Chinese cosmetics distributors have a special way to function. For example, they don’t have the same relationship with their suppliers and they will never invest in the brand of their suppliers. Here’s why.
Lack of involvement
First of all, Chinese distributors are here to do business. It means that if a product is not working, they will change it and never take it back. All they want are results: no matter if they are with the same supplier or brand for years. They won’t invest in the brand of their suppliers: they will just distribute their products. Chinese people work like that: they like to do their jobs, and only it. They have strong demands for the products of their suppliers: quality products with a good packaging, an accurate positioning and a reputation. Chinese distributors will never do business with someone if they don’t have a strong reputation, or worse, a bad e-reputation. Chinese people like to be on internet and they will always search of information before purchasing a product. They will look on Internet and especially on the Social Medias to see what the customers say about the brand. More if it’s about cosmetic: a lot of cosmetic products are counterfeit in China, or show a really bad quality. So having a good e-reputation is essential for Chinese cosmetic distributors. If the products are not known by some customers, the distributor won’t take it. They objective number one is to make profit.
They are not especially loyal
If one of the brands they distribute is having a bad reputation or bad sales after having years of a good reputation, they will let the brand down, and stop distributing its products. If one of their supplier’s brand needs investment because of a reason or another, they won’t be the one they have to call to find support. They don’t want to invest on something that has a possibility to work hard. They are sure of their business, so they don’t want to take risks by investing on a cosmetic brand. Cosmetic are a like a trend: sometimes brands are the one and only, and the day after everyone stop thinking about them. If one product is bad, consumers will think the whole brand is bad, and won’t buy it again. Distributors sell products, and if they don’t sell it, it means the products are bad, not the distributors. Chinese people are very strict about that, and won’t change their minds. The fact that they distributed this brands for years, or did business with a supplier since their beginning won’t change anything. If something is not working, they will stop selling it.
They don’t do marketing
Chinese distributors are only here to distribute products, they will never do marketing for the brand. If the brand is in a bad position and needs help, their distributors won’t help it, on the contrary they will stop doing business with and find another brand that is working well. They are looking for easy business which doesn’t require to do another thing than just distribute. So they won’t promote a brand. There are a huge number of cosmetic brands in the world, so if they have problem with one, they can find another. Finding a cosmetic brand that want to offer its product in China is an easy thing: everyone now want to do business in China because this emergent country is full of new upper middle class people that are eager to have access to high-end products. So when doing cosmetic business with a Chinese distributor we don’t have to think that they need us and that they won’t let us down in difficult times. They think about short-time actions and not long-time actions. They see bad sales at the moment they arrive, and they will find a solution to this problem, mostly let the brand down, and stop doing business with it. They will avoid problems even if this is bad for the brand, because they think about the interest of the distributor first.
Chinese distributors work on reputation, just like all Chinese do. You are not known, you are a risk, for everyone in China. Too many health and safety scandals have been uncovered to leave consumers trust untouched. This is the same for distributors : you are not known, your product will not sell or it will be very difficult. Too much investment for very little return, especially in cosmetics with the registration procedure.
Therefore you must raise your brand notoriety and brand awareness before thinking about really doing business in China.
Contact us for more information about this to see what solution adapted to your brand we can offer