It is no secret that defining beauty, as a standard, would be an impossible feat, more so today than ever before. The traditional silos of descriptive characteristics of markets, products, segments, and users and uses have disappeared and with them have brought an enormous number of opportunities, compactly packaged in with its changing challenges.
And just when you thought you knew everything about every brand that you will ever use…enter stage right: The China Beauty Factor (C-Beauty, as it is known, or will soon to be socially and commercially recognized). As with any of the transformational businesses that China has redesigned over the past 2 decades, the rise of D2C Beauty was one of the last, and the latest to be completely revamped.
As of 2019, China has positioned itself as the #2 beauty market in the world, with a steady CAGR of around 10% average throughout the past 5 years, divided into its 3 main categories: Skincare, Cosmetics, and Other cosmetic products.
According to research presented by JD.com, their beauty category assortment during 2020 was still able to massively expand grow over the second semester with revenues surpassing 20X, with both sales and new customers growing 180%+ during the festival season. One of the main drivers behind this?
Livestream. Yes. Once again, the “L” word. In an industry where discounts and promotions were unheard of, now, it is faced with a brand position conundrum as it outperforms any traditional sales channel in engagement, penetration, scale, reach and sales. No other brand has learnt to capitalize this better than China’s own Perfect Dairy.
Since its founding in 2017, only 2 years into the market, this Guangzhou based newly minted unicorn was able to fully integrate its catalogue and post a record number of sales during the 2019 Tmall 11.11 Shopping Festival. Once having attained market relevance (and dominance) the rest was easy. It quickly partnered with Li Jiaqi and expanded product offering to address the viewers and capitalize on the joint launch. Since then, it also reached into Luxury design cosmetics, collaboration with the British Museum, and designed seasonal in-trend products and packages aligned to the 2021 Lunar Year celebration.
In addition to trend-right product, incredible brand assets, collaboration through direct, private and public traffic channels comes their Virtual Hosts and brand representatives Xiaowanzi & Xiaomeizi (brief Segway into my next post) to connect and promote the lifestyle and resolve customer inquiries in real time.
The market strategy is also far from cookie-cutter. As if mimicking the segment, It requires a combination of cleanse, base, gently abrasive exfoliation and sealer complete with both digital and physical assets in perfect synchronicity to achieve the desired result. Starting from Private Traffic channels on WeChat, the Taobao and Tmall Livestream channels connect with KOLs & KOCs as well through their own channels educating, showcasing and promoting the most recent novelties which will result in additional assets shared on short-video platforms like Douyin & Kuaishou. The result? An all-inclusive immersive brand experience through curated brand assets in different communication channels, formats directed at different market sectors, all looking for the same thing: The next big thing and an unbeatable price which everyone will be talking about tomorrow!
Perfect Dairy MKT Campagin combining all the beauty in China.
So what makes it all work? It is actually not as complicated to summarize as it is to execute.
1) Customer
2) Quality
3) Channel
4) Creative product launches (season, a-seasonal, capsule, or concept drop)
5) Speed to new-market
By correctly addressing each channels target segment, the promotional activities can be tailored to outperform a traditional approach of average all around turnover and focuses more on bespoke temporary campaigns that require high engagement from the target market.
Although this is a simplified case study, brands such as Florasis, Fan Beauty or Scent Library have entered the conversation and competitive scene with some of the same strategies, simply not at the expense scale on digital social marketing programs as Perfect Diary has done and have focused more on enhancing the perception of quality in their products.
Who else are we looking at:
Chando: (skincare and cosmetics)
Winona (skincare)
Zeesea (cosmetics)
What brands are you looking at? Where are you drawing up your inspiration from?
Let me know which one is next on your radar, and I will be sure to put it up on the list.
Dr. Stephen C. Patton
The Retail Neuronomist
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