China's e-commerce market is the largest in the world, with 2019 sales tipped to reach $2 trillion, more than triple U.S. sales of $600 billion, according to eMarketer. China's strength in e-commerce might be exemplified by the cosmetic sector. A recent report produced by market-research firm Kantar for Tmall indicates that annual online sales of cosmetics, skincare, and personal-care products in China grew at a sizzling 46%, 40%, and 37%, respectively, over the past 12 months, outpacing the overall consumer goods category, which increased by 34%.
Online cosmetics in China is a big business and growing bigger?but how does it work? Let’s look at three marketing tactics employed by both Chinese and international brands in China.
Co-branding allows established brands to get a lift from a new partner brand. Maybelline partnered with BigEve, a beauty brand founded by 31-year-old Zhang Dayi, a key opinion leader (KOL) who also goes by the name BigEve Zhang. Their co-branded collection called BigEve × Maybelline contained lipsticks, “gentle,” “little cute,” “cold little devil,” and “white red tomato.” BigEve’s 11 million Weibo followers, mostly Gen Z, urban women from tier-two and -three cities, made the cooperation a good fit. The lipstick collection generated some $114,000 in sales in the first three months of its launch.
Beyond two-way unions, brands can also seek multi-party initiatives. Watsons, the largest beauty and personal care chain store in Asia, teamed with the “163 Music” app and reality show Idol Producer to launch six music-themed looks for brands featured in their China retail locations. These six makeup looks represented Jazz, Pop, Hip-Hop, Light Music, Ballad and Antique. Watsons invited boy bands from Idol Producer to perform, encouraged attendees to sing the songs from “163 Music,” and offered makeup services to all. As a result, the Baidu search index for Watsons more than doubled throughout the event.
Intellectual property marketing
IP marketing involves collaboration with original content such as movies, novels or animation. From hashtags alone, this tends to generate the greatest digital buzz in the Chinese cosmetics market.
For example, L'Oreal Men recently launched a limited edition product line when the movie Avengers: Endgame was shown in China. In addition to promotions on social media platforms (Wechat, Weibo, LRB and Douyin), L'Oreal Men launched pop-up stores in major cinemas and advertised on digital ticketing channels. More than 100,000 units of limited edition products were sold on Tmall during the movie’s release.
Winona, a Chinese medical skincare brand, cooperated with Budding Pop, a cartoon meme popular among Chinese Gen Z and millennials, to launch a limited edition collection of face masks during last year's Single’s Day. Different face masks featured one of four functions: anti-allergy, hydration, whitening and repair. Each mask came with tips on skin improvement. The face masks attracted approximately 30,000 buyers and generated $400,000 in sales during the one-day event. For the past 12 months, Winona has been one of the top 10 beauty brands in sales on Tmall.
Other brands have not been slow to adapt to this marketing technique. Collaborating with the TV show National Treasure, L’Oreal launched a line of lipstick that evoked colors from ancient China, connecting both culture and history. Chando, the second-best selling Chinese beauty brand, cooperated with the video game “Cross Fire,” embedding its men’s skincare line into the game by offering customized character’s equipment and appearance.
Cross-category marketing refers to branded collaboration with art and cultural events. Many brands have launched limited-edition items in collaboration campaigns with museums. Perfect Diary, one of the more successful Chinese cosmetics brands in the past two years, collaborated with the British Museum, to launch two “Fantastic” eye shadow kits. The eye shadow shades, one of warm colors and the other cold, were inspired by Italian Renaissance “maiolica” art. Both kits came with tote bags and a maiolica-shaped pair of earrings. Besides the glimmering, localized look of the kit, a large volume of branded articles and short videos posted by influencers helped drive sales and affinity. Education on maiolica art and Renaissance history were also provided on social media platforms, with content “Provided by Perfect Diary.” This series of marketing tactics turned the kit into a top-ten product on Tmall. The collaboration generated $1.3 million during Single’s Day sales, bringing flagship store sales to almost $5 million.
China’s cosmetics market is constantly evolving and the bar for attracting attention is being raised every day. Brands should connect with third-parties, take advantage of cultural trends, and develop customized and limited edition products to capture consumers who love a story along with the products.