Saigon Cosmetics Corporation (SCC) has attracted VND22 billion (US$940,000) from two new shareholders to support growth as competition heats up in the domestic cosmetics market.

For the first time in the 10 years since it became a public company, the Saigon Cosmetics Corporation (SCC) has announced two strategic investors are buying over 1 million shares more than a month after launching private offerings. They are Ho Chi Minh City Securities Corporation (HSC) and Ngo Hung Dung.

Of these, HSC has registered to buy more than 842,000 shares limited transfer in a year, holding 8.87 per cent of SCC’s capital after the issuance. Meanwhile, Ngo Hung Dung has registered to buy more than 194,000 shares, holding 2.05 per cent of the capital.

With the price of VND21,000 per share, SCC has expected to earn VND22 billion. The money will be invested to buy machinery and equipment, upgrade the factory and develop a system of 10 new design shops in HCM City and Ha Noi.

This is the first time the corporation has invited a financial institution to join SCC as a major shareholder.

On December 29, 2017, the Saigon Trading Corporation (Satra) sold its 7.3 per cent of shares at SCC. The remaining major shareholders of SCC include the Board of Directors, the Control Board, the foreign organisation and the employees.

Recently, SCC has recovered its business. In 2017, it gained a year-on-year increase in revenue of 19 per cent to VND333 billion and growth in profit to VND149 billion from perfume with the famous brand of Miss Saigon.

Last year, SCC’s net profit was posted at VND38 billion, nearly doubling in 2016. This was the highest profit recorded since the company’s equitisation.

However, its business result is small compared with the demand of the domestic cosmetics market at $2.2 billion by 2020.

Now, foreign brands account for 90 per cent of the local cosmetics market, including L’Oreal, Ohui, Whoo, The Body Shop, The Faceshop and Shiseido.

In addition, SCC has faced competition with new foreign brands from Thailand and South Korea and other local companies, as well as unfair competition from counterfeit and low quality products in the market, reported theleader.vn online newspaper.

With the fierce competition in business, SCC has changed its business strategy to focus on building its own showroom system and researching natural products.

Before 2006, SCC focused on export cosmetic export products, accounting for 60 per cent of its total sales. Now, the domestic market, with the major retail channel being agents and supermarkets, has contributed more than 86 per cent to its total revenue.

Last year, the company developed more than 100 new products such as shampoo, hand wash and sprays as well as a new design for Miss Vietnam perfume. — VNS