A Korean investor shares his difficulties, advantages when starting cosmetics business in Vietnam
Recently, the demand for beauty has been increasing, every woman wants to become beautiful and perfect. In particular, the natural beauty of Korean stars and the wave of Korean cosmetics have been spreading to many countries in the world, including Vietnam. Today, we are pleased to introduce an investor in Kizuna 2 Serviced Factory, which is operating in the cosmetics industry, Seoul Vietnam Cosmetics JSC (SOVICOS JSC). SOVICOS JSC was established by Korean and Vietnamese investors on May 24, 2016 and specializes in the production of cosmetics. Below are the valuable shares from Mr. Kwon Shibum – representative of SOVICOS JSC.
Kizuna: Would you please introduce briefly about Seoul Vietnam Cosmetics JSC
Mr. Kwon: Based on the experience gained from many years working in cosmetics sector in Korea, when recognizing the potential and development of the cosmetics industry in Vietnam, I and some other shareholders established SOVICOS JSC and placed its head office at Kizuna 2 Serviced Factory.
Machines and the main materials used in our company are mostly imported. Moreover, the project is implemented by the experts from Korea with more than 30 years of experience from the design stage to the installation of machinery, operation stage, so I guarantee that the quality of my products is the best in Vietnam.
We are now starting with a 1,000 m2 workshop and we have confidence that our company will expand 10 times in near future.
Kizuna: What do you think are some points that differentiate your products from other cosmetics brands?
Mr. Kwon: Currently, our company focuses on hair products such as dyes, bends, stretchers, etc. and will later develop skin care products.
We already have a distribution channel with many partners, so we focus on production and product development.
Kizuna: We know that your products are supplied to both domestic market and export, so what are percentage of supply to these two markets? And where is the main export market of your company?
Mr. Kwon: Since it is a newly established company, we mainly focus on supplying the domestic market this year, and we plan to boost exports next year, mainly in South East Asia.
Kizuna: What were the reasons that made you chose Vietnam as an investment place?
Mr. Kwon: I have lived in Vietnam for more than 10 years and understand well about Vietnam, so I have confidence in this country.
Kizuna: How long did it take you to make this decision?
Mr. Kwon: In the past 10 years, I focused on doing business, not on production. But realizing now is a good time to do production, I made the decision.
Kizuna: Would you mind sharing with us your problems you had or have been dealing while doing business in Vietnam, especially for cosmetics industry?
Mr. Kwon: During the operation, we encountered some difficulties in human resource management related to attracting and retaining employees in the company. Another issue involved the installation of internal wastewater treatment system. We are also working with Kizuna to have the optimal solutions for both of these issues.
Kizuna: What have you done to solve that recruitment problem?
Mr. Kwon: Our company currently has two shuttle buses but due to the various living places of the employees, if they live too far away, it is a bit difficult. We are still trying to recruit and find new solutions to solve this problem.
Kizuna: Could you please share about your business growth in the last recent year?
Mr. Kwon: Up to now, our company has just been established for about 10 months, so it is not stable, I think it will be more stable at the end of this year.
Kizuna: What were the reasons that made you chose Kizuna to place your investment?
Mr. Kwon: Initially I spent about 5 to 6 months looking for an investment place and decided to choose a factory in Binh Duong Province. However, we had trouble getting licenses to open a cosmetic company and, ultimately, it was unsuccessful so we had to choose another one.
The first reason that made me chose Kizuna is its location near Phu My Hung, which is convenient for commuting. Moreover, when I first approached, I found that Kizuna’s service was good, so I decided to choose Kizuna as our investment place.
Kizuna: Would you please share your impression about Kizuna after almost 1 year of operating here?
Mr. Kwon: I like the green and clean environment here, the security is also good.
Kizuna: What will your business look like in five years in addition to expanding market to SEA and expanding factory?
Mr. Kwon: Currently, our company focuses on hair products and because of the small size of the current workshop, there are also limitations on equipment. In the future, I want to build a cosmetic company that produces skin care products, hair products and make-up products. But if so then the current workshop area will not be enough, it should be at least 5 times bigger.
Kizuna: As far as we know, Korean investors often investigate the market through the Korean community in Vietnam or through their friends, is it right?
Mr. Kwon: I am a bit different because I have been here for a long time so I understand the market well. Additionally, in Vietnam there are many Korean associations such as KOTRA and KOCHAM, which have good support in providing information of Vietnam market for Korean investors who want to invest here.
Kizuna: As you said, although you have been living and working in Vietnam for a long time, you still have some difficulties in obtaining initial license for the company. So what advice do you have for new businesses planning to invest in Vietnam?
Mr. Kwon: I think other businesses that want to invest should spend a lot of time to study the market as well as other companies, they should not make decisions too early.
Thanks, Mr. Kwon, for sharing his valuable knowledge and experience with Kizuna. We believe SOVICOS JSC will grow and be more successful in the future.
By Marketing Department – Kizuna JV Corporation