E-commerce in China in 2024: Top Trends from Agencies
As we advance into 2024, China's e-commerce landscape continues to evolve at a rapid pace. Agencies and industry analysts have identified several key trends that are shaping the future of online shopping in the world's largest e-commerce market. These trends reflect changes in consumer behavior, technological advancements, and regulatory environments. Revenue in the eCommerce Market is projected to reach US$1,469.00bn in 2024
1. Livestreaming E-commerce Dominance
Livestreaming has revolutionized e-commerce in China, blending entertainment with instant purchasing options. In 2024, this trend continues to dominate, with influencers and brands using platforms like Taobao Live, Douyin (TikTok's Chinese counterpart), and Kuaishou to engage directly with consumers. Livestreaming is not just a sales channel; it has become a crucial tool for brand building and product launches.
2. Integration of AI and AR Technologies Artificial Intelligence (AI) and Augmented Reality (AR) are being increasingly integrated into the e-commerce experience to enhance customer engagement and satisfaction. AI is used for personalized recommendations, customer service, and inventory management, while AR allows consumers to visualize products in their own environment before purchasing. This technology is particularly prevalent in the fashion and home decor sectors.
3. Consumerism is changing Sustainability is becoming a significant factor in consumer purchasing decisions. Chinese consumers are increasingly drawn to brands that demonstrate environmental responsibility. In response, e-commerce platforms and sellers are adopting eco-friendly practices such as sustainable packaging, carbon-neutral shipping options, and promoting eco-friendly products.
4. Cross-Border E-commerce Expansion With the relaxation of certain international trade barriers and improvements in logistics, cross-border e-commerce is experiencing significant growth. Chinese consumers are increasingly purchasing international brands and products online, driven by a desire for quality and authenticity. Platforms like Alibaba’s Tmall Global douyin and JD Worldwide are expanding their international offerings to meet this demand.read more https://marketingtochina.com/guide-ecommerce-china/
5. Social Commerce Surge Social commerce, which involves purchasing products directly through social media platforms, continues to surge. Platforms like WeChat, Douyin, and Xiaohongshu (Little Red Book) are making it easier for users to buy products without leaving the app, leveraging social recommendations and community engagements to drive sales.
6. Localized and Hyper-Personalized Marketing E-commerce giants are focusing on hyper-localized and personalized marketing strategies. Using data analytics, companies can tailor their marketing campaigns to individual preferences and regional characteristics, increasing conversion rates. Personalization extends beyond marketing into customizing product offerings and shopping experiences.
7. Regulatory Adjustments The Chinese government is tightening regulations around e-commerce to protect consumers and ensure fair competition. New regulations focus on data security, consumer privacy, and anti-competitive practices. Companies operating in China are adapting by enhancing their compliance structures and transparency.
8. Rise of Niche Platforms While major platforms like Alibaba and JD.com continue to dominate, niche e-commerce platforms are gaining traction by catering to specific interests and demographics, such as luxury goods, second-hand markets, and specialty foods. These platforms often provide a curated experience that appeals to particular consumer segments.
What are the challenges of selling beauty products in China?
Selling cosmetics online in China can be challenging for several reasons. First, there is a lack of regulation around the sale of cosmetics in China, which means there is no standard way of doing business. It is therefore difficult for brands to determine the best way to sell their products online in China. Additionally, Chinese consumers are often reluctant to pay high prices for cosmetics, preferring to purchase products at lower cost from unofficial sources. As a result, many brands found it difficult to sell their products online in China and had to turn to other methods such as physical stores or social media platforms.
L'Oreal the number one beauty company experienced strong growth in the third quarter (+19.7% to 9.5 billion euros). Over nine months, the group continues to grow faster than the market. Excellent summer for L'Oréal. The number one cosmetics company stands out with third-quarter sales up 19.7% to 9.58 billion euros. Much better than the consensus of 9.2 billion euros. The result jumped by +20% compared to 2019, the pre-pandemic reference year.
Despite inflation, its revenues are robust in all its activities: Luxury, consumer products and even in “Active Cosmetics”, this category of dermo-cosmetics, which is still small in the group but which has experienced the most rapid growth.
How can you overcome these challenges?
To overcome the challenges of selling cosmetics in China, there are a few things to keep in mind. First, make sure your products are of high quality and that you offer unique and innovative products. Second, be sure to research the Chinese market carefully before launching your product, as there are many different preferences among consumers. Finally, use technology tools to help you reach potential customers and drive sales.
One of the ways to sell cosmetics using technology is through social media platforms such as Facebook and Instagram. Creating an account on these sites can help you build a following for your brand and connect with potential customers. Once you've established a relationship with your audience, using technology tools like analytics can help you track the performance of your marketing campaigns and make any necessary adjustments.
Another way to sell cosmetics in China is through online marketplaces such as Taobao and Tmall. These platforms offer a wide range of products from different brands, so it is important to do your research beforehand to find the right products to sell. Once you've added your products to the marketplace, it's important to actively promote them to attract interested buyers.
Finally, it is always beneficial to have a representative stationed in China in order to better understand the needs of local consumers and adapt your marketing strategies accordingly. By taking these steps, you can ensure that you continue to successfully sell your cosmetics in China!
Tools and Strategies to Use When Selling beauty products Online in China
When selling cosmetics online in China, it is important to understand the culture and preferences of the Chinese consumer. For example, some Chinese consumers prefer natural ingredients in their cosmetics, while others may prefer more colorful formulations. It is also important to be aware of the new Chinese regulatory environment surrounding cosmetics. In May 2018, China released new regulations that require all imported cosmetic products to undergo pre-market safety checks. This means that cosmetic companies selling products in China will have to comply with Chinese safety standards before they can sell their products.
China slowdown concerns dim Ray-ban maker EssilorLuxottica's
EssilorLuxottica shares fell Friday due to a decline in China business that overshadowed the overall better-than-expected sales for the French-Italian-owned eyewear company.
The company, which produces sunglasses and spectacle frames in Versace and Prada, reported that its sales were "deteriorating" in mainland China due to coronavirus cases. It stated that about three quarters of its locations had been affected by COVID-related closures and subdued footfall.
China is on the rise with sunglasses that block blue light radiation
RayBan, the most popular prescription and sunwear brand, and the Peking University Eye Center have joined forces to promote Anti-UV Eye Protection in China. AMD (age-related Macular Degeneration) is on the rise in China and other countries. It is one of the most serious eye-related diseases in the world.
"It's a well-known truth that prolonged exposure to sunlight without UV-resistant sunglasses can cause permanent eye damage," stated Yvette Ye (China Country Manager for Luxottica Group), the parent company of Ray-Ban.
This research aims to improve UV protection in sunglasses through improved lens technology and educate consumers about the importance UV protection.
Beijing s race to halt the pandemic has clogged highways and logistics, stranded people and shut countless factories, causing HUGE disruption that is rippling through global supply chains explained a member of the CBC at the figaro
Observing China is not just a way to enter a new market.
What happens there is extremely important for anticipating changes in cultural practices, technologies and uses. These are all the more interesting to understand as they operate almost behind closed doors, with very few foreign brands breaking into China and Internet control preventing global monopolies from entering the Chinese market explained a member of the Chinese Business Club.
Thus, Facebook does not exist in China, in the same way as Google.
Instead, hundreds of thousands of players share the market, drawing inspiration from American models while adapting them to Chinese culture. But it happens that their models are now exported abroad: TikTok (TikTok in France: 2019 figures, advertising formats, brand safety, etc.) is based, for example, on a Chinese application, Douyin, which offers additional functionalities not yet implemented. in other countries.
Taking an interest in China means anticipating uses that have not yet been exported to other countries but which are likely to arrive here as we move towards greater digital maturity.
E-commerce in China, a dense ecosystem
In terms of e-commerce, China is now a model. The sector operates according to its own codes and represents, only for the B2C part, more than a trillion dollars
It is an incredibly powerful market that took advantage of the SARS crisis in 2002-2003 to develop, giving rise to behemoths of online commerce.
The best way to look at it is this: the machine that China is exporting to the world is working fine as it is. What is happening is that the engineers working for the famous brand — the one that every American, European, and Asian country uses source
Among the biggest e-commerce players in China
Alibaba Group: 56.15 billion dollars in turnover in 2019, a real e-commerce octopus comparable to Amazon and with many entities facilitating online commerce.
Among the sites and applications owned by Alibaba and used by the Chinese for shopping on the Internet, we find Tmall and Taobao, which have respectively 8.4% and 52.6% penetration rates in the shopping application market according to Statistics. However, it is difficult to separate these two entities, because Taobao permanently links to Tmall: during a search, users will be able to choose between buying on Tmall from recognized sellers, or buying on Taobao from people evaluated on their sales performance on the site.
To better differentiate the two sites, a clarification:
Tmall is a B2C marketplace offering major brands to sell their products on the platform and offering luxury brands a dedicated corner called Luxury Pavilion. Its creators also recently opened a second corner, Luxury Soho, a platform that targets a younger clientele and offers out-of-season luxury products for technically lower prices.
Taobao is a marketplace for the sale of products and services between individuals and semi-pros linked to Tmall. The average basket is $30 according to Companies filings. The site is equipped with social features, including a platform dedicated to livestreaming, Taobao Live, where people film themselves presenting products, like teleshopping. The platform has 299 million active users per day.
On the sidelines, Alipay, Alibaba's payment tool comparable to Paypal or Lydia facilitates transactions.
How To Use Digital MediaTo Sell Ice Cream In China
The buying and selling of products and services in China is very different from that in the United States or Europe. Here, you would need a business license or a special certification to sell products in hotels, resorts, or malls. In China, you can sell virtually anything—including candy, food, beauty products, and household chemicals. This means there are many new options for sellers of ice cream. Many of them are based on imported products, but there is also a growing number of niche options. These include products made from scratches such as premium ice cream varieties, as well as goods that can be made entirely in the home such as natural ice cream and custard.
China's traffic stars may be losing popularity. A recent report from Shiqu Engine shows that celebrity marketing events fell by 50.9 per cent in March 2022 compared to the same time last year. However, co-branded marketing rose 91.3 percent and 55.7 percent respectively while new product marketing increased 6.6 times.
Star KOL
The Traffic stars, a Chinese term that refers to KOLs who drive high-quality digital traffic, have helped brands achieve rapid growth for new products. While the continuing pandemic could partially explain the decline in celebrity events, with Shanghai still under lockdown and Shenzhen just beginning to recover, it also points to shifting tides within China's entertainment sector. Brands that fail to respond to ambassadors' poor behavior quickly are also being caught in the crossfire. This includes Kris Wu's sexual assault case last year, and the recent tax evasion cases livestreamer Viya as well as actor Deng Lun.source
A new study shows that China's current crackdown on celebrity "idolatry has had a significant impact on marketing practices featuring these figures.
Marketing Agencies Tips
According to marketing agencies, the use of traffic stars (or music and film celebrities that generate huge consumer traffic online) in marketing campaigns dropped 50.9% between March 2021 and March 2019. According to the report, this was despite an increase in product launches and events.
Scandals
China has been the victim of a slew of scandals involving celebrities in recent years. These range from tax fraud to sexual assault allegations. The government has made strenuous efforts to curb the use of celebrities in product marketing as the scandals mount.
There are many scandals, but the most notable is the disappearance Zhao Wei. This actress has been compared to Angelina Jolie in China. The 46-year old billionaire disappeared last August. All of her television series and films were removed from the internet and her -like Weibo page, which had 86,000,000 followers, was closed. Zhao and her husband were banned from the Shanghai Stock Exchange in 2008 for their unsuccessful takeover of a company. According to the bourse, they "disrupted the market order."
Actors problems in CHina
Zheng Shuang was another A-list actress and was removed from the Chinese entertainment industry. She had been reported to have two children in America through surrogacy in China.
Zheng is one of many celebrities who have been charged with tax evasion. This skyrocketed when China set a limit on the amount that stars can be paid for blockbuster movies.
#meToo
Last summer, the scandals reached their height when Kris Wu, a Chinese-Canadian pop singer, was arrested for rape allegations. China's #MeToo movement reached a fever pitch after the incident. Big-name foreign and domestic brands immediately removed Wu, including LVMH Moet Hennessy Louis Vuitton MC+0.37%
Apologies
It has not been heard from, KOL made an apology for the surrogacy, Wu denied the rape allegations before he was taken into custody.
Analysts said that in addition to direct Beijing intervention, the chilling effect caused companies to reconsider engagements with celebrities.
Brands in China
"Many brands are scared and looking for less risky alternatives than celebrities who can disappear overnight, bringing negative associations with the brands they endorse, and swallowing large amounts of marketing budgets that could be spent elsewhere," Philip Chen (managing director of Gentlemen Marketing agency China)
China has been using media and official channels to create a wave disapproval for allegedly "unwholesome", public figures and an increase in public standards. This is a key component of President Xi Jinping’s "common prosperity” campaign. It seeks to reduce income inequality and curb wealth and excess. It is a good times for small KOL - Models in China ?
Instagram is obstructed in China. It was hindered discontinuously beginning in 2014 and now it is totally controlled. Endeavoring to get to the application from inside territory China will bring about a blunder message saying the feed can’t be invigorated. Instagram is likewise missing from Chinese application stores.
Cross-line internet business (CBEC) has been utilized to supply Chinese shoppers for a long time. However, it has been genuinely unregulated from numerous angles. On the main January 2019, the Chinese government provided, refreshed, and forced new principles on cross-line exchange:
China’s food and refreshment utilization has developed drastically in the course of recent years, and progressively changed from an industry-headed to a utilization-driven market.
in 2019, China will supplant the US as the world's biggest attire market. In any case, regardless of the promising development of the clothing market in China, the quick fashion market in China is confronting the difficulties of both homegrown rivalry and quality-arranged utilization update
So you're keen on selling in China? Fantastic! There are a lot of chances for organizations hoping to venture into the Chinese market, as per speakers at Alibaba's Door '17 occasion this week.
Tmall Worldwide, as one of the most mainstream cross-fringe e-commerce(CBEC), still make extraordinary progress in the previous source
This water bottle is proficient in keeping fluids, both cold and warm. The triple protection property of the jug empowers beverages to stay hot for around 12 hours and cold for around 25 hours. In any event, when you are wandering in the sweltering sun,
China's exports startlingly fell the most in two years in December, while imports also contracted, pointing to additional weakness on the planet's second-largest economy in 2019 and deteriorating global interest.
Adding to policymakers' worries, information on Monday also showed China posted its biggest exchange surplus with the US on record in 2018, which could provoke President Donald Trump to increase pressure on Beijing in their harsh exchange dispute.
The size of the nutrient and health supplements market shows an upward pattern.
The most mainstream things of the nutrient market in China are vitamins E, C and A. Albeit most Chinese brands are confided in vitamins and health supplements market on account of their long history, Australian Brands, as Swisse, are additionally well known.
Are natural items more secure than different items? Are imported products truly worth paying 2-3 times the cost of homegrown things?
These are a portion of the inquiries reliable Chinese buyers may wind up asking when they venture into one of the global supermarkets that presently speck the top level urban areas along China’s coastline. Given the ongoing food outrages and the subsequent wide-scale doubt towards homegrown food items, many working class Chinese shoppers have demonstrated to be eager to dish out additional money for health nourishments and imported products to subdue tensions about homegrown sanitation. This has made new speculation open doors for unfamiliar speculators in food business in China, particularly those associated with natural and health food items.
Xi Jinping’s China is showing a superpower’s ambition. A few years prior, numerous American observers actually trusted that China would get used to a supporting function in the liberal global request or would present—probably—a test to U.S. influence in the Western Pacific. The standard way of thinking was that China would look for an extended territorial job—and a diminished U.S. job—but would defer to the removed future any global ambitions. Presently, notwithstanding, the signs that China is equipping to challenge America’s global administration are unmistakable, and they are ubiquitous.
As the country’s driving exchanging country and a Gross domestic product of more than $10 trillion, China is an alluring alternative for business extension. In any case, organizations can’t just depend on the showcasing systems that they have executed in western societies when dispatching their brand in Asia. These advertising efforts may not resound with the neighborhood Chinese market.
How to open a Tmall Store? Tmall Account? How to negociate with Alibaba B2C platform Tmall.com
We try to explain everything in this article + video
About Tmall
Tmall guideline
Here you will find details on the entry process, the different types of stores that can be opened via Tmall.hk, and the documents required to get started and launch your store.
Be sure you're ready to invest the necessary time and resources into your store launch, as opening and running a store on Tmall.hk will require strong commitment.
It belongs to Alibaba Group, is a very popular e.commerce site among Chinese consumers and is the place where many international companies are selling their goods. Currently, Tmall has over 50% market share of B2C business in the Asian giant and in a short time will become the biggest online marketplace. More than 5.400 overseas brands coming from 25 different countries and regions have already set up an store on Tmall Global and more vendors are interested to do it
Cashless
china spends more by WeChat that makes a higher revenue for it
With
best in class system and popularity for incredible restorative practice, Hong
Kong is known for five star medicinal services. It positions seventh on the
planet, with women in the nation having the longest normal future contrasted
and different nations.
Telehealth,
mechanical autonomy, and the sky is the limit from there
The
potential applications for Technology incorporate everything from
"wise," blood-delicate swathes for dialysis patients to robots that
help stroke patients exercise or keep dementia patients involved. In the
working theater, mechanical laparoscopic surgery has turned out to be
moderately typical.
The
web of things and huge Data are driving positive disturbance worldwide in
social insurance and different enterprises. In Hong Kong, there are as of now a
couple of establishments that are looking at how portability may spare time,
cash, and inconvenience for methods that needn't bother with an individual
visit.
Cataclysmic
dangers from security breaks in China
Everything
sounds like an overcome new world, yet there are cautioning signs on this
interstate to advanced wellbeing administration that must not be disregarded.
The
fundamental worry here is the manner by which effectively IoT Devices can be
hacked. They are possibly the most helpless focuses for digital aggressors
today for the very way of their connectedness, the individual data they store,
and the general absence of security conventions.
Passwords
on a stick
IoT
Devices, similar to all advanced Technologies, accompanied managerial benefits
to give a specific level of security. In any case, we frequently ignore the
need to change the industrial facility default watchword on such Devices, and
default passwords are basic and simple to hack. We just need to reference the
far reaching sway created by traded off Devices of Starhub clients to see the
harm potential for the medicinal services industry.
The
potential harm from hacked IoT Devices incorporates the loss of individual,
private patient Data and the opening of an entryway into the bigger doctor's
facility system. Absolutely, online vaults of Data empower medical attendants
and different experts to effectively give guidance remotely. However, consider
the possibility that digital aggressors access such Data.
The
review additionally demonstrated that 53 percent of associations (over all
divisions) still store special and authoritative passwords in a Word archive or
spreadsheet, while 39 percent utilize a common server or USB stick.
The
arrangement in Chinese way
Luckily,
there are all around characterized steps that associations can go for broke.
Enabling
IoT Devices to impart transparently and uninhibitedly cannot proceed anymore.
While it is the obligation of the merchants to make securing their Devices
simple—and industry-authorized principles and directions might be important to
uphold these practices—managerial benefit must be overseen by both the client
and seller. source
Digital Stafftraining is another basic region. A review by Ponemon Institute as of late
detailed that 56 percent of security specialists said organization insiders are
the essential driver of security breaks—not because of malevolent performers,
but rather just awful security propensities.
The
main line of resistance against the well meaning insider is mindfulness and
training. All workers ought to be taught to comprehend the dangers,
authoritative approaches, and the purposes behind those strategies. "WeChat is the center of any event strategy in China, invitation, payment, group animation, sharing pictures. That also the database of any event agency in China" explained MVP Event, a leading event agency based in Shanghai QR Code on WeChat
Wechat avoid Tax on crossborder ?
Wechat avoid these tax that Taobao and JD have to pay in 2017 but it is another topic...
Advantaged
records are another zone of concern. The absence of responsibility and security
of favored records is frequently misused by digital aggressors. The advantages
of defensive controls and discovery abilities on favored records and
certifications ought not to be disregarded as a major aspect of a thorough
security system.
Nearly 900 million Internet users in China and begin to aggressively shop online in 2020.
The challenge for outlets online business is to define exactly who their customers are and how they make their buying decisions. In other words , what influences to spend money online?
What we do know is that men shop differently than women, even when it comes to online shopping. For example, we know that men tend to be more , let's call it , goal oriented when they shop online . But they also tend to buy things specifically for themselves. That said , both sexes are looking for two key elements: the lower prices and greater convenience .
Chinese Consumers
A report from Nielsen on online purchasing behavior of Chinese consumers has shown that for a couple of key categories covered by the survey , men were more active than women in online shopping. Eighty percent of male respondents ( against 59 % of women ) put online for consumer electronics purchases , while 71 % of male respondents ( against 66 % of women ) put online to buy services .
With more people shopping on the internet , we also see the online shoppers are becoming more impatient as they shop . If they can not easily find what they want , they move quickly . They want to shop on their terms and timelines.
Key of Success ?
So how can we ensure online shopping is rooted in the experience of the Internet at large for online consumers in China?
According to the survey , 66% of consumers were connected to both users microblog and social networking site . The implication for brands is to use their microblog presence as centers for the dissemination of information to combine and meet all other digital platforms as a business site , a mini - site, the page brand social networking campaigns and viral video content.
With the penetration of smartphones , e-commerce is changing a little further to m- commerce. We can see that consumers are not even wait to get home to turn on their computer and start spending . Consumers want to browse and buy when they want it - on the subway , waiting for friends or even during meal times . Engage with mobile users is essential in this regard and most other markets.
Unlike Amazon 's dominance in the U.S. 's , there are many large e -commerce in China fierce competition level players , so it might take longer for a standout leader to emerge . For now, the players existing ecommerce face costly challenges around logistics and price. Some are also struggling with the alignment of the purchase online and offline experience. Shops and / pickup flexible delivery are very popular, especially when combined with smart promotions through online platforms and offline.
Satisfied customers with successful online purchases are likely to drive more sales as consumers share their positive experiences via social media.
A Nielsen survey found 85% of Chinese consumers regularly used social media to share their experiences with online shopping .
As retailers seek to align and grow their business online and offline, the challenge is to develop effective marketing strategies for the sophisticated Chinese consumer:
1 . Gaining confidence -
Trust is the key -Olivier VEROT
Create an environment of trust with your customers and make them feel valued. Each brand must take some time to understand the specific online networks that engage their customers and become a part of it . Relying on trusted experts or appropriate celebrities in China has also managed to build trust .
The bottom line is that emotion is key. In a world where the consumer sees hundreds of advertisements in a single day space , which triggers an emotional response is proven to give your product or brand the attention and recognition it needs to stand out. From there , you build the dependence of the brand , success here will take care of itself as consumers will recommend the product to others.
2 . Get Connected -
Chinese online shoppers are mainly young consumers seeking value and convenience educated . Offering assortment of unique products online and giving consumers more convenient options for payment and delivery are also likely to resonate with these buyers.
Loos at Apple video in 2020
3 . Communications -
Again , social media is a powerful communication platform that is watched several times a day. E -commerce and online shopping store overthrow the consumer conversation in the traditional sense. Consumers are now looking websites retailers specific products and learning of goods via social media. Retailers must engage in this social conversation and interact with tech-savvy consumers in China are becoming more open to increase e -commerce spending. It is also suggested that a campaign offline / online integrated doubles the recall of your brand.
Weibo is losing its “cool” factor, like what’s going on with Facebook in the West.
In any case, marketing brands on Weibo, whenever done accurately, can be extremely proficient and practical. Owning to its huge client base and set up brand name in China, Sina Weibo, much the same as its Western comparable, Facebook, basically can’t be disregarded.
Advertising and brand promotion on Weibo is quite different from Facebook and Twitter in the following ways:
On Weibo there are no any focused on commercials which show up anyplace outside of the newsfeed stream. This implies Weibo is substantially more like Twitter – every one of the messages, including the promotions, appear in-stream. Basically, promoting along these lines turns out to be progressively about substance marketing. Then again, it is commonly increasingly hard to catch the intended interest group precisely enough.
Weibo’s in-stream publicizing item is classified “Fensi Tong” which has two valuing models: initial one is CPM (cost per thousand impressions) which is at present estimated at 5 Yuan for every CPM. The subsequent model depends on number of communications with the promotion: clicks, sending the advertisement, following the publicist and sparing the promotion. This model uses offering framework, which like Google AdWords with the base offer as of now set at 0.5 Yuan per cooperation.
The publicizing model that is one of a kind to Weibo is based around KOLs (Key Opinion Leaders). Those are people who have a large number of devotees and their posts, as a result, become the ads that pull in a great deal of impressions and retweets. There are a few degrees of KOLs on Weibo set apart with a capital “V” of various shading after their names for various client types. For instance, the orange “V” represents an individual client while the blue “V” is saved for bunch client, for example, an organization, an association or a news source. Contacting KOLs in your field and creating association with them is consistently, by a long shot, the most productive brand building system.
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.
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:
The brand to invest in branding, marketing and only have to take care about the distribution
which they are good at.
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 :
positive reviews, stories, page about the brand
taobao &Little Red Book.. to check if there is already reseller. If yes, that is positive, this means someone is already buying from them.
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.
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
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
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
you manage your store like tmall, you manage everything, you invest, market etc
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.
The Chinese baby care market experienced double-digit growth last year driven by dynamic and sustainable factors. In order to capture this large and rapidly growing market, it is important to understand Chinese mothers, who are not only unique in the West but also dynamic within their own demographic group, with significant regional differences. The childcare market, which amounts to 100 billion RMB ($ 14.8 billion), is mainly motivated by the desire of Chinese mothers to exchange for better quality and food security, as well as the population of 56 million children in China and the rapid growth of citizens' income.
The baby care market in China
Based on these enduring factors, the BCG predicts that the baby care market in China will be the largest in the world. (For more information on growing the baby care market in China, including the development of online counseling forums, see the related article "Baby Love".) Take the example of the infant formula (FMI): it ranks first in China (and is the largest market of the IMF in the world) with an estimated market value of $ 7.4 billion. The BCG found that single is more important as a result of China's one-child policy, which often leads to a higher percentage of child-care income than in the Western world. Expenses of Chinese mothers for their babies have increased exponentially and characterize a broader trend in the sector.
The baby-care categories
To better understand the trends in the baby-care categories, such as baby foods and diapers, and explain why consumers choose one brand over another, Nielsen surveyed respondents from 60 countries online, including China, having purchased these products in the last five years. The results reveal important information about the purchase path and identify the most influential online and offline sources in the process. In China, changes in the selective politics of two children, rapid urbanization and confidence in China encouraged the adoption of convenience lifestyles, making infant formula and baby food prepared more desirable.
