Team:Shanghai SFLS SPBS/Entrepreneurship
1. Project Overview
The company uses engineered microorganisms to synthesize natural pigments, pigment precursors, oxidases and other substances. We utilize these products to make natural hair dye products and improve the production efficiency of natural hair dyes, effectively replacing current commonly used but highly harmful synthetic hair dyes.
2. Drawbacks of Current Hair dyes
For most hair dyes currently on the market, p-phenylenediamine and hydrogen peroxide are indispensable ingredients. Although p-phenylenediamine plays a role in fixing the color after dyeing hair, it is also a strong allergen and a recognized carcinogen. It can cause skin allergies in people with sensitive physical conditions and cause contact dermatitis; it can also affect hematopoietic stem cells and, eventually lead to leukemia. In addition to p-phenylenediamine, heavy metals in hair dyes (such as lead, mercury, and arsenic) may also damage the function of organs such as the liver and kidneys. Studies have shown that people who dye their hair for a long time have a 70% increase in the chance of developing lymphoma, while the chance of leukemia is 3.8 times that of ordinary people. This has caused many people who pursue beauty to have a lot of trouble about the safety of hair dyeing, and it has also made the public's demand for natural hair dyes to grow significantly.
3. Industry Analysis
With the aging population increasing, the global hair dyeing market has great potential for development. The aging population has greatly increased the demand for hair dyes in the global market. In Europe, nearly 70% of women and 10% of men have used some kind of hair dye to dye their hair; in the United States, more than 75% of women have used hair dye. It can be seen that the growing trend of hair coloring has effectively promoted the sales of hair coloring products. In 2016 alone, nearly 1.43 billion sets of hair dye products were sold in the United States. In 2012, the global hair dye market was only 6.4 billion U.S. dollars. In 2019, the global hair dye market has exceeded 29 billion U.S. dollars and is expected to grow to 40 billion U.S. dollars by 2023. The global market CAGR exceeds 8%.
The Chinese hair dye market is also growing with the increasing number of the senior population. In 2017, China's hair dye market scale was 5 billion yuan, and its market size was 13.5 billion yuan in 2019. It is predicted that the scale of China's hair dye market will exceed 15 billion yuan this year, reaching 18.2 billion yuan.
Chemical hair dyes bring great hidden dangers to human health, and the importance of plant hair dyes is becoming increasingly prominent. According to research by the National Cancer Institute, women who use permanent hair dyes and chemical hair straighteners have a higher risk of getting breast cancer compared with other women. Most hair dyes in the market also contain a toxic chemical called p-phenylenediamine. P-phenylenediamine is a coloring agent that must be used in hair dyes. It has become a major cause of leukemia and is an internationally recognized carcinogen. Since the hair dye touches the skin and is heated during the hair dyeing process, benzene organic substances enter the capillaries through the scalp, and then reach the bone marrow with the blood circulation, which will cause the malignant transformation of hematopoietic stem cells and leukemia. Therefore, the chance of getting leukemia in people who have been exposed to hair dyes for a long time will greatly increase.
The frequency with which people dye their hair increases with age. The best effect can be maintained for about 2 months after dyeing. After about two months, the hair is oxidized by air, water, sunlight, etc., and the pigment particles are constantly lost, and the color will fade. Generally, dyeing hair can last for 6-8 weeks to keep the color basically unchanged, or after 16-20 uses of shampoo. After dyeing your hair, you need to re-dye it in time. When the new hair grows 2-3 cm, you should go to a professional hair salon to re-dye it.
| Age | Frequency |
| Under 20 years old | 5 |
| 20-35 years old | 4 |
| 36-45 years old | 6 |
| 46-60 years old | 8 |
| Older than 60 years old | 10 |
Plant Hair Dye Market
| China Taobao Tmall platform 2020 August sales TOP10 hair dye | |||||
| Product name | Country | Price(Yuan) | Monthly sales (ten thousand) | Colors available(kind) | Selling point |
| Amore Foam Hair Dye | Korea | 75 | 12+ | 22 | Pure plant, dyed hair bubble |
| Schwarzkopf Yiran Hair Dye | Germany | 111 | 10+ | 14 | Ammonia-free formula, white hair cover, plant |
| Han Jinliang Yumei Hair Dye | China | 89 | 9.5+ | 11 | One comb, plant |
| Daiyue Shoubang hair dye | China | 78 | 8.2+ | 17 | One comb, plant |
| Tehuimei, black 4 in 1 shampoo | China | 88 | 7+ | 1 | All-in-one wash, dye and care, black hair |
| Runsidan shoubang yishucai | China | 88 | 6.6+ | 20 | One comb, plant |
| Schwarzkopf Fasley Bubble Hair Color | Germany | 82 | 6.4+ | 14 | Plants, color hair bubbles |
| Xuanruo Bubble Hair Cream | Japan | 78.2 | 5.1+ | 18 | One comb to dye, cover white hair, plants |
| Runstein, black 3 in 1 shampoo | China | 108 | 4.5+ | 1 | All-in-one wash, dye and care, black hair |
| Suimei black hair dye | China | 128 | 4+ | 1 | All-in-one wash, dye and care, black hair |
Development of plant hair dyeing: In 1883, Mon2net in Paris, France, pioneered para-phenylenediamine oxidative hair dye and obtained a patent. Eugène Schueller, the founder of L'Oréal, is believed to have created the first synthetic hair dye in 1907. In 1947, the German cosmetics company Schwarzkopf launched the first home-use hair coloring product "Poly Color".Hair dyeing is now a multibillion-dollar industry that involves the use of both plant-derived and synthetic dyes.
4. Product advantages
The company's products are composed of plant pigments, making them a 100% natural alternative. It is harmless to the body, non-toxic, non-irritating, non-allergic; it can not only have a good repairing effect on damaged hair, but also make the hair more natural and fresh after dyeing. Our plant dyes are only composed of ingredients found in nature and do not contain irritants that can cause allergic reactions. Therefore, people who have skin contact allergies (dermatitis) caused by ingredients such as ammonia or p-phenylenediamine can also use our dyes.
The company's production technology is leading. The company's products use engineered bacteria to produce different plant pigments more efficiently, increasing the popularity of natural pigments in the market.
The company's products have little environmental pollution.The company's natural hair dye is 100% biodegradable, which greatly reduces the impact on the environment during the hair dye production process.
| Strength |
•No harm to the human body, non-toxic, non-irritating, non-allergic •Relatively fast production efficiency •Various kinds of natural colors. More options for custmors •No pollution and harm to the environment |
| Weakness |
•Higher cost •Coloring durability is mediocre •Many clinical restrictions |
| Opportunities |
•Few competitors of similar products •Having a global market •The product is for all ages |
| Threat |
•Concerns about microbial production technology •Preference for traditional synthetic hair dye |
5. Competitive product analysis
| Competitive product | Competitive product strength | Competitive product weakness |
| Chemical synthetic hair dye | Strong coloring, diverse colors, easy-to-obtain raw materials, and cheap | Highly irritating and toxic, which can easily lead to itchy scalp, dry hair, scalp rash, scalp suppuration, etc. The worst result of long-term use will be carcinogenic. |
| natural/plant hair dye | Almost no irritation on skin, low toxicity, natural color | Simple color, poor coloring effect, complicated extraction process of the raw material pigment, cannot be mass-produced, and expensive |
6. Business model
1) Main Business Partners:
Chinese herbal medicine companies and mid-to-high-end hair dye companies will be our main partners. In the product test phase after R&D, we plan to find hair dye testing place near our members to test the feasibility of our products in reality. After that, we will look for factories for microbial production and hair dye manufacturing companies to cooperate and develop large-scale production lines. In terms of sales, we may look for advertising companies to help us promote our products on the online platform. At the same time, we also need to cooperate with companies responsible for labeling and packaging to avoid spending too much energy on aspects other than developing technology and products.
2) Key executing strategies:
Promotion: What we are already doing is to introduce our products and the principles behind them to our customers through mass media, such as wikis, official accounts, and online questionnaires. In addition to these online promotions, we have also participated in public activities offline, such as the 2020 TEDx speech. In the future, we plan to carry out public activities in various locations, continue to promote our products, and design our peripheral products.
After the product is prototyped, we will invite interested partners to test and use it for free, and in this way build trust between the two parties.
Technology and Funds: Then we plan to contact more experts and factories to obtain technical support. At the same time, we will seek financial support from companies, organizations or investors to develop a complete mass production
Production line: After we are able to carry out large-scale production, we will further sign contracts with related companies to introduce our products into the hair dye market while protecting the mutual interests.
3) Important resources:
Human resource:
•Professionals in related fields: Experts in synthetic biology, plants, and Chinese herbal medicine (They have a substantial effect on the improvement of the production efficiency and safety of the pigment in the later stage of the product)
•People involved in company operations. People in charge of marketing planning, sales and administrative are also essential.
Technology, Site
•Continue to keep in touch with the Bluepha Lab during the biotechnology R&D stage to obtain technical and site support.
Equipment
•Laboratory research and development/industrial production, based on different stages.
Financing
•Investor's investment and bank loans are also a major key to the continued development of the product.
4) Customer groups:
Hair salon : Hair salon has a large number of customers who need to dye their hair every day, and through our survey, they also hope to have a safer hair dye.
High school and college students: Dying hair is very popular in this crowd, especially colored hair. But considering their health, they are in great demand of healthy biological hair dyes.
Hair dye manufacturing company: They will need our biological hair dye technology
5. Promotion:
Business to Consumer aspect (By formulating a clear plan and carefully considering the interests of customers, our company can leave a positive impression on them, reflecting our sincerity as a partner)
•Continue to post videos and tweets online to introduce our products to customers. At the same time, we will also leave contact information for further communication and explanation with customers.
Business to Business aspect
•Conduct multiple interviews with company managers who have shown their willingness to cooperate, in order to obtain more professional advice and gradually establish a reliable partnership. Due to the impact of the COVID-19 epidemic this year, we have chosen to use online interviews and video presentations as our main form of activity, but if necessary, we will visit the company under safe conditions to ensure the most direct and effective information communication.
•Promotion channels
•Contact the company via email and WeChat
•Communicate face to face with them through summits or exhibitions
7. Operation status
•This product is currently in the development stage and has successfully produced 4 pigments and laccase. The development cycle is estimated to be 6 months. After two months of development, a product prototype has been produced.
•The first technical iteration takes 2 months. The goal is to increase production tenfold and produce different coloring times.
8. Development plan
1) Business Development Planning:
Short-term plan:
•Research and development: Complete the existing product development
•Experiment: Find customer groups for free trial of our product and get feedback to improve
•Certification: After the product is completed, we will obtain the CDFA's approval for domestic special-purpose cosmetics and the administrative license for new cosmetic raw materials
Mid-term plan:
Initial promotion: Product trial run, check product effect
Mid-term advertising( Business to consumer) :
•Lectures in primary and secondary schools
•Public account promotion
•Participate in the forum
•Display product
Mid-term company cooperation (Business to Business):
•Barbershop
•Hair care company
•Long term planning
•Release 2.0 version of iterative product
•Cooperate with more big company and small company
2) Human resources plan :
| Unit: (persons) | 2020 | 2021 | 2022 |
| Number of production staff | 10 | 15 | 24 |
| Development | 5 | 7 | 10 |
| Sales | 3 | 6 | 12 |
| Administration | 2 | 2 | 2 |
| Number of management staff | 3 | 3 | 3 |
| Development | 1 | 1 | 1 |
| Sales | 1 | 1 | 1 |
| Administration | 1 | 1 | 1 |
9. Financing plan
| Unit (10 thousands yuan) | 2020 | 2021 | 2022 |
| R&D expenses | 20 | 26 | 33.8 |
| Product R&D expenses | 20 | 26 | 33.8 |
| yoy(%) | 30% | 30% | |
| Sales expense | 10 | 15 | 21 |
| Access/Partner Development | 5 | 7.5 | 10.5 |
| yoy(%) | 50% | 40% | |
| Customer expanding | 5 | 7.5 | 10.5 |
| yoy(%) | 50% | 40% | |
| Staff costs | 54 | 64.8 | 72 |
| Production costs | 18 | 28.8 | 36 |
| Staff members | 5 | 8 | 10 |
| Staff salaries | 3.6 | 3.6 | 3.6 |
| Management costs | 36 | 36 | 36 |
| Managers members | 3 | 3 | 3 |
| Manager salaries | 12 | 12 | 12 |
| Estimated cost | 84 | 105.8 | 126.8 |
Financing amount: 2 million yuan
Financing purpose: research and development, promotion
Transfer equity: 20%
Pre-investment valuation: 8 million
Post-investment valuation: 10 million