One of the most promising e-commerce market
Does the Chinese market is the new Eldorado for cosmetics? Obviously, with a population of 1.34 billion person, a women’s purchasing power increasing and the fact that men are starting to use skin care, it is cristal clear. This year, there are 600 million netizens in China and half of them already purchased on Internet last year.
If the e-commerce has an incredible growth in China with a rate of 40% from one year to another and a total number of transaction of €354 billion, it is also the case concerning the cosmetics industry. However, this is a way much more difficult market to penetrate. Firstly because, it is the second largest in the world behind the Western Europe one and secondly because its growth is around 15% which makes it terribly sensitive to new trends.
Of the €25 billion reported each year, €7 billion are coming directly from the e-commerce’s branch. Hard to believe when about 20 years ago, cosmetic industry brought back €25 million. Euromonitor also announced that the high-end market of skin care (now estimated at €3.5 billion) will double by 2017. Especially in view of the growing middle class and the increasing number of millionaires.
To be able to establish the best ways possible in this changeable market, it is suggested to have a good distribution including power supply across the country, a good position that you don’t get lost in the potential customers mass of China, a notoriety and a rock-solid reputation because it is probably the main factor in the purchasing decisions of Chinese consumers.
How does Chinese cosmetic consumers think?
The digital sector is King in China. If you want to run your cosmetics brand in China, you need to know where he will buy his cosmetics and what is influencing his purchase decision.
A few years ago, Chinese spent all their afternoon in Commercial mall to purchase or just enjoy the air conditioning, it is way less the case today. Now, consumers no longer grant the same amount of time when it comes to visit outlets. When it comes to cosmetics, they will not hesitate to go try products directly on stores, but from the moment they know the product they want to buy, there is a good chance they will buy directly from the Internet.
After the many scandals that have inflamed the Web about bad skin or health products, oppressive pollution and counterfeit products, Chinese are more and more paying attention to their skin and their health.
To ensure the veracity of a product they will rely on their physical networks as well as their virtual networks. What they like with Internet is that they can have access to the entire community’s experiences. Information comes and goes very quickly on the Internet and it is often a very good place to start a marketing campaign of a new product. Video and advertising are highly appreciated by Chinese and online they can « like » and « share » it with their friends.
After searching for information about your brand, , your products, their effects and theirs qualities, these customers will be concerned about the price. Indeed, outlets and mall often ask for large commissions on cosmetics sale which is also raising prices. Therefore, consumers seek a better price when buying online.
Jumei is the online platform to use if you want to sale cosmetics, consumers usually go to this site to purchase cosmetics product especially when they do not know yet the brand they want. In addition it gives you visibility and it ensures a certain degree of reliability. Customers trust brands that are presented on this platform. Why ? Because they can interact with brands directly on it and see what other clients thought about their product.
If you want to avoid the additional costs of those shopping centers and distribution, and also target provinces of China, Jumei is the perfect place to create your first point of sale in China and see if your products are meeting the market demand.
The importance of your e-reputation
In China, one of the key points is to win the consumer’s confidence and unfortunately it does not happen overnight even if you already have a good reputation abroad. The solution to have a good reputation on the Web is to be master of your image. The competition is tough (especially in China!), consumers do not buy blindly and despite the immensity of the market, this is not an easy one to integrate.
Which is also an important point is unless you want to focus on the segment of skin care for men (which is growing), it’s the women you are going to target. Their involvement in today’s e-commerce is phenomenal and although they are less numerous than men, they spend more than they do. 60% of consumers who spend more than € 12,000 per year over the Internet are women. Their purchasing power and their empowerment is growing and they see the e-shopping as a relaxation and fun time.
Internet Word of Mouth (IWOM) is one of the first things that Chinese will bring importance. Before purchasing, consumers will dissect all information, demonstrations and previous customers reviews, opinion leaders, micro-bloggers or even professional SNS. Why it is important to know these Key Opinion Leaders (KOL)? They (mostly young women) are having thousands even million followers or subscribers on their pages. They have an incredible influence on customers purchase decision.
The key for customers recognition and loyalty is to allow them to identify with the brand values and the ambassador that you have selected, to reassure them by offering free demonstrations in stores (Online-to-offline marketing), having opinion leaders on your side who will not hesitate to promote your new product and just by conforting them with the quality of your product.
It is true that social networks are often a source of concern because brands are always afraid of a flood of bad comments. That is why today, it is necessary to know how to use and control this useful tool to boost your sales. This is why experts help on the digital world crisis is essential.