutique (direct to SPA user) and export
strategy, our target customer must be broken into two distinct groups, the SPA user
and the export market (purchaser).
Our targeted end user is between the ages of 20 and 65. They are female urban
professionals with at least some high school education. This consumer has an active
lifestyle. They are concerned about social and environmental issues. Mind and body
wellness are important to them. They belong to a health club; take yoga, or pilate's
lessons. The effects of aging and the maintenance of a youthful appearance are a part
of their life. We will reach the consumer through four distinct channels which are Spas
and Health Clubs, Lifestyle Retailers, Cosmetic Specialty Retailers, and Boutique
Department Stores.
Our target customers for export market will be wholesalers or resellers in their
respective country who recognize the needs of this consumer and who she identifies
with. We will reach the consumer through export exhibitions and international trade
expos and seminars.
There are a number of new demand trends that have impacted the market and created
greater opportunities. These trends include a returning to age old, time proven, natural
remedies; more consumers that are looking for more holistic and healing benefits from
her skin care products, and today's consumer being more informed and more inquisitive
about the benefits of her personal care products.
Financial
In order to launch its unique product line Seri Beauty Secret requires an initial outlay.
Seri Beauty Secret is seeking to raise capital from investment venture capitalist. The
interest rate and loan agreement are to be further discussed during negotiation. The
financing will be used for the following:
• Development of the Company’s office and warehouse location.
• Financing for the first nine months of operation.
• Capital to purchase the initial inventories of proprietary cosmetics.
5. Seri Beauty Secret will become profitable in our first year of operation. Initial growth
will be financed by a combination of equity investment and debt financing. Our ratios
are well within prudent limits and our growth plans are challenging, but realistic.
1.1 Objectives
1. Launch Seri Beauty Secret products by the second quarter of Year 1.
2. Launch Seri Beauty Secret export line by the fourth quarter of Year 1.
3. Achieve an above median maintained margin rate by the end of Year 2.
4. Achieve regular customer base of at least 4 companies.
5. Increase sales by 15% during the second year of operation.
6. Position Seri Beauty Secret for a successful Multilevel Marketing mark in 2019.
1.2 Mission
To establish Seri Beauty Secret as an important brand that represents quality in beauty
care and cosmetics. We will accomplish this in the following ways:
1. High quality manufacturing and research.
2. A creative marketing and PR program.
3. Creation of products for customers by 2015.
4. Development of a distribution network.
5. The successful launch of a Seri Beauty Secret web presence.
1.3 Keys to Success
1. Quality product.
2. Manpower.
3. Product logistics and quality control.
4. Product placement in key spa and boutique.
Company Summary
6. Seri Beauty Secret is a multi-channel business, combining a spa distribution network, e-
commerce, and will be an active player in trade exhibitions. By utilizing this multi-
channel approach we will be able to reach the niche market for quality personal care
products rapidly and efficiently. It will allow us to develop Seri Beauty Secret as the
brand for quality skin and body care products within our target market. Our target
consumer is interested in total mind and body relaxation. She most likely participates in
yoga, tai chi, pilate's or some form of mind and body program. She is a professional
over the age of 25 with a hectic lifestyle and high disposable income. Her busy lifestyle
creates the need for self centering and pampering. She appreciates quality-–especially
in concert with service and selection. Seri Beauty Secret will provide this customer with
a total relaxation brand. We are working with some of the best manufacturers to
develop, and bring to market, high-quality products for skin and body care. In addition
we have developed an export line of facial care, a natural extension of the brand. These
products have been developed utilizing the finest natural ingredients and proven
efficacy. Seri Beauty Secret will provide the active female consumer with a brand of
beauty care designed for her and sold in an environment she can relate to.
Office and Warehouse:
Our first location will be around the area of Wangsa Maju. We will open an office at the
front of the shop while our warehouse location is around the rear area. The location
should be at ground level floor for easy loading and unloading of goods. We
will apply retail and wholesale license for cosmetics products and therefore
our warehouse will be monitored by Ministry of Health Malaysia. Our
warehouse will be visited for periodical audit and initial audit by Ministry of
Health Malaysia.
Spa Line:
The first customer base is scheduled to be Seri Spa. The spa has 3 other spa locations
which our target market resides. Seri Spa will be undergoing major branding changes
and will open new locations for total relaxation spa. We will provide Seri Spa with Seri
Beauty Secret products for beauty care and relaxation for its consumers.
Export Line:
We plan to launch our export line at a trade exhibition show in the third quarter of our
first year. We will enter trade exhibitions through our directors’ connection in Ministry of
International Trade and Industry, where we will secure a partnership with a well-
respected distributor at the country of target. Through this partnership we will be able
to gain key positions in the field and secure more distributors and wholesalers. The
wholesale strategy will target select spas, department stores and specialty stores that
are recognized trend leaders. This product positioning will further establish the brand
image of Seri Beauty Secret.
E-commerce:
We will develop our initial Internet capabilities as a combination business-to-business
7. tool and e-catalogue. Our site will be simple and direct with minimal cost. Many of our
products are consumable. We will be able to establish a use profile and contact the
customer via email when she should be running low, to remind her, at the same time
offering her an option to click and replenish. This contact will enable us to suggest add-
on items based upon preferences of other users of the same item(s). In addition the e-
commerce platform will provide us with a valuable wholesale tool. We will provide client
companies with an access code that will allow them to place orders and utilize our
product knowledge database as a training tool for their employees in our client portal.
2.1 Company Ownership
Seri Beauty Secret is Malaysian corporation. The company is owned by Mr. Muhammad
Hidzir Ismail, and Mr. Che Wan Darul Ridzwan through KPUNB Niaga Berhad as its
president. They are the founders. Mr. Che Wan Darul Redzwan is the president and
owns 70% of the stock while Mr. Muhammad Hidzir Ismail is the vice president for
product development and owns 30% of the shares. Additional share options will be
provided to members of the board of directors. The board will consist of three
members: Mr. Che Wan Darul Redzwan, Mr. Muhammad Hidzir Ismail, and one outside
director appointed by Mr. Che Wan Darul Redzwan.
2.2 Start-up Summary
Start-up costs are shown in three areas. The first is in the start-up table, the second is
within the cash flow assumptions and the third is in the P&L.
1. Start-up expenses: legal (incorporation and trademark registration), stationery
(business cards and office supplies), etc., brochures, consultants (graphic design
for logo and packaging), research and development (architecture fees for store
and trade fixture design).
2. Start-up costs expressed in year one cash flow.
3. Start-up costs included within year one P&L: brand marketing, management
staff, travel costs to coordinate product development.
2.3 Company Locations and Facilities
The company's main office will be around the area of Wangsa Maju. We will open an
office at the front of the shop while our warehouse location is around the rear area. The
office will be approximately 300 square feet. An additional 700 square feet of space will
be the warehouse. The location should be at ground level floor for easy loading and
8. unloading of goods. We will apply retail and wholesale license for cosmetics products
and therefore our warehouse will be monitored by Ministry of Health Malaysia. Our
warehouse will be visited for periodical audit and initial audit by Ministry of Health
Malaysia. This should be sufficient for planned staff size within the first few years. The
company will have a five-year lease on the current space with an additional five-year
option. Distribution in the first year will be managed from warehouse facility in the
same location as the office.
Skin and body care products will be developed and produced at our contract facilities in
Taman Desaria, Petaling Jaya. We will develop strategic alliance with accredited
laboratory with operation space and transit storage of 16,000 sq. ft. Founded in 2010, it
is a total certified manufacturing facility of skincare, body care, hair care, personal care
and toiletry products, catering to both local and international markets. Complete with a
research and development laboratory, it is a centre capable of developing proprietary
product of superior quality. It caters our need of registration NOT (Notification Number)
and Halal certification. Equipped with cutting edge technology and staffed with a team
of qualified technicians, their research and development facility offers services in
original development manufacturing (ODM) and original brand manufacturing (OBM),
and lead by an experienced researcher with skincare, body care, hair care, personal
care and toiletry products. The facility is certified with ISO 9001:2008 (Quality
Management System), Good Manufacturing Practices (GMP) recognized by Ministry of
Health Malaysia and HALAL certification by JAKIM.
Products
Seri Beauty Secret distributes quality personal care products.
3.1 Product Description
SPA Line
The initial launch for SPA line of products will be our skin care range. The products in
this range will be developed in our contract laboratory in Petaling Jaya. The details of
our product development and the relationship to the human body will be explained in
greater detail in the marketing section. In this section we only define the initial product
range, each products benefits and our pricing strategy.
Skin Care Range
Body Scrub – Walnut Rose
9. Purpose: Cleans off dead skin cells to promote regeneration of healthy new cells.
Enlightens complexion and imparts radiance to the skin. Softens and purifies the
epidermis. Contains whitening active to lighten skin tone or provide an even skin
complexion by lessening the concentration of melanin. Contains milk fragrance.
Primary ingredients: Spherical micro walnut exfoliates without causing irritation.
Juglans regia provides antioxidant property. Rose water contributes a relaxing effect.
Skin type: All
Use: Every other week for dry and sensitive skins, weekly for oily and normal skin
types. Apply gently on clean skin, rinse with water.
Pack size: 300g
Body Scrub – Ginger Salt
Purpose: Cleans off dead skin cells to promote regeneration of healthy new cells.
Enlightens complexion and imparts radiance to the skin. Softens and purifies the
epidermis. Contains slimming active to breakdown the surplus fat deposits and
activates removal of the lipolytic fats from the cells.
Primary ingredients: Spherical micro ginger and salt exfoliates without causing
irritation. Zingiber officinale provides slimming and refirming property. Salt has natural
relaxing and soothing properties, and it also helps circulation and exfoliates the skin.
Skin type: All
Use: Every other week for dry and sensitive skins, weekly for oily and normal skin
types. Apply gently on clean skin, rinse with water.
Pack size: 300g
Body Scrub – Herbs
Purpose: Cleans off dead skin cells to promote regeneration of healthy new cells.
Enlightens complexion and imparts radiance to the skin. Softens and purifies the
epidermis. Contains herb extracts (to be decided later – cajeput, patchouli, lemongrass,
teatree, citronella, argan oil).
Primary ingredients: Spherical beads exfoliate without causing irritation.
Skin type: All
Use: Every other week for dry and sensitive skins, weekly for oily and normal skin
types. Apply gently on clean skin, rinse with water.
Pack size: 300g
10. Body Scrub – Fruity/Natural
Purpose: Cleans off dead skin cells to promote regeneration of healthy new cells.
Enlightens complexion and imparts radiance to the skin. Softens and purifies the
epidermis. Contains extracts (to be decided later – cucumber, aloe vera, rice milk
extract, AHA extract, wheatgerm).
Primary ingredients: Spherical beads exfoliate without causing irritation.
Skin type: All
Use: Every other week for dry and sensitive skins, weekly for oily and normal skin
types. Apply gently on clean skin, rinse with water.
Pack size: 300g
Body Massage Oil – Argan Oil
Purpose: Ultra-soothing formula and rich in antioxidant Vitamin E and contains
Sunflower Oil to moisturize and nourish skin. An aromatherapy blend of essential oils
boosts body, mind & mood. It is based on Organic Argan Oil combined with Sweet
Almond Oil, Sunflower Oil, Wheat Germ Oil, Geranium Oil, Lemongrass Oil, Citronella
Oil, Lime Oil and Vitamin E. This hydrating, restorative and aromatic infusion stimulates
and excites the senses whilst coating and penetrating the skin to leave it revitalized,
beautifully soft and glowing with natural vitality.
Primary Ingredients: Argan oil helps moisturize, repair and soften dry, rough skin. It is
a hydrating, anti-aging, regenerating oil that restores and balances the skin and
senses. It is rich in essential oils with regenerating and anti-inflammatory properties.
Organic Argan Oil has an exotic bioactive component including skin regenerating
essential fatty acids. Wheat germ and lime tones the contours of skin and muscles,
sunflower oil moisturize and nourishes skin.
Skin types: All.
Use: Massage into freshly cleansed skin at the end of a busy day, or add to running
water for the ultimate bath. Place a towel under body to protect bedding from oil.
Pack size: 120ml
Facial Care Range
Facial Cream
11. Purpose: Helps reduce moisture loss while drawing and absorbing moisture from the
air. Skin is smooth and clarifies skin while soothing and hydrating. Improves the
appearances of dark spots and brightens the skin. It provides equilibrium for cutaneous
functions. It regenerates, while providing firmness. It also maintains hydration of the
epidermis.
Primary ingredients: An extract that provides hydrating and protective properties that
protect against our increasingly aggressive environment. Shea butter nourishes skin
and acts against dehydration. Squalane is a healing botanical lipid with a high affinity
for skin to instantly restore and replenish. Apricot Kernel Oil which is highly refined oil
naturally rich in vitamin E and essential fatty acids that works to condition and soften
skin. Glycerin protects the skin and helps it retain moisture.
Skin types: Dry and Normal
Use: Gently massage a few drops onto clean and toned skin each morning.
Pack size: 50ml
Facial Cleanser
Purpose: Cleanse off the face to remove make ups, sebum and dead skin cells. It is a
mild cleanser that helps with hydration and creates healthy skin layer. Minimizes
irritation to the skin with natural ingredients and softens skin. Whiten and fight skin
aging with high level cleansing & moisturizing. To remove stubborn dirt, excess oil and
make-up. To deeply cleanse pores. Contains mild formula to thoroughly cleanse skin
and remove makeup without over-drying or stripping skin of its natural oils. Dissolves
excess oil, dirt, and debris. pH balanced to maintain skin’s natural balance.
Primary ingredients: An extract that provides hydrating and protective properties that
protect against our increasingly aggressive environment. Shea butter nourishes skin
and acts against dehydration. Witch Hazel Extract provides long-lasting deep hydration
of the upper epidermal layer and to tone the skin. It is enriched vitamin A for skin
regeneration. Squalane is a healing botanical lipid with a high affinity for skin to
instantly restore and replenish. Avocado Oil, derived from the fruit of a tropical
American tree, is a rich, fatty-acid emollient. Avocado Oil is known to be the most
moisturizing of any fruit oil. It is also a natural source of Amino Acid proteins, Vitamins
A, D, E, and potassium. Helps to restore the natural moisture of the skin.
Skin types: Is suitable for all skin types but most beneficial for sensitive skin.
Use: Apply on face, around eye contour area and on the neck after a gentle exfoliation.
Allow to settle for three to five minutes, then wipe off excess with a soft tissue.
12. Apply a small amount to clean fingertips and gently massage into damp facial areas in
upward, circular motions, avoiding the immediate eye area. Rinse thoroughly or remove
excess with a damp wash cloth.
Pack size: 135ml
Facial Mask
Purpose: Smoothes skin. Regenerates, enlightens and firms the skin. Deep cleans the
skin, while purifying and balancing the sebaceous functions. Maintains hydration of the
upper layers of the epidermis.
Primary ingredients: Laminaria digitata extract. This brown algae has anti-lipasic and
sebostatic activities to fight against inflammation and regulate sebaceous secretions.
Critmum maritimum extract rich in essential oils that purify the epidermis and boost
cellular regeneration. Vitamin A palmitate, to reinforce suppleness.
Skin types: Oily and combination skins.
Use: Apply on face (except eye area) and neck after a peeling or when skin is tired.
Allow to settle for five to seven minutes, then gently remove excess.
3.2 Competitive Comparison
3.3 Sourcing
Skin care
Pricing structure - skin care
3.4 Future Products
Market Analysis Summary
13. 4.1 Market Segmentation
4.2 Industry Analysis
4.2.1 Main Competitors
4.3 Target Market Segment Strategy
4.3.1 Market Trends
Strategy and Implementation Summary
