Variables Weight China Vietnam US

1. Acceptable (A), Unacceptable (U) Factors

- Open economy _ A A A
2. Returns (higher number = prefered rating)
a.Barrier to entry (tax rate & technical
0-5 2 4 1
barriers)
b. Market size, present 0-5 4 3 4
c. Market share, intermediate potential, 0 –
0-3 1 3 2
2 years
d. Market Growth 0-3 3 2 1
e. Taste & preferences 0-3 2 3 1
Total 12 15 9
3. Risks (lower number = prefered rating)
Legal framework 0- 3 2 1 2
Competitors 0-5 3 2 4
Economic crisis 0-3 3 1 3
Exchange problems 0-5 3 1 3
Total 11 5 13

I. Product characteristic
- Korean makeup and skincare products
- Position: middle price as drugstores
- Target customer: focus on the age of 18-40 year-old young women.

II. Evaluation of country

As we can see from the risk and opportunity analysis, we choose Viet Nam as the new market
for entering (highest opportunities and lowest risks compared to 2 other markets). Now we will
go into reasons in details.
 2.1. Open economy

-Despite the fact all 3 countries are classified as acceptable open economies however the level
of openness is different in each country and the most ‘global’ one to Korean products with lots
of regional and bilateral agreements for instance: FTA, Korea-Viet Nam agreement.

2.2.Barrier to entry

China and the USA have low scores in this sector for the reason that the procedure for a foreign
country to entry China market is complicated and requires lot of stages. On the other hand, the
US ‘s government emphasizes on strict legal framework especially to brand new cosmetics.

2.2. Market size

As we all know, China is now the most populous country all over the world ( population:
1,409,773,089 accounting 18,47% of the world population) and GDP per capital is 7755 USD. With
such a huge market, China has always been considered as the promising market for a any products.
USA also has high score in this element with high GDP/capital and huge volume of population ( the
fourth most populous nation).

Although Viet Nam is considered not as a significant market when compared with 2 giants however
as a developing country with average age of 2017 is around 30.8 (our target customers), Viet Nam is
a promising market to enter.

2.3. Taste and preferences for Korean cosmetics.

To China market, there are two main trends. The first one is to purchase domestic brands
(approximately 50%) and the second is to purchase high-end cosmetics from foreign brands->
no room for our products
To USA, they favor worldwide brand name from France or Germany not Korea.
While Vietnamese people find Korean cosmetics attractive for various factors: the price, a great
of variety and products suitable for Asian. Actually Korean cosmetic run first in the list of Viet
Nam’s partners (30% of total imported cosmetics)

III. Risks

3.1.Competitors:

As China has long been considered as ‘a big cake’ to enter, nowadays there are so many competitors
especially the domestic ones who have a better knowledge of local taste and preference.
USA’s market has been well-organized by many famous brand therefore, it is difficult for us to enter

3.2. Economic crisis and exchange rate

Due to the trade war between China and USA, the economies of 2 big powers have been negatively
affected and there hasn’t any signs of an end. So it’s is risky to choose China or US as our next market (
economic instability leads to the fluctuations in the exchange rates of both US and china)

Viet Nam –a stable economy may be a better location to have the first steps in.