The cosmetics sector in China ? A goldmine !
China is the world’s second largest cosmetics market with €23 billion in size and a growth of 26% last year and €203 billion revenue. It is particularly due to countryside towns that are developing faster than Beijing or Shanghai. With the e-commerce, the opportunities are of huge and the amount of potential customers are endless.
However, the marlet is dominated by few lucky ones, especially in the high-end sector. All the big foreign brands such as L’Oreal, NIVEA, Avon, OLAY and Shiseido are running the industry. It means they have already gained favor of Chinese customers. In fact, over 80% of China cosmetics market is dominated by foreign brands.
The current trends
Today, half of the market is dominated by skin care and make up product. Nevertheless, there are other sector that might be interesting to have a look such as medical cosmetics, the children’s skin care and the men’s skin care that are rapidly growing.
The medical cosmetics will bring more than 2 billion euros next year thanks to a growth rate of 10-20%. The children’s skin care is another potential market which is now lead by Johnson’s baby (80% market share !), Princefrog and Mentholatum. According to Euromonitor, men’s skin care experience an annual growth of 30%. The revenue reached 380 million euros in 2012 and will keep on going thanks to the acceptances from Chinese men that are caring more and more about their skin.
Customer trust more foreign cosmetics brands because it brings them quality and recognition. However, those brands are most of the time expensive and it allows only young or middle aged female in big cities to buy them.
The importance of the e-commerce in the cosmetic sector
The e-commerce of China is doing really great lately. Average growth on the past few years of 30%, 200 billion euros revenue, the cosmetic sector has not been spare ! According to iResearch China the turnover has increased by 60% and reached 12 billion euros last year. The Chinese Internet offers different type of sites to do your purchases : professional cosmetics site (like Jumei), comprehensive sites and company on-line store such as Lancôme.
The main advantage of using the e-commerce site to generate your business is that you can reach much more customers, saving up budget and the trouble of negotiation with numbers of supermarket, shopping mall or stores. Besides, for brands that are not able to sell directly to small cities or rural area, ecommerce can even help to develop market there without spending money on distribution network. All you need to do is to promote your store and try to increase the traffic.
How to control your e-reputation ?
Cosmetics are one of the products that demand a lot of budget to control your reputation. Most of the time, sales depend on it. To do so, you need to know where Chinese go to find information. If you control the source of information, you can successfully control the reputation.
SEO E-reputation :
Controling what can be seen and not be seen is an essential part of your e-reputation. Chinese customers will first look your cosmetic brand up by typing your brand name. You must control what they see by making sure that only good reviews, comments and stories are present on Baidu’s first page. That is a first and essential step.
SNS Social networks
The SNS are a key factor in China. Chinese cosmetics consumers, especially girls, tend to look for and trust what other users or key opinion leaders say about the product. There are two kinds of SNS you need to care about: micro-blogging and professional SNS.
51.87% of micro-bloggers will search the products they see on E-commerce sites which is more than the 49.91% who will go directly to the homepage of the brand. Pictures and links in the posts will also be checked by 49.57% of the micro-bloggers so it shows that you need to build a Social Media Integration for your brand and product.
Being official on Social networks is being trustworthy
To do so, we advise you to create an official brand account, realize the Design of it, publish interesting content about your brand, promote this account depending on your positioning and target customers.
On those sites, you will find many people, mostly girls, quite professional in cosmetics with their comment and evaluation on products they use. It is very important and it influences customers a lot.