Beauty Community – Beautiful outlook April 12, 2018

Multiple-product, multiple-channel strategy & o2o marketing approach in focus in FY18

The tone of the recent ‘Opportunity Day’ meeting on Mar 14, 2018, was generally positive and upbeat. Management guided for sales growth of at least 20% y-y in FY18. Same and new store sales growth would be one of the potential growth boosters as BEAUTY plans to add 34 new outlets, comprising 22 Beauty Buffet outlets and 12 Beauty Cottage shops to its domestic branch network this year. We predict its same-store sales growth (SSSG) will continue to grow at a healthy pace of 15% y-y in FY18. If the above branch expansion plan goes as planned, BEAUTY is expected to have a total of 379 outlets at end-FY18, comprising 283 Beauty Buffet outlets, 87 Beauty Cottage shops and 9 Beauty Market stores.

Domestic sales aside, overseas sales should also provide a further boost to the top-line sales on the back of a steady increase in the point-of-sales count under different platforms of an independent shop, sales counter and shop-in-shop. BEAUTY also plans to add new distribution agents in Cambodia and Malaysia this year. In the latest move, it is set to sign deals with two major wholesale distributors to set up cross-border e-commerce platform in China. In addition, overall sales should get an additional lift from modern trade/convenience store sales after BEAUTY plans to increase its SKU and point-of-sales count. E-commerce sales should also benefit from advanced technologies. BEAUTY will continue to focus on its online to offline & offline to online (o2o) marketing strategy to rev up sales on the back of viral marketing in tandem with new product launches.

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