1 Chapter 1 Introduction I.1 Background Indonesia’s cosmetics industry performed strongly with the country's growing middle class and affluent consumers. With a population of over 270 million, Indonesia is the largest nation in South East Asia and the fourth most populated country in the world. The demand of beauty and cosmetic products are increasing among consumer in Indonesia. The factors affecting the beauty sector are not all negative. The end of the pandemic in most markets has been a positive for many shoppers. People want to celebrate. Beauty, a key element in the joy of going out again, has benefited. The global market for Cosmetic and Skin Care estimated at US$145.3 Billion in the year 2020, is projected to reach a revised size of US$185.5 Billion by 2027, growing at a CAGR of 3.6% over the analysis period 2020-2027. Indonesian cosmetics exports are targeted to reach 1.67 billion USD and are expected to increase to 1.81 billion USD in 2021. Market consumption volume increased with a CAGR of 6% between 2015 and 2019, to reach a total of 63.6 million units in 2020 (Kantar, 2020). Indonesia will become the fastest growing cosmetics market in Asia. Indonesia will make it to the top 10 markets for global beauty and skin care products, worth over 130 billion USD globally. Revenue in Indonesia Cosmetics segment is projected to reach US$1,583.2m in 2020. The market is expected to grow annually by 7.4% (CAGR 2020-2025), (Kantar, 2020) Indonesia’s FMCG (Fast Moving Consumers Goods) sector performed strongly throughout 2022 inline with country’s economy bounce back. The FMCG sectors growth because of inflation growth showed by price increase, while beauty market as part of FMCG enjoyed accelerate growth up to 20,6% in 2022 not only from its price increase buat the unit sold. 2 Based on this case Indonesia beauty industry has become sexy and makes everyone comes to invest and compete in this beauty industry, the industry competition become red ocean and fierce with a lot of player. Moreover barrier to entry Indonesia beauty industry is low, shows by many new brand entry beauty market. Supported by Indonesia Ministry of Industry, national cosmetics industry grow rapidly around 20% since 2017 and recorded there are 153 new comer brands with total 760 local cosmetics brand (Directorat General of National Export Development Ministry Of Trade Republic Indonesia, 2017) . OMG Oh My Glam is a new beauty brand born to serve the lower socio- economic segment, offering high-quality products. OMG believe that beauty plays important role in women’s life. Not only beauty makes them more beautiful physically, but also feel good, increase their self-esteem, boost their confidence and leads them to achieve their dream. The purpose of OMG is to ensure all women in any background can still take care of their beauty by riding on the latest beauty trends without sacrificing their budget. While having a beauty that never fade will make them feel always well-prepared to face anything life throw at them, especially when their days are filled with working hard from morning to night (author, 2023). The low segment beauty market is highly competitive, with numerous local and Chinese newcomers vying for consumer attention. As new comer, it crucial for Brand to create differentiation strategies in communicating products, establish a unique value proposition, and define brand identity. As the market growth significantly, the competition get tighter. Based on data from the Food and Drug Administration Indonesia or BPOM, in 2023 there are 1,772 Notification Owner Business Entities, constituting approximately 47% of the total holders of cosmetic distribution permits. Examining the cosmetic notification data, registered cosmetics account for 55.99% of the total registered Drug and Food products from BPOM, totaling 265,723 cosmetic product items. This demonstrates that cosmetics have evolved into a fundamental requirement for diverse segments of Indonesian society (BPOM, 2023). This condition shows that the competition on cosmetics industry getting fierce with various brand and millions product. It lead the brand or cosmetics firm business sustainability become shorter and cosmetics become one of fast moving consumer’s goods with short product lifecycle. There are significant growth from new beauty brand registered each year, from The Association of Indonesian Cosmetics 3 Companies and Associations (PPA Kosmetika Indonesia) reported a growth rate of 21.9 percent in the Indonesian cosmetics industry, with the number of companies increasing from 913 in 2022 to 1,010 by mid-2023. Despite of this competition, >50% market share dominating by top 3 company in skincare which are Paragoncorp, Loreal and Unilever, while >60% make up market share dominating by 5 big company which are Paragoncorp, Ekajaya, Priskila, Loreal, Mandom. Despite the fierce competition from the market, there are some undetermined condition such as pandemic Covid19 era as one of crisis condition when the possible future undetermined and has a lot of possibility that suppres market condition and buying power. In 2020, the total economic and market suppress up to 30% and cosmetics buyer reduce spending and basket size lead to massive down gradation to all beauty personal care category (Kantar, 2021). The development of foresight scenarios is meaningful for building medium to long-term projections with the purpose exploring alternative futures, with or without predictive aims. Scenario techniques appear to be valuable to deal with issues of complexity and uncertainty (McGrail & Gaziulusoy, 2014). As the new emerging cosmetics brand from Paragoncorp, OMG need to create long term strategy to maintain business growth and secure business sustainability. Sustainable business strategy can reflect from its product lifecycle and innovation strategy within brand. New product launch prolong product lifecycle and has important role to extend brand lifecycle for sustainable business. One of brand manager role is managing brand, design the brand's reputation, creating strategic plans, and driving future business movements. However in navigating a brand, the twists and turns of the business world inevitably presents challenges and obstacles. As brand manager, they encountered various business problems and had to promptly and effectively identify and resolve the business obstacles. One of the main challenges in developing the new brand was establishing strong brand equity and brand awareness to strengthen share of voice in the minds of consumers and manage brand sustainability growth and long existence. I.2 Company Profile I.2.1 Paragon Corp PT Paragon Technology and Innovation is headquartered in Tangerang, Indonesia.