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Cross-border can be profitable for foreign cosmetics brands

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China is now part of the largest cosmetics markets in the world.

Online Chinese consumers

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About the figures, by 2013, the sales of cosmetics totaled US $32.3 billion. In April 2014, the total value of online cosmetics was US $1.35 billion. This number could have been achieved because Chinese online shoppers are now able to buy products via cross-border ecommerce platforms.

Indeed, since the creation of the Free Trade Zone, lots of foreign ecommerce websites have made possible for their Chinese consumers to buy their products online from China. The aim behind that is not only to make Chinese consumers happy, but it was mostly to take advantage of the ecommerce boom of the country and thus to increase their sales.

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During the year 2013, cross-border ecommerce platforms totaled around 18 million Chinese buyers who spent 216 billion Yuan (almost US $35 billion). As it was reported by a market research of Nielsen, by 2018, we expect that the number of online shoppers will step up to 35.6 million and that they will spend to 1 trillion Yuan (around US $150 billion).

Based on the online shoppers’ tastes, the most successful products bought from ecommerce sites are from United States firstly and then from Hong Kong, Malaysia, Netherlands, South Korea, Denmark, Japan, Taiwan, UK and Sweden.

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Most of the time, the Chinese biggest online shoppers are young and well-educated. They prefer buying products on foreign ecommerce website because in their mind, the products are better quality and authentic.The most bought online products are skin care products, color cosmetics and perfume coming from overseas.

The right platform

Chinese platform

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Chinese online shoppers are lucky to be from China. Indeed, the country offers them quite a lot of online platforms to buy any kind of cosmetics products from any Chinese or even international brands.

For example, the three main cross-border cosmetics platforms in China are Amazon, Sasa and Tmall international. These websites grew rapidly due to the Chinese people’s obsession for beauty products.

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However, they did not become famous just like that. They had to promote themselves in China to attract Chinese consumers. Having a good visibility in China through search engines for example like the Chinese Google, Baidu. But you need to be referenced on the first page of this one to succeed.

Foreign platform

Selling your products through your own website or via a foreign ecommerce platforms can be a good thing to do. Indeed, these types of platforms are gaining popularity among Chinese cosmetics buyers.

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Indeed, cross-border ecommerce websites are becoming even more popular because thanks to them, Chinese consumers are able to purchase products that are not available or are way too expensive in their own country.

Another reason is the authenticity. Indeed, Chinese cross-border platforms are getting invade by fake products. But if Chinese shoppers are paying an expensive product, it’s to get the original one, not a fake. That’s why they trust more in overseas ecommerce websites.

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Having your own website is also a good way to avoid Chinese platforms imposed fees. But you have to know that Chinese shoppers won’t buy on your website if you don’t integrate Chinese online system payments. They don’t trust foreign ones.

L’Oréal sells on Taobao

L’Oréal is the biggest cosmetic brands in the world. It owns 12% of market shares in China and it uses the Chinese platform Taobao to sell its products. L’Oréal page on Taobao has a clear design without unnecessary informations. Each product has an image, a name and a price.

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Chinese consumers are easily influenced. Just an image or a sent and a good price can seduce them. They are more cautious about price. According to a Korean Journal report made during the “Qingming” festival, Chinese shoppers spent 160% more than usual because it was sales time. 

But L’Oréal is facing a problem by selling its products on Taobao, it’s its SEO on Baidu. If we look for “L’Oréal, Taobao, official shop,” the first results won’t be the real links to the official website. A fake L’Oréal website appears first. The unused consumers are likely to buy on these fake website. Counterfeiting is a real problem in China.

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If you are a cosmetic brand and you want to enter online cosmetic market in China, you have to know these points. First, you have to understand Chinese consumers’ behavior and then you can decided about the platform you will use to sell your product. But whatever your choice will be, keep in mind that you have to get a Chinese payment system otherwise Chinese shoppers won’t buy on your website.

To know more about cosmetic digital strategy, click here.

If you want to sell your product in China, contact us.

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