COSMETICS BUSINESS LIVE
HOT POT CHINA
How beauty brands can win over Chinese
consumers Speakers Jonathan Travers-Smith & Yihu He
C
hina is vast as a cosmetics industry. The total market value in 2021 was US$49bn, which makes it the second
biggest cosmetics market in the world, but also the fastest growing of any market globally. You have 1.4 billion consumers and there are tiers of consumers that are looking for the best of international brands.
So what are they looking for? They’re looking for authenticity of brand and provenance; innovation, brands that really bring something new to the table; and exclusivity – today’s Chinese consumer is looking for a brand that they have discovered which may be different to what their peers are using. A function of China is its huge e-commerce landscape. Every year, there is Singles’ Day in November, but also 618, which happens in June, which is a big e-commerce festival run by one of the leading platforms
jd.com. Interestingly, 65% of the gross market value from 618 is via pre-sales. It shows the hunger and the appetite for global brands, if you can get your marketing and messaging right.
Here are five key areas to consider.
PRODUCT-MARKET FIT A lot of brands go in with the assumption that their hero product from the UK or US will do as well in China. But there is a whole set of considerations around texture, functionality and fragrance that may be vastly different.
China is often a ‘hero product’ market. So you may have a huge product range, but often it is only one hero product that gets known and which usually gets given a nickname.
BRAND AMBASSADORS The role of brand ambassadors in China is crucial. Beauty brands are tapping into the vogue for what literally
cosmeticsbusiness.com
DIGITAL EXCELLENCE WeChat as a platform should be highlighted. WeChat is primarily a messaging app and later developed other functions. As a consumer, you receive your messaging there, you engage with brand ambassadors there, you can receive a gift from brands and you can also see products and checkout directly via WeChat. There really is nothing like this in the Western world, so brands need to be planning for these apps directly when thinking about design, packaging and how to launch a product.
If you get it right, WeChat is a very powerful CRM tool. You’re able to get real-time feedback from consumers and, at the same time, use that data for new
Chinese consumers are seeking brand authenticity and provenance, said Yihu He and Jonathan Travers-Smith
translates as ‘little fresh meat’, a term used to describe youthful-looking men who are being scooped up as brand ambassadors to target a female audience.
If you get it right with your brand ambassador, then you have an immediate route to mass awareness. But any celebrity can fall from grace and, if there is a public scandal, immediately your brand equity, because it’s tied to that individual, declines overnight. So, by all means have your key brand ambassador, but they need to be supported by a pyramid of influencers with ‘key opinion leaders’ (KOLs) at the top, who have mass reach. But you are also working from the bottom up with grassroots influencers, who we call ‘key opinion consumers’.
product development more targeted towards the needs of Chinese consumers.
CONSUMER POWER Word of mouth is potentially very powerful in China if you get it right. Even before digital platforms, recommendations from friends and peers carried a huge amount of weight. What a lot of brands get wrong is they assume you need a lot of marketing spend behind creating beautiful content on platforms. But consumers are not interested in hearing what the brand is saying, they want to know what other consumers are saying. You need to get product into the hands of KOLs and grassroots influencers.
ROUTES TO PURCHASE Lastly, you need to look at the role of offline. Smart brands tie together the online approach and the offline approach. There is a real desire for consumers to see, to touch and to experience products.
Ideas like sample dispensing machines show that you don’t need to open up in 3,000 locations worldwide. Cross-border is also a very prestigious route. A lot of brands are fulfilling orders to China from overseas and will do that as a first route into the market. For a consumer, that can be relatively negative – they have to wait five or ten days to get their hands on the product. But that is far outweighed by the prestige of shopping from overseas for the Chinese consumer
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