jeudi 29 août 2019

China Cosmetic Market & How to Develop a Distribution Channel?

Let's  speak about the cosmetic Market  in China.

How it works? what is the industry like? Who are the consumers? And a focus on how to market a cosmetic brand in China Let’s start by introducing the market landscape. Is this industry growing?despite the trade war,  Yes, 12 to15% per year.

It really is an amazing market for foreign brand, because asian girls usually spend a lot of time and money on cosmetics. Chinese people are becoming richer and when a chinese girl is becoming richer she spends more and more money on herself and buy more and more cosmetic product.

Overview of the Chinese Cosmetic Market


As a reference, korean and japanese use between 15 to 21 different cosmetic products for their beauty routine. China is taking the same direction as its neighbors And because of the huge population it is to become an amazing market. Consumers are richer and women are sensitive about skin care and beauty.

West vs China


There is a difference between the beauty standard of the west and of China. Let me explain roughly how it is: in the west most of the cosmetic industry is about make up. In China it is different, most of the market is about skin care, personal care, Women spend a lot of time on skincare every day and care less about makeup. The beauty standard is natural beauty. Cosmetic is also a very innovative industry. Lots of different products with various applications that are created and launched every year.

 

China Cosmetic Market: An innovative Field


Most of the consumers like innovation, but what does it mean for you? Concretely once consumers have found what works for them, they will stick to it. For instance: I want to buy a lotion, once I’ve found the perfect one, I’ll buy it again and again. In China, It takes a lot of time and effort to get customers, However once you have them and they are happy about your product they will keep buying. You will lose money to get them and only later will start to make money. It is a very competitive industry,




you can go to any shopping mall to see it by yourself All the brands are here, very aggressives, selling everything, every country are here. I think China is a land of opportunities for international brand. Why? 80% of the total of the market is dominated by international brands. The 20% left are cheaper chinese brand that nobody can compete with..

Chinese girls don't like to buy chinese brand when it comes to skin care. If they have the choice they will buy an overseas brand because they trust overseas brand more than domestic brand. Of course it makes sense, right? Everybody prefers to buy a french brand, an italian brand a japanese brand… rather than a chinese brand when it comes to cosmetics. China doesn't have any positive feelings about chinese cosmetic brands either. So it is an opportunity for almost all the brand in the world

How to market Cosmetic product in China


How to market a cosmetic brand in china? Marketing it is about distribution, selling and branding. Basically they are link together. What everybody wants is to sell their products; that is the foundation, the base of every business


 Find a Distributors in China

In China the distribution is complex and I say complex and not complicated. There basically is a lot of intermediary. Agents using distributors to find resellers to sell their products, their and their and their… Making it very difficult to have control over the distribution process of your products. If you want to have the control you need to have your own stores.

More info here:  www.marketingtochina.com/connect-85-000-chinese-distributors/

For that, you'll need money to invest first and later earn enough money to open a lot of stores in China. Which takes too much resources: both time and money consuming Most of the brand chose to work with distributors and the question that you guys need to ask is “How can I convince a distributor to sell my products?” It is not easy but you can find distributors online, you can prospect them, meet them in tradefaire, network.. There are more than 10 000 distributors in China. They can sell wine and can sell cosmetics, they can be specialized in cosmetics, they can have a store, have an online store,

NotaBene: 


  • They can have a big distribution channel, they can have the supermarket, they can have contact in the supermarket. It is basically almost everything, it can be a hotel, a karaoke..etc there is many different types of distributors You always need to ask yourself “how can I enter the right channel and convince distributor to chose me and not another one” and once he chose you: “how to engage more to bring this guy's sells and make money?” Lets focus on the first one let's imagine I ‘m a chinese distributors and have access to thousands of brands,

  •  I have a channel and want to make money. it would make the most sense for me to choose the one that will allow me to make money quickly and effortlessly. A chinese distributor does not want to invest in branding, they don't want to invest in their suppliers (you) Yes I know what you are going to tell me, You have a friend or know people that found distributors finger in the nose. 

It was possible 5/10 years ago but times have changed. Distributors want:
  1.  The brand to invest in branding, marketing and only have to take care about the distribution which they are good at. 
  2. They want something easy to sell, fast money. Something they can introduce to their channel and find buyer fast. It is that simple. When chinese distributors are with discussing with mid size brand, negotiation looks fine at first.

Basic steps of negotiatin with a chinese distributor


In a second step  after accepting to meet you chinese distributors will check on baidu, if there are no results they will think twice before signing this brand.
They want to find :
  1. positive reviews, stories, page about the brand
  2.  taobao &Little Red Book.. to check if there is already reseller. If yes, that is positive, this means someone is already buying from them. 
  3. Next step is the social media check: are the accounts alive? are people engaging? 


The third Step: After the basic check they will evaluate the potential of the brand. If they think the brand has potential, great, otherwise they won't take risks. For us the first step is to work on the reputation of our client. This way, when they meet distributors they appears to have potential, it gives them a better chance to sign a deal.

Build a distribution network in China

 

Brand then need to work on their distribution network, find more and more distributors.
  1. You can choose for instance to have one big distributor that has a big distribution network himself and will basically do the networking job for you
  2. The second option is to control the distribution channel by setting up a distribution network (find a lot of distributors), 

As I mentioned earlier, there are many distributors and you can find them everywhere then chose to manage directly with those guys on a daily basis. This way you’ll be more active in the distribution process

Sell online

You also have the possibility to sell your products online, on your own store. It takes more time and effort but it is possible. Same goes for a physical store. Everything is possible. Most of our clients are looking for a cost effective solution and that is why they are going for the resellers option. Once you’ve developed a strong network of distributors, you’ll be able to start working on brand awareness.

 Brand awareness is a big part of your budget. The biggest the market is, the more money you need to put in you brand awareness effort. We are talking millions. But if you invest millions and do not possess any store, you are wasting money. However, if you already have many stores, to make it simple you’ll be credible to the target which is a strong converting point as they’ll be able to find you everywhere.

How to build your brand awareness in an efficient way? 

Kol 

KOL is the number one source of brand awareness. Kol = Key opinion leaders / influencers. Kols are mainly girls who have been developing a network of followers and you pay them to review your products. The more you work with them the more trust you’ll have from your target audience. Chinese consumers almost have a blind trust toward KOLs.  Not only you buy there network but their credibility. Influencers in China are a KEY point of your branding effort. Social media is another non negligeable option.

Social Media  

 

China number one social media is weibo. Weibo is still a popular platform for the cosmetic industry. Chinese girls check cosmetic related content everyday on weibo, they follow brands account.

You have the choice betweensponsored post, create game.. And for a cheap price you'll get a big audience. Really good for massive exposure, similar to facebook. In the west,

Alibaba ecosystem

 Weibo is also a member of the alibaba eco system, making it easy to sell on taobao, tmall , Little Red Book etc You simply have to put your store link to your weibo account and easily drive traffic from weibo to your store. Weibo is open, it is pretty simple to find an account or information about anyone. Peoples tends to follow official account easily.
 
On weibo you can be commercial, it won’t go against weibo rules. You can give discount, people actually follow brands to get these kind of discounts, get gifts and get commercial info. If you are an advertiser, weibo is the place for you to be T

 

RED aka Xiaohongshu (the app).  

What is little red book?

 It is a social ecommerce platform, based on community. If a netizen like a products he/she sees on the app, he can access the store directly in the same app. Really popular in the beauty industry. Why? 80%+ of the users are girls. Girls that like international thing, premium products.

Xiaohongshu the cosmetic market king

If you are in cosmetics are really recommend you to use the app. The other benefice of the app is that you can set up your own store. It is not that expensive, you can do crossborder and you’ll have to communicate with KOL (which we already said is a must do). The influencer on LRB use to be the best for promotion but are now closer to what you’ll find on instagram for instance.

They speak about their world, their things and then your products (which make them more real as well so it is positive). It is first about something interesting and then your products. If your products sounds good, her followers will click on your link. Focus is on the community then ecommerce.




Review app

The other positive point about LRB is that a lot of women are searching the app to find information about your product. Today girls do not trust comment on taobao or ecommerce platform, there is no real review. On little real book testimonial are real, people are commenting. They are here to look for information, feedback on the LRB. this is how LRB has been doing so well since its launch. You can use a lot of people on LRB to test the product and let reviews that will stay.

They will be part of your brand zone which is pretty awesome for brands. I believe it is the future, because it is cost efficient and makes me think of a chinese version of instagram. Instagram has become so popular because of its visual and I think LRB will have the same future even though the little red book is more about making money, ecommerce oriented. It is basically instagram with chinese characteristics. I can not recommend this app enough to any brands wanting to dvp in China.




 BAIDU SEO & UNDERCOVER SEO

 

I’ll then recommend baidu. I know you are not convinced but people are still looking for information on baidu as a third party option. 


Baidu is number 1 search engines in China

They will look for comments, reviews, articles, price release, sources. I don't recommend to do seo on your website but create useful content about your brand, how your brand solves problems and market this on baidu as a third party. This is what we call undercover marketing and seo optimization which is really efficient. For instance: girls may have problems, let's say dry skin issue. The first is going to be search on baidu for solutions “my skin is dry, is there a good lotion for that?” etc

More info here www.socialbusinesswriter.com/2019/03/19/how-chinese-internet-giant-baidu-uses-ai-and-machine-learning/



What are Chinese USers looking for on Baidu?


They wont click on the brand website, they are aware that no brand is fair/neutral about their products. But they will click on chat thread, on Q&A, on forum, on Press release and then they will take a decision. Baidu is really effective as long as you know how to do it. To sum up, it is not about baidu but your work on the baidu ecosystem to market in an undercover way your brand.


 

TAOBAO


The last thing I’ll talk about is taobao; today a lot of influencers are moving to taobao to live stream. We recently observed a very good activity from influencers on taobao. They use to create a lot of things but today they are calling it very simply such as taobao live streaming, taobao influeuncers. Influencers are highlighted by taobao. Taobao is powerful, everyone has taobao. It is magic, it is their world. Women are really active on taobao,

What do poeples use taoabo for?


Taobao is number one app for their search. They are used to go to taobao and just check the product, they can spend hours and our just looking at products. It is not just a platform more like a shopping experience, girls like shopping. Instead of walking the street to shop they open taobao discovers new products. They like taobao, and taobao founds out that they like it; there are 400 millions of active buyers on taobao. People go to taobao and check products store etc

 

Taobao Live Streaming


The platform has developed an ecosystem of influencers that users would be recommended. Taobao invest a lot in videos and recruits influenceur they find on weibo and other platform. This influencers are reviewing various products in various formats. Such as shopping TV show where you can see people talking about this or that. (When you have time, open taobao and have a look.) It is a good way for brands to get exposure.


 

Wechat Marketing to Sell Cosmetic



The last option would be wechat. Wechat is very good if you have a community. I recommend any brands to have a wechat account. Wechat is about growing your community, it is perfect for newsletter. People have different opinion about it. Some are very successful other less. This is always the same story, if you do things right, you can be really successful on any channel. However, if you spend the same amount of time and money than on the options we talked about earlier, results won’t be as good. Wechat is for long term.




ECOMMERCE

It is time to talk about ecommerce You have two options here Crossborder or china ecommerce If you don't have the licence to be in China you can still sell your product to China via crossborder.

 Every time there is an order you ship it to your customer or you have a warehouse in a chinese free trade zone from where you’ll be able to ship directly to your customers. It means every company in the world can sell in china. There are many ecommerce platform for Cross border, Tmall, Jd.com, Little Red Book, Kaola etc


I’ll split them into two groups
  1.  you manage your store like tmall, you manage everything, you invest, market etc
  2.  Kaola, Vip etc You just need to sell the product to the platform and they will sell, it is a distributors model. To integrate any of these platforms you need to have a strong brand ready to sell. 



CROSSBORDER ECOMMERCE


The first type of platform allows you more freedom to work on your branding, results.. You need to invest and can control the data, manage store and logistic.. I recommend you to opte for this type. The second one is more like a traditional distributors Note that, Tmall china is different from tmall global (or jd china etc). Tmall china means you are already in China and have all the documents required. Opening a Tmall china store, is easier, less expensive, has better management option than tmall global..

You’ll sell more on tmall china than tmall global because it is easier for the consumer, they want to be delivered fast which is not happening with crossborder. For tmall china you can get faster results and bigger results. Tmall crossborder, it is just a first step between we are not in China and we are moving to china. It will never be big.

The key to success for this platform is once again branding, let me explain why; 
  • if you have no brand, Tmall won't take you in. they are taking in big and famous brand. Tmall is a shopping mall, you go there, rent a place and have a store. I
  • f you have no attraction for you brand you won't sell, you CR will be low. If you CR is around 5% for instance this means if you get 100 visitors, you’ll get 5 sales and start to make money with a good ROI. How you improve CR? Branding. If you bring visitors to a loreal page 5% or more, maybe 10% will purchase. 

There cost of acquisition will be the same as another brand with a 0,1% cr which means they will need 1000 visitors to make 1 sale when loreal get 5 sales with 100 visitors. Everything is about conversation because the cost of traffic is almost the same for anyone. You need to buy traffic, KW etc on most of this platform you have PPC, banners and ads outside of tmall that brings traffic to your page.

The more you pay the more traffic you get. The more you sell the more you review, the more you sell. Snowball effect. That is why 20%-30% of the brand on tmall are making 80% of the global sales. I think I gave you a good overview of the different options you have for the cosmetic overviews if you are a brand.



jeudi 22 août 2019

Bill Gates would invest in AI today

Bill Gates

Microsoft founder Bill Gates says that the federal government should help regulate technology firms like Google and Facebook and that if he were 20-years-old today, he would start an artificial intelligence company whose goal would be to teach computers how to read.

dimanche 4 août 2019

Xiaohongshu Suspended from Apple Store and Android Store


The popular social media platform Little Red Book (Xiaohongshu) has reportedly been suspended from the apple Store and Android Store since yesterday, July 29th. A search of the app on the Android Store indicates that it is "temporarily unavailable", although it is still available on the Apple Store.


Xiaohongshu answer


A spokesman for Red said he was actively investigating the problem and that current Red users are not affected. The news spread like wildfire on Weibo, with more than 900,000 threads.
Many Internet users were not surprised and criticized the platform for being poorly managed and full of false reviews and paid ads. Some also complained that the quality of messages has decreased since its launch.
more information about xiaohongshu

Little Red Book, founded in 2013, is a social media and e-commerce platform that has become a popular app for sharing product reviews and buying cross-border properties. The platform has grown rapidly and in six years it had 200 million active users per month.

We are currently negotiating for additional funding of $ 500 million. To reinforce its quality control issues, Red has undergone a series of content control measures. Last January, she launched her "Brand Partner Platform," which insisted that KOLs clearly label their sponsored publications.
In May, he revamped his entire KOL ecosystem and eliminated more than 13,000 KOLs with fewer than 5,000 followers. However, in June, officials from the Chinese Ministry of Industry and Information Technology warned Red to solicit consumer information.


Under investor pressure, the platform seems caught between two attempts to expand and maintain the quality of the content. To date, many luxury brands are taking a wait-and-see approach to the platform despite its popularity.
"We are still watching the evolution of the platform and the adequacy of demographics to our target consumers," said an expert in charge of US luxury brands in the Chinese market. 

In addition, some brands have questioned the return on investment in terms of actual sales, because Red is largely a platform where consumers write and read reviews - not a literal sales site such as trading platforms. Tmall and JD.com.

Official Account on Little Red Book 


Nevertheless, many luxury brands, especially high-end beauty brands, have created official account profile pages on the site. However, for the moment, they are mainly intended for KOL sponsored messages. More particularly, the French fashion house Louis Vuitton adopted the platform very early, inviting the Chinese influencer Mr. Bags to review his bags for his first job. To date, however, most other luxury brands have not released anything yet. Maybe once Red has solved his current platform issues, things will change.

vendredi 2 août 2019

About Vivid City China

more information about Vivid City out-of-home digital media specialist (DOOH)

Today, 59% of Chinese live in urban areas, and that number will reach 70%, or one billion people, by 2030

https://vividcity.com/


Vivid City, an out-of-home digital media specialist (DOOH), was launched to help brands break into the Chinese market. The company said it created a disruptive model offering a direct way to reserve mega-screens LED for high-traffic heroes in iconic places of the country. With China expected to become the world's second largest out-of-home (OOH) market in 2022, valued at $ 9 billion, Vivid City's London-based and Shanghai-based team aims to unify this fragmented and complex market. connecting brands with millions of Chinese consumers.

According to Vivid, it's a winning scenario for customers, offering direct access, unique sites and top-notch pricing in one of the fastest growing global markets. The White Magnolia Plaza screen (main photo) is one of the many screens in Vivid City's wallet.

Located in the center of Shanghai on the Huangpu River, the screen stretches over 23,000 square meters - more than three times the size of a football field. Three years ago, Vivid City founder Alistair Ballantyne tried to book a DOOH campaign in China for one of its European customers. That's when he saw an opportunity that the company said.


  • "The number of companies involved in the media buying process has resulted in high prices and significant delays," said Ballantyne.
  • "It made me think that it was clearly possible to streamline the process. The mass fragmentation of media owners in China has given Vivid City the freedom to independently select the largest screens with the highest penetration and socio-demographic statistics.
  • "Vivid City has packed China's largest mega-screens to create a scalable business that offers our customers a faster and more affordable way to reach China's urban consumers."
  • Zoe Huang, director of business development for Vivid City, a Chinese national, said the company's global approach to the Chinese DOOH market gave its customers a "definite advantage":
  • "The most overwhelming word best describes the feeling that many brands outside of China have towards marketing and advertising out there," Huang said.
  • "We understand why: in China, the process of planning and purchasing DOOH media is particularly complex. That's why we think it's important for brands to have better access to the Chinese market.
  • "With our expertise, we can help clients and agencies maximize their impact in China and ensure that their creations respect Chinese law and are in tune with current Chinese cultural trends."



Vivid said he is optimistic about the prospects in China, as growth in urbanization drives China's consumption boom. Today, 59% of Chinese live in urban areas, and that number will reach 70%, or one billion people, by 2030, he said.