Exporting the Beauty of Saigon – Vietnam Case Study

Background

Saigon Cosmetics Corporation (SCC) is a Vietnamese company based in Ho Chi Minh City, specializing in fragrance, cosmetics and toiletries production and distribution. Since 2000, the former state-owned enterprise has been a share-holding company.

IP Management

Product recognition and a wide base of loyal customers are essential success factors in the highly competitive cosmetics market. SCC managers pay close attention to intellectual property (IP) matters and have developed a strategy to actively seek the benefits associated with the effective use of their IP assets.

Using the services of professional and reliable IP agencies in Viet Nam and abroad, SCC ensured that its IP assets were protected before launching any products in the market. As a result, SCC currently owns more than 200 trademarks and industrial designs, many of them at an international level. SCC is also actively engaged in licensing activities both as a licensor of its own intellectual property rights (IPRs) and as a licensee of IPRs from foreign companies.

The bottle of the Miss Saigon® Elegance premium perfume has the shape of a Vietnamese lady wearing a traditional long dress and a leaf hat (Photo: Saigon Cosmetics Corporation)

Trademarks and IP Infringements

SCC registered some of its trademarks abroad using the Madrid system for the international registration of marks. In particular, Miss Saigon®, one of SCC’s leading brands, was filed for registration in several countries using the Madrid system. All SCC brands, including Anderman, Cindy, DeAndre, Essy, Fantasy and Jackson, have specific consumer targets.

Several individuals and enterprises have sought to “free ride” on SCC’s brands through a number of IPR violations. Such challenges exist in both the domestic and foreign markets and SCC has, in some cases, encountered important constraints in enforcing its IP rights.

When faced with violations of its IP, SCC seeks legal advice from both IP offices and professionals and then decides what action(s) to take depending on the probability of a favourable outcome, expected enforcement costs, possible compensation, and other impacts on customers and markets.

SCC recommends that companies develop well-planned branding and IP infringement strategies and assign sufficient resources to protect IP assets from potential violations. In case of infringement, affected businesses should consider the pros and cons of different approaches to deal with the problem in timely and cost-effective ways in the best interest of the company.

Concrete actions taken by SCC to deal with IP infringements include sending official warnings to shops selling counterfeit products, informing customers about infringements, adjusting product labels to facilitate identification of the original product, increasing marketing/promotions for brand acknowledgment/customer brand loyalty, and administrative and legal proceedings.

Licensing, Franchising and Partnerships

Apart from being a respectable manufacturer of cosmetics in its own right, SCC has entered into licensing, franchising and contract manufacturing agreements with reputable local and foreign corporations. SCC franchised with Walt Disney™ Company to produce and distribute the Walt Disney perfume in Viet Nam, featuring famous Disney characters such as Snow White, The Little Mermaid and Mickey Mouse™, popular with young consumers. The company also collaborated with French premium cosmetics company “Laura Beaumont” in launching a new natural fragrance brand called “Aroma Link”. Moreover, SCC supplies toiletries products under contract manufacturing to METRO Cash & Carry and Big-C supermarkets.

In 2007, SCC launched the first ever celebrity fragrance in Viet Nam (called mytime™) in collaboration with My Tam, a famous Vietnamese pop singer. SCC is the exclusive manufacturer and distributor for all mytime products, including a new body wash launched in 2009, in Viet Nam and foreign markets. Furthermore, SCC has a long-term strategic co-operative agreement with United States based Liz Claiborne Cosmetics assuring mutual support in sourcing materials, manufacturing technology and quality assurance. SCC affirms that without its demonstrated commitment to IP protection, it would have been “difficult to enter into licensing, franchising, and contract manufacturing agreements with these distinguished partners”.

Business Results

Saigon Cosmetics Corporation is the leading cosmetics, perfume and detergent manufacturer in Viet Nam employing more than 300 staff, including over 100 engineers and specialists. In Viet Nam, its products are distributed through both traditional and modern channels, plus its own retailing chain branded “SC Perfume”. SCC’s products are exported to over 20 countries including Angola, Cambodia, China, Japan, Myanmar, Russia, South Africa, the Philippines and the United States. Export revenue accounts for about 40% of total revenue.

Since 2004, SSC has been operating in a new 17,000 m² high-tech factory in the Cat Lai II Industrial Zone, Ho Chi Minh City (HCMC). All SCC products are manufactured under strict quality assurance processes in compliance with the ISO 9001:2000 standard to guarantee highest product quality and safety levels.

SCC has won many honorable awards and prizes for its achievements including “Best Vietnamese Brand in the cosmetics industry” voted by readers of Vietnamnet Newspaper, “The Favorite Vietnamese Brand” by Saigon Businessmen Magazine and the “Golden Cup of Community Development”. In 2007, SCC won the WIPO Innovative Enterprise Trophy for its active use of the IP system in its research and development (R&D), production and commercial activities. In 2009, SCC’s products won the consumer-opinion based “Vietnamese High Quality Goods Awards” (organized by Saigon Marketing Magazine) for the 13th time in a row.

Achieving Market Leadership with a Coherent IP Strategy

Early awareness of the importance of the effective use of the IP system played a key role in SCC’s success: “Without investing in the protection of our IP assets, it would have been significantly easier for free riders to take advantage our ingenuity, creativity and reputation making it more difficult if not impossible, for the company to establish itself as a leader in cosmetics manufacturing in Viet Nam”, say SCC’s managers.

Source: WIPO case study