How Thorakao cosmetics "catches the trend" of green living to restore growth

Once a "famous" brand, however, because it could not compete with foreign cosmetics, there was a time when Lan Hao (Thorakao) cosmetics were knocked off the shelves, now this brand is gradually recovering.

"Once famous" brand

Anyone passing through the intersection of Cach Mang Thang Tam - Dien Bien Phu, District 3, Ho Chi Minh City will always see an ancient building with the brand name Thorakao on it. However, very few people know that this brand is 67 years old.

Thorakao was established in March 1957, at that time the business was just a cosmetic processing facility of Ms. Lan Hao (founder of Thorakao). At that time, the products had difficulty competing with French and American brands because they had the smell of traditional Chinese medicine and used oriental medicinal ingredients.

Dr. Huynh Ky Tran, Chairman of the Board of Directors of Thorakao Cosmetics and Chemicals Company (Mrs. Lan Hao's son-in-law and successor) recalled that at that time, his mother-in-law used a "unique" sales trick: every day, Mrs. Lan Hao sent her employees to the market to ask for Lan Hao cream. Department stores saw the demand and started to buy the product to test. Consumers saw that many people were looking for the new product, so they also bought it to try. Later, when they found it effective and trusted it, more and more people chose Lan Hao cream.

By 1961, when the product line of pearl skin cream, grapefruit shampoo, fragrant soap, Parafine & Brillantine hair gloss under the Thorakao brand sold well in the market, Ms. Lan Hao decided to establish a company named Lan Hao Company.

Lan Hao Company was established with product lines under the brand name Lan Hao cream, Lan Hao cosmetics and then changed to Thorakao cosmetics. The logo of this brand is a stylized angel, expressing the message that the product's effects bring white, smooth and youthful skin like an angel.

At first, thanks to the "decoy" strategy, focusing on relatives to go to grocery stores and shops to order her own products to stimulate customers' curiosity, Ms. Lan Hao quickly brought her brand to a large number of users. Not only quickly establishing a series of 6 branches throughout the South, Thorakao also "made waves" in many countries in the region.

The company expands its market to international markets, selling to many locations such as Singapore, Taiwan, Cambodia, Laos, China, Korea, Australia, New Zealand, Switzerland, USA, Saudi Arabia, Egypt...

Products with the Thorakao brand quickly became famous, winning the hearts of consumers. At that time, with a monopoly mindset and fear that other businesses would copy the brand, Ms. Lan Hao registered a patent for her cosmetic products in 1968.

In 1969, the Company opened a branch in Cambodia and began exporting products to Southeast Asian countries. At that time, many domestic and foreign enterprises came to buy the Thorakao brand or cooperate to develop.

At that time, Thorakao's two advantages were good quality and affordable prices, and there were few competitors in the market. Therefore, the company's products quickly became famous in the South thanks to taking advantage of the natural resources available in Vietnam such as mint, lemongrass, star anise, turmeric, soapberry, ginger, lemon, grapefruit, cucumber... or extracts from aloe vera, aloe vera, moringa, tragacanth gum, mineral mud, snails... This is one of the reasons why Thorakao's products are suitable for the Vietnamese body, while the price is cheap because it does not have to import many production materials.

Dr. Huynh Ky Tran recalls: “Thorakao’s heyday was a period of extremely strong sales, sometimes there was not enough time to produce. At that time, when other companies used tin boxes, leaf packaging… Thorakao had white ceramic boxes with plastic lids on top, which was the most beautiful at that time and the peak of the pre-liberation period.”

However, focusing only on quality and ignoring the evolution of communication methods made Thorakao almost lose everything. Dr. Tran said that in the early 1990s, the country officially opened up, foreign cosmetic brands poured into the Vietnamese market. With a lot of money, a lot of experience and especially modern marketing strategies, eye-catching packaging... foreign cosmetic brands gradually pushed Thorakao off the shelves.

Thorakao brand building in Ho Chi Minh City. Photo: Gia Han

Lan Hao's current successor admits that the reason the brand cannot compete with foreign products is because Thorakao is not only weak in marketing, but Thorakao's distribution system also cannot compete with multinational enterprises.

But Dr. Tran confided: “If we spend a lot of money, the cost will be added to the product. I am a doctor, people are sick, I cannot make them suffer more. Doctors are like mothers, I cannot let my customers bear such unreasonable costs.”

Even in recent years, there have only been a few dozen distributors nationwide with small agents at district and provincial levels. For a cosmetic brand, to compete, only a few dozen distribution staff is too thin, while the distribution team of multinational enterprises must number in the thousands.

Therefore, to maintain sales, Thorakao had to accept outsourcing for competitors and in recent years has been nurturing a strategy to return to its home market.

Catch the green trend to revive

After the failure, Thorakao’s reputation gradually disappeared from the cosmetics market. Even for many years, the elderly in Ho Chi Minh City and the southern provinces who were used to using Thorakao products had to go to the store on Dien Bien Phu Street, District 3 to buy them. And the products displayed on that small shelf were not only traditional products, but also new brand products.

Thorakao captures the green consumption trend with a preference for products made from traditional raw materials to affirm and revive its position.

In the latest appearance of Lan Hao cosmetics successor, Dr. Huynh Ky Tran revealed that Thorakao is planning to launch new product lines, capturing the green consumption trend.

Mr. Tran commented that in the world trend of supporting green living, Thorakao has seen its opportunity to return. Because the company's products are currently mainly from nature, but the problem is to prove that "we are natural products", from there to attract users.

In fact, after the failure, the lesson Mr. Tran realized was humility and concession. According to him, when many foreign partners came in, Thorakao thought that he should be humble before the world's strong brands and choose to make concessions in sharing market share, instead of rushing forward to try to compete with foreign brands, because he thought he had a place in the market in the consumption trends of Vietnamese people. But in the end, that concessionary and modest approach caused the brand to wither.

“Up until now, I realize that at that time, Thorakao was too confident and did not look at the negative aspects of its products. For example, Thorakao's packaging, knowing that the packaging was not beautiful, but not ugly either, and the company needed to save money, so it did not change and just thought that the packaging was a bit "rustic", but the quality was good, Thorakao was still doing well", said Thorakao's Chairman.

However, now the Thorakao brand has chosen a new direction. That is to leave the city and return to the village. Specifically, Mr. Tran said, Lan Hao has decided not to choose mass media to revive the brand and compete with foreign products. In return, Thorakao has chosen to target the popular segment, that is, the rural market share with teenagers. So now Thorakao's sales ratio is 4 parts in the countryside and only 1 part in the city, leaving the traditional and most profitable urban market to foreign brands.

In return, this is a long-term approach, because when young people use Thorakao branded products and feel the product quality, when this age group grows up, goes to the city to study and work, they will continue to find and use Thorakao products, then Thorakao will expand and develop the city market.

“Choosing a niche market is rural areas, students (those with acne during puberty use Thorakao turmeric cream to heal scars), factory workers, Thorakao will not need to advertise anymore. This is also a stable way of life, we will sell at a low price but still maintain quality. Because urban areas are being affected by many forms of modern marketing, especially on TV and social networks, Thorakao knows it will not be able to compete”, Dr. Huynh Ky Tran shared.

In fact, this business has nearly 100 products including skin care, hair care, body care... While everything is getting more expensive with socio-economic development, most of Thorakao's products still maintain a price of under 100,000 VND/product.

In addition, the company conducts programs such as 15 days to return the product if it is not suitable for use, free shipping for orders of 400 thousand, 100% refund for poor quality products...

Thorakao's owner added that recently, Thorakao has focused more on depth, and in the future the company wants to manufacture its own natural products to sell abroad.

Thorakao currently has a domestic and foreign market that always maintains a growth rate of 15%/year, regularly exporting to the US and Middle Eastern countries with over 500 products of all kinds. The domestic market consumes about 55 types of products and they are present in most modern sales channels, supermarkets Co.op Mart, Big C, LOTTE Mart, Emart, Auchan, Guardian, Medicare... In addition, Thorakao also has a distribution company in Singapore to distribute goods to other countries.

In fact, after many changes that seemed to sell itself to foreign companies, Thorakao has gradually recovered in the cosmetics industry when on average this brand still exports 3 containers/month for both domestic and export. For cosmetics, such a number is considered relatively large.

Source: https://baodautu.vn/cach-my-pham-thorakao-bat-trend-song-xanh-de-phuc-hoi-tang-truong-d215406.html