International Marketing of The Honest Company

International Marketing
Hult International Business School, San Francisco campus
The Honest Company
Industry trends, statistics and forecast
Author: Team 7
Cohort: Bay Bridge
Professor: Pete Boland
Date: March 17, 2016

Index I
Index
Index..................................................................................................................................I
Figure Index.....................................................................................................................II
1 The Honest Company ..................................................................................................1
1.1 What it Does............................................................................................................1
1.2 How it all Started......................................................................................................1
1.3 Where it is currently.................................................................................................1
1.4 Product Portfolio (Extract).......................................................................................2
1.5 What next?...............................................................................................................2
1.6 What are limitations to the research? ........................................................................3
2 China..............................................................................................................................3
2.1 What is happening in China?....................................................................................3
2.2 How to penetrate this market?..................................................................................4
2.3 What are the latest trends?........................................................................................4
2.4 What are the future prospects of this market?...........................................................7
2.5 What are the main Distribution Channels in China? .................................................9
2.6 How is E-Commerce market in China?.....................................................................9
2.7 What are our Positive short- and long-term growth drivers?...................................10
2.7.1 China’s relaxation of its one-child policy..............................................................11
2.7.2 Product price hikes and quality upgrades .............................................................11
3 Launch Strategy..........................................................................................................12
3.1 How should we Brand our Product?.......................................................................12
3.2 What should be the Pricing Model? ........................................................................12
3.3 How should we Promote our Brand?......................................................................13
3.4 What Distribution channel could we use?...............................................................13
4 Conclusion...................................................................................................................13
References......................................................................................................................14

IndexFigure Index I
Figure Index
Figure 1 - Honest Founders............................................................................................... 1
Figure 2 - Baby diapeers - Market Size China ..................................................................... 4
Figure 3 - Retail Sales 2009 - 2014 China............................................................................ 4
Figure 4 - China Baby Products Market.............................................................................. 9
Figure 5 - China E-Commerce Market ............................................................................. 10
Figure 6 - China Retail E-Commerce Sales 2015............................................................... 10
Figure 7 - China Baby Diaper Market............................................................................... 11
Figure 8 - Penetration Rates Baby Diapers ....................................................................... 12

Hult International Business School: Team 7 BB 1
1 The Honest Company
Figure 1 - Honest Founders
1.1 What it Does
The Honest Co. is a privately heald company based in the US with its headquartered located in Santa
Monica, California. The company was established in 2011 and launched in 2012 by Jessica Alba and
her co-partners. It operates in the FMCG (Fast Moving Consumer Goods) sector with non-toxic
household and eco-friendly products (Honest Company Website, n.d.)
1.2 How it all Started
In 2008, after the birth of her first child, Alba found it difficult to find ecofriendly and safe products;
In her quest she met with Christopher Gavigan who ran non profit firm, Healthy Child Healthy
World. They both decided to launch website with word Honest. Alba was on her quest to reform
1976 Toxic Substance Control Act that allowed for more than 80,000 chemicals to remain untested
in household products (Forbes: Clare O'Connor, 2015). During this time she met web Entreprenuer
and trained attorney, Brain Lee, who had hit it big with LegalZoom.com. Lee was horrified when his
son was banned from taking classic PB&J breakfast to school due to the rise in cases of allergies and
children diseases. He brought in Sean Kane with him. The 4 of them launched The Honest Company
in 2011with seed funding of$6 million. The companyLaunched with an aim to satisfy the unfullfilled
need of upper-middle class parents who care about organic, hypoallergenic and natural rising trends
and who are willing to pay more for high quality products. (Clare O'Connor, 2015).
1.3 Where it is currently
The Honest Co. started with 17 products in its portfolio and by 2015 reached 120 products. The
Honest Co. has recorded sales of $52 million in 2012, $150 million in 2014 (Zach Johnson, 2014);
and was valued at $1.7 billion in August 2015 (Valentina Zarya, 2015). Honest sells 80% of products
online via a monthly subscription service and rest in department stores and discount warehouses. As
of August 2014, the company's products were available at retail outlets of the United States and
Canada, such as Whole Foods, Costco, Target Corporation, and Buy Buy Baby. About 75% of
revenues still comes from online commerce, and the majority of that is from the company’s $79.95
monthly bundles of diapers and wipes. Instead, Jessica Alba actively involves with charities such as

Safer Chemicals Healthy Families, ONE, Habitat for Humanity, Project HOME (Honest Company
Website, n.d.) and most important has 5 million Instagram followers on her account. At the same
time, she admits that she feels an intense responsibility to give the children the best possible start
because many are still completely unaware of the toxic risks posed by everyday basic products. The
key principles of Alba’s company are creating a culture of honesty, making beauty, outperforme its
competitors, mattering about service, making sustain life, and having fun!Honest sells 80% of
products online via a monthly subscription service and rest in department stores and discount
warehouses. As of August 2014, the company's products were available at retail outlets of the United
States and Canada, such as Whole Foods, Costco, Target Corporation, and Buy Buy Baby. About
75% of revenues still comes from online commerce, and the majority of that is from the company’s
$79.95 monthly bundles of diapers and wipes. Instead, Jessica Alba actively involves with charities
such as Safer Chemicals Healthy Families, ONE, Habitat for Humanity, Project HOME (Honest
Company Website, n.d.) and most important has 5 million Instagram followers on her account. At
the same time, she admits that she feels an intense responsibility to give the children the best possible
start because many are still completely unaware of the toxic risks posed by everyday basic products.
The key principles of her company are creating a culture of honesty, making beauty, outperforming,
mattering about service, making sustain life, and having fun! (Honest Company Website, n.d.)Honest
sells 80% of products online via a monthly subscription service and rest in department stores and
discount warehouses. As of August 2014, the company's products were available at retail outlets of
the United States and Canada,such as Whole Foods,Costco,Target Corporation,and Buy Buy Baby.
About 75% of revenues still comes from online commerce, and the majority of that is from the
company’s $79.95 monthly bundles of diapers and wipes. Instead, Jessica Alba actively involves with
charities such as Safer Chemicals Healthy Families, ONE, Habitat for Humanity, Project HOME
(Honest Company Website, n.d.) and most important has 5 million Instagram followers on her
account. At the same time, she admits that she feels an intense responsibility to give the children the
best possible start because many are still completely unaware of the toxic risks posed by everyday
basic products. The key principles of her company are creating a culture of honesty, making beauty,
outperforming, mattering about service, making sustain life, and having fun! (Honest Company
Website, n.d.)
1.4 Product Portfolio (Extract)
Baby FMCG Type Price
Diapers
Diapers $ 13.95
Honest Overnight Diapers $ 17.95
Training Pants $ 12.95
Wipes Dispenser $ 19.95
Organic Healing Balm $ 12.95
Diaper Rash Cream $ 9.95
Organic Baby Powder $ 11.95
Soothing Bottom Wash $ 9.95
Feeding
Silicone Baby Bottle 8oz $ 14.95
Silicone Baby Bottle 5oz $ 12.95
Nursing Pillow
Baby DHA $ 19.95
Lactation Plus $ 19.95
1.5 What next?
The company intends to go global. Initially they are planning to start with United Kingdom,

Australia and China. They are also planning to public with their IPO set to launch in August
2016. (Coffey, 2016)
1.6 What are limitations to the research?
Since Company’s Financial are not yet public, we had to make several assumptions on the
markettrends and statisticsas wellascomparison measuresfor analyzingand forecasting the
expansion costs regarding distribution, marketing and advertising, and market adaptation of
products.
2 China
2.1 What is happening in China?
Nappies, diapers, and pants witness growth of 18% in retail value terms to reach CNY 41.2
billion in 2014 and the same segment sees a 3% increase in average unit price in 2014. While,
domestic manufacturers invest in international advanced production facilities to further
upgrade their products. However, Procter & Gamble (Guangzhou) Ltd. still takes the top
position in this market with a value share of 42%. The entire retail sales of baby nappies /
diapers / pants are expected to post a constant value CAGR of 15% to reach CNY 81.2
billion in 2019. (Passport, 2015)
Source: http://www.portal.euromonitor.com/portal/statistics/rankcountries
Figure 2 - Baby diapers - Market Size China

Source: http://www.portal.euromonitor.com/portal/statistics/rankcountries
Figure 3 - Retail Sales 2009 - 2014 China
2.2 How to penetrate this market?
Many U.S. companies in China use agents to create relationships, advice on product
standards, perform businessdevelopment, andoffer marketingsupport. Local agentspossess
the knowledge and contacts to better promote U.S. products and break down institutional,
language, and cultural barriers. The U.S. Commercial Service offers a wide array of services
to assist U.S. exporters to find Chinese partners through a network of offices in Beijing,
Shanghai, Shenyang, Guangzhou, Chengdu, and a partnership with the China Council for
the Promotion of International Trade(CCPIT) to providebusiness matchmakingand related
servicesin14 other major citiesinChina. U.S. companiesare strongly encouragedto carefully
choose potential Chinese partners and take the time to completely understand their
distributors, customers, suppliers, and advisors. Success in China requires a strong
understanding of your business capabilities, development of long-term relationships, and an
in-depth knowledge of this challenging market. Before making a decision to enter China,
potential exporters should consider their own resources, past exporting experience, and
willingness to commit a significant amount of time assessing and cultivating opportunities.
Successful market entry strategies typically demonstrate regionally targeted efforts,
application specific product positioning, well-qualified partners, measures to minimize non-
payment risk, and a game plan for intellectual property protection.
(https://www.weconnectfashion.com/articles/doing-business-in-china-a-guide-to-help-us-
companies-export, 2015)
2.3 What are the latest trends?
Value for Quality
Over the review period, the young generation of parents born after the 1980s became the
mainstream consumer group for nappies, diapers, and pants in China. They were better
educated, wealthier and willing to spend heavily to provide their babies with best things they
could afford, which made high-end brands such as “Huggies” and Kao extremely popular
0
10000
20000
30000
40000
50000
2010 2011 2012 2013 2014
RETAIL SALES 2009-2014 CHINA
Disposable Pants 398.9 Nappies/Diapers 16,412.50
- Junior Nappies/Diapers 2,761.9 - New Born Nappies/Diapers 4,780.2
- Standard Nappies/Diapers 8,870.4

while most domestic brands showed weak performance due to inferior brand images. To
cater to consumers’ rising demand for higher-positioned products, many domestic
manufacturers invested heavily in foreign manufacturing facilities, trying to upgrade their
products in terms of quality, packaging as well as image.
Growth in Diaper Sales
Nappies, diapers, and pants saw value growth of 18% in 2014. The consumer base for
premium brands continued to grow, while low- to mid-range brands’ contracted, which,
combined with rising raw material and labor costs, put upward pressure on the average unit
price. However, to survive the fierce competition from high-end brands and keep as many
as consumers as possible, many mass-market-orientated brands lowered product prices or
undertook long-term promotional campaigns. However, the average unit price increased at
a lower rate in 2014 than that in 2013.
Disposable Pants
Disposable pants remained the fastest-growing category in 2014 with volume and value
growth of 44% and 48%, respectively, due to its small market base and consumers’ better
understanding of this product. Disposable pants are easier to pull on and off, specifically
targeted at toddlers. Previously Chinese consumers lacked knowledge about this type of
product. However, thanks to manufacturers’ consistent efforts in terms of consumer
education during the review period, more and more consumers are aware of the products’
functionality.
Penetration
In 2014, the penetration rate for nappies/diapers increased to 36% while that for disposable
pants reached just 5%. Due to manufacturers’ achievements in providing a variety of
products across all price points, an increasing number of post-1980s generation parents used
nappies and diapers instead of traditional cloth nappies. In terms of disposable pants, their
relatively higher price and limited product awarenessresulted in the small marketvalue share
of 6% at the end of the review period.
New born Nappies vs Junior Nappies
Junior nappies and diapers developed faster than new born and standard ones over the
review period in both volume and value terms. Improved nutrition resulted in babies’ higher
birth weight and they tended to grow faster than before; thus, it took a shorter time for
standard/junior nappies/diapers to be suitable for them. In addition, many young mothers
believed that it to be more beneficial to their new born if they use traditional cloth nappies
and diapers. As a result, the new born nappies/diapersshowed sluggishperformance in 2014
even though manufacturers tried hard to promote them in order to generate brand loyalty at
an early stage.
Change in Beliefs
The traditional belief is that cloth nappies and diapers are made of more natural materials

and thus are more beneficial to babies’ skin. Influenced by this, some young generation
parents havebeen reluctanttouse newborn nappies/diapers. However, sincethepost-1980s
generation of parents are better educated, wealthier, more receptive to modern parenting
skills and also too busy to devote dedicated care to their new born babies, the practice of
using modern nappies / diapers in place of traditional cloth nappies is becoming
commonplace.
Delay in Potty Training
Potty training in China counts as one of the most important stages of baby nursing. Trade
sources indicate that training generally starts when babies are 7 to 9 months old, with the
focus being on the exact time of excretion, which gradually helps babies to adapt to using a
potty. However, because of the accelerating pace of modern lifestyles, it is becoming
increasingly difficult for young parents to devote most of their time and energy to caring for
their babies.
Customer Segments
Chinese consumer market is dominated by a relatively narrow middle class. Less than 2% of
workers earn enough even to pay income tax. So what the world has seen so far is only a
preview of the opportunities to come: 11% of China´s population can be considered middle
class, 2% of earners pay income tax and 770 Million people is the worker population in
China. Chinese consumer spending can be broken down into 7 categories: Looking more
Beautiful, Eating Better, Better Home, More Mobility / Connectivity, Having more fun,
Well-being (Health / Education) and Luxury.
Additional Consumer Behavior
They are more demanding and pragmatic than ever as their horizons expand beyond basic
concerns about product features. Especially, Online to Offline (O2O) Services: O2O can be
defined asanything digitalsuchas a mobile app which brings peopleto shop in offline stores.
Mobile payments are an enabler for O2O wherein customers can shop from offline stores
and use a service such as Alipay to make the payment for the service or product. A food
delivery service like Ele.Me is an example of O2O which allows consumers to order from
local restaurants and connects them to these offline stores. O2O services have accelerated
from a developmental phase to a commercially viable business model across China´s largest
cities in 2015.
Segregation
First, older generationgenerallymaintains“traditional”spending habits, secondMiddle-aged
Chinese oscillate between tradition and new trends and finally and most important younger
generation is becoming more Westernized and quality conscious.
Generation Change
Older generations raised their babies with self-supplied products – such as cotton diapers
and homemade baby food – but younger generations relieson disposablediapers and canned

baby food. New parents and grandparents hope to buy the best products possible for their
children, especially given recent food safety concerns. For example, after the Sanlu Group
melamine-tainted milk incident in 2008, most parents interviewed said they they no longer
trusted local brands of infant formula and would buy imported brands if they can afford
them. In addition, many new parents will turn to Western baby products because the variety
of traditional Chinese baby products is limited.
2.4 What are the future prospects of this market?
Product Innovation in High-end Products
Thanks to increasing disposable income levels, a preference for mid- to high-end products
is likely to become an inevitable trend over the forecast period. Faced with declining market
share, mid-range brands such as Mamy Poko and Anerle are predicted to introduce high-end
products to meet market demand and catch up with premium brands. Future product
innovation will be focused on further improving softness, comfort and absorbency of the
products. Local economy brands that are unable to compete in the upper market are likely
to concentrate on underdeveloped areas and lower prices to attract price-sensitive
consumers.
Growth
Retail sales baby diapers are expected to experience an additional rapid growth with constant
value CAGR of 15% over the forecast period. The penetration rate of nappies, diapers, and
pants was 36% for 0 to 1 year-old children in 2014. A key contributor to sales growth will be
upgrading demand from low-end or mid-range products to premium brands. In addition,
another baby boom is expected following the government’s relaxation of the one-child
policy.
Knock-offs
Fake products are believed to be the primary threat to forecast growth of nappies, diapers,
and pants in China. Chinese consumers are frugal and want to buy goods at as low a price as
possible. Some unscrupulous manufacturers have taken advantage of this and made fake
nappies, diapers, and pants of well-known brands and sold them at a relatively lower price.
Over the forecast period, fake products are still likely to be found on the market, since it is
highly profitablefor these unscrupulous manufacturersand it isoften difficultfor consumers
to tellthe differencebetweenfakeproducts andreal ones when makingpurchasing decisions.
Increase in Disposable Pant Market
Disposable pants are predictedto seethe most dynamic growth with a constantvalueCAGR
of 28% over the forecast period. In 2014, disposable pants accounted for just 5% of the
market in value terms and the penetration rate for this category remains limited at 5%.
Thanks to rising income levels and manufacturers’ consistent efforts in terms of consumer
education, theseproductsareexpectedto gainan increasinglylargerconsumer base (WooEB,
2012).

Modest Price Rise
Average unit price for nappies, diapers, and pants is expected to show modest growth over
the forecast period. Although trading up from low-end or mid-range products to premium
ones will put upward pressure on average unit price, price discounts offered by economy
brands will partly offset this. Moreover, competition is expected to intensify with more and
more foreign entrants, which is likely to lead to more frequent promotional campaigns.
Competition
Cotton material hygiene products are expected to be more popular and represent the
development trend in China. In September 2014, Shanghai Uni-Charm Co Ltd launched its
Yun Rou Mian Bao series of nappies/diapers, which featured a high-end positioning and
aimed to compete with premium brands such as Huggies. The Yun Rou Mian Bao series
received a very positive response from the market, highlighting the success of the company’s
strategic transition from mid- to high-end positioning .
No One Child Policy
Due to the government’s relaxation of the one-child policy, leading players have begun to
expand production capacity to cater to potential new demand over the forecast period.
Enhanced production capacity on the part of leading players will ensure stable supply over
the forecast period, even with strong double-digit retail volume sales growth expected.
Market Potential
Per capita consumption of nappies/diapers/pants of China is still much lower than that in
Western countries. Therefore, there exists a huge potential for the future development of
China’s nappies, diapers, and pants market. Having identified this, some of the leading
manufacturersplan to expand theirproduction capacityinmainlandChina. In addition, more
foreign brands are anticipated to enter this market due to Chinese consumers’ enthusiasm,
which can be seen from the fact that many young parents try to buy nappies/diapers/pants
from overseas markets via the internet.
Organic Products
China is now the fourth-largest consumer of organic products in the world. At the China
International Organic Food Fair, countries like Denmark, Germany, and Australia were
eyeing the potential market and showcasing their dairy, meat, and wine products. China has
731 certified domestic organic food companies and its market share is expected to grow to
1 to 1.5 percent from 2014 to 2018, from the current 0.3 percent.
“China is a market that attracts great attention from the world’s organic traders,” Wang
Yunhao, director of China Green Food Development Center (CGFDC), said at an organic
food fair on May 28. According to a new market report published by Transparency Market
Researchtitled“OrganicPersonal Care Products Marketfor Skin Care, Hair Care, OralCare,
and Cosmetics – Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2012
– 2018, “the global demand for organic personal care products was over $7.6 billion in 2012
is expected to reach $13.2 billion by 2018 growing at a CAGR of 9.6% from 2012 to 2018.

2.5 What are the main Distribution Channels in China?
Increasing use of E-Commerce in China, diapers are distributed through the following 5
channels, withthefirst 3 of theseaccountingfor the majorityof sales, basedon our estimates:
E-commerce.
This includes direct sales through online platforms and sales to online shopping outlets that
resellthe products on to consumers. Also, some diaperbrands leveragebaby specialtystores
to deliver customers’ orders placed online.
Modern channels (retail organizations).
These comprise supermarket and hypermarket chains. While they are still an important sales
channel, diaper sales at these outlets declined by 4% YoY in 2013, according to AC Nielsen.
We expect diaper sales through these channels to continue to weaken in the years ahead,
given declining customer traffic and greater competition from other channels.
Specialty baby stores.
These are stand-alone stores and chains that sell maternity and baby goods. They have been
a fast-growing sales channel in China in terms of revenue and store count over the past few
years. Biostime estimates that there are over 70,000 such baby specialty stores in China at
present, up from 50,000 stores (Anson Chan, CFA, 2014).
Traditional distributors.
These distributors distribute the diaper players’ products to retail stores in low-tier cities,
mom-and-pop shops and some of the specialty baby stores.
Pharmaceutical and medical channels.
These include hospitals, pharmacy chains etc. In some industry research statistics, they are
also classified as modern channels or as outlets serviced by distributors.
Figure 4 - China Baby Products Market
2.6 How is E-Commerce market in China?
China’s explosive growth in shipping is an indication that e-commerce is already expanding
– and has potential to grow even further. Shipping grew 10x from 2006 to 2014. (2006: 1
Billion packages delivered, 2014: 10 Billion packagesdelivered). China’s online retail market
reached 945.1 billion Yuan ($143.5 billion) with a growth rate of 45% in Q3 2015 according

to analysis (Incitez China, 2016)
Figure 5 - China E-Commerce Market
China’s e-commerce retail sales are expected to increase by 42.1% to $672.1 billion,
accounting for over 40% of the global e-commerce retail sales in 2015 estimated by
eMarketer. The e-commerce market in 2018 is expected to reach $1.57 trillion according to
eMarketer. China has become the world’s largest e-commerce market (China Internet Watch
Team, 2015).
Figure 6 - China Retail E-Commerce Sales 2015
2.7 What are our Positive short- and long-term growth drivers?
Industry forecasts call for China’s baby diaper sales volume to see an 8% CAGR over 2013-
20E (Anson Chan, CFA, 2014). We expect the domestic and foreign market players in the
country to benefit from the relaxation of the one-child policy and raise prices on product
quality upgrades. Our industry research indicates that baby diapers should see among the
fastest sales-volume growth of China’s major personal hygiene product segments over the
coming years (Anson Chan, CFA, 2014).

Figure 7 - China Baby Diaper Market
2.7.1 China’s relaxation of its one-child policy
We expect China’s gradual relaxation of its one-child policy will lead to an increase in the
country’s birth rate over the coming years. As announced the couples have the right to get a
second child. Officials from the National Health and Family Planning Commission estimate
that this policy relaxation will lead to an additional 2m births in 3-5 years’ time. This implies
a 12% increase from the number of births in 2013 (Chris Buckley, 2015).
2.7.2 Product price hikes and quality upgrades
Both domestic and international baby diaper brands in China have been increasing their
ASPs since 2012, mainly through product mix upgrades, and we think more is to come on
this front. In this context, Daiwa’s Japan Consumer Staples Sector analyst, Katsuro
Hirozumi, published a report on 28 August 2014 on the disposable diaper market in China
in which he has highlighted the following, which we extrapolate for the China diaper market.
Brand Perception
”High-end disposablediapersmade in Japan should continueto sell, butthose madein China
look set to struggle”. We believe this shows that Chinese consumers’ brand perceptions of
domestic players’ diaper products are currently inferior to those of Japanese players. An
increasing availability of Japanese brands should further enhance Japanese diaper brands’
awareness among Chinese consumers in the coming years. But, we also note that domestic
diaper players are taking steps to enhance their brand awareness (Satsuki Kawasaki and
Taketo Yamate, 2013).
Rural vs Urban Penetration
Penetration of baby diapers was below 35% in 2013 in China (Satsuki Kawasaki and Taketo
Yamate, 2013). The penetration rate was above 90% in coastal areas and tier-1 cities such

as Beijing and Shanghai but was much lower in rural areas. By comparison, the 2013
penetration rate of baby diapers was 95% in both the US and Japan according to Beijing
S&P Information Consult as the next chart shows. We expect the penetration rate of baby
diapers in China to catch up with that in developed countries over the medium to long
term, driven by: 1) an increasing number of educated and young parents, who generally
prefer disposable diapers to cloth nappies for reasons of convenience and hygiene, and 2)
increasing availability as more foreign and domestic brands are expanding their production
capacities in China, launching more high-quality diaper products, and thus raising their
sales penetration in China. For example, an increasing use of online sales channels also
makes it easier for diaper players to penetrate into lower tier-cities at a lower distribution
costs.
.
Figure 8 - Penetration Rates Baby Diapers
3 Launch Strategy
3.1 How should we Brand our Product?
The USP of The Honest Co. Brand is its high quality organic eco-friendly products. It
should position its product for the same. Our research proves this to be a valid product for
the chinese market. The product must further forecast its American origin and Lifestyle as
such an attribute is valued for the quality.
3.2 What should be the Pricing Model?
Our research indicates that the premium diapers in China Sell at 3 Yuan ($0.4). We suggest
to stick with similar price. We could also bundle our products to give a higher value to our

product. This way we can position ourselves stronger in this consumer segment.
3.3 How should we Promote our Brand?
Jessica Alba, as a celebrity mother and CEO has been strong image for the brand. She
should continue doing the same. To add value to her personality, she could hire a Celebrity
mother such as Ziyi Zhang. Ziyi Zhang could be a great personality for the brand not only
because of her place as one of the four Dan Actresses of China (4 Dan Actresses, 2000),
but also for the fact that she is recently becam a mother.
The target audience for the product are those seeking for western culture, primarily the
once who have in the past lived in the western countries and were exposed to their values
and trends.
3.4 What Distribution channel could we use?
The Honest company must continue to use E-commerce and sell its products through its
website. Along with this it can utilize Alibaba.com as it already has a huge market that is
using it. Further, Speciality stores in China have had a huge hit. Therefore, Honest Company
should plan to set up its first set of Flagship stores across Beijing and other big cities. This
would increasethe brand presence. Along with theabove strategies, Honest Co can promote
its brand through Hospitals and baby care centres. It could partner with Doctors for
promoting its products at their nursing homes.
4 Conclusion
As part of the company’s global expension plans, The Honest Company should first target
the Chinese market. By positioning itself as a high quality eco-friendly American brand,
using the online platform along with Flagship stores and promoting Jessica Alba’s Image
along with a Chinese celebrity mother such as Ziyi Zheng, It can expect a significant success
in this market even under the least perferable scenario. We believe after a successful launch
the chainese market will present many future opprotunities for the Honest Company to
penetrate with other baby and personal care products it has in its portfolio.

References 14
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http://www.abs.gov.au/AUSSTATS/abs@.nsf/web+pages/statistics?opendocument#from-
banner=GT
https://www.securepay.com.au/insights/articles/infographic-top-four-consumer-trends-in-australia-and-
new-zealand-for-2015
https://en.wikipedia.org/wiki/The_Honest_Company
http://www.forbes.com/sites/clareoconnor/2015/05/27/how-jessica-alba-built-a-1-billion-company-
and-200-million-fortune-selling-parents-peace-of-mind/#2e3c90ca1f0c
https://www.honest.com/
http://www.portal.euromonitor.com/portal/statistics/rankcountries

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