Tue, Jul 22, 2003 - Page 10 News List

Formosa tackles skin-care market

FOCUS ON FACE The company hopes its big Chinese Valentine's Day campaign will help the public connect it with beauty, not just chemicals

By Annabel Lue  /  STAFF REPORTER

Formosa Petrochemical Corp (台塑石化), a subsidiary of Formosa Plastics Group (台塑集團), plans to test the water of the local skin-care market by promoting its own brand beauty products for this year's Chinese Valentine's Day, a company official said yesterday.

"In an bid to increase publicity about Formosa's skin-care products, we decided to spend more than NT$1 million to launch our first marketing activity [for the product]," said Yang Kun-lieh (楊昆烈), a section chief of Formosa Petrochemical, the nation's second largest refiner.

For the coming Valentine's Day, the company has decided to lure customers with Swarovski crystal bracelets.

"People buying a NT$2,400 gift set will get a bracelet included [with their purchase]," Yang said.

Chinese Valentine's Day -- or "Lover's Day" in Chinese -- falls on the seventh day of the seventh month of the lunar calendar, or Aug. 4 on the solar calendar this year.

The company hopes to generate over NT$10 million in just one month with the promotion, Yang said.

In March, Formosa Petrochemical started producing beauty products commercially, including a facial cleanser, facial essence and gel under the brand name "Forte."

Prior to the launch, the company had worked on the new business line for more than two years with Chang Gung Univer-sity's College of Medicine. The university is a Formosa Plastics Group subsidiary.

"Eyeing the profitable skin-care market, Formosa Petrochemical wanted to be part of it," Yang said.

Demand for skin-care products is on the rise. Over the past 12 months Taiwanese spent more than NT$1.4 billion on products to make them look good, a 38 percent increase over the previous 12 months, according to statistics from ACNielsen Taiwan.

However, the company is having a hard time turning Forte into must-have products.

"I had no idea that Formosa is producing skin-care products," said Elaine Hsu (徐芸筠), 29, a security company employee.

She said she would be reluctant to choose Formosa products, because "I don't feel comfortable imagining applying Formosa produces to my face."

Hsu said Formosa's image centers on producing oil, not beauty products.

Market watchers also said the lack of marketing skills is proving a drawback for Formosa.

"Formosa Petrochemical lacks experience in dealing with individual shoppers," said Raymond Yang (楊晴華), a retail-industry analyst at KGI Securities Corp (中信證券).

The lack of know-how in marketing, pricing and branding may make it difficult for the company to make a lot of money in the retail market, he said.

An ACNielsen Taiwan staffer noted that there is limited room in the market for Formosa.

More than 60 percent of the skin-care product market, in terms of sales, is controlled by foreign brands, and most local brands are less competitive, according to Frances Wu (吳俍瑩), an ACNielsen retail analyst.

Yang admitted that Formosa's employees are having to learn new marketing skills ever since the company decided to put its products on retail shelves earlier this year.

"It is all new for us, because we have not sold daily necessities to end users," Yang said.

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