by Ker Zheng & Queenie Yao
While the rest of the world continues to reel from Covid-19 lockdowns and a steep drop in global demand for discretionary products such as cosmetics, China’s consumer market is back to life and the beauty category stands to gain from this. China’s beauty & cosmetics market is growing at an upbeat 12.6% pace, according to a report by China International Beauty Expo.
While in the past the China market was dominated by the likes of L’Oreal, Estee Lauder, and other global conglomerates, as of late local Chinese brands such as Perfect Diary have been giving them a run for their money. Buttressed by increasingly larger rounds of venture capital funding, more localized marketing strategies, and a 100% devotion to their home market, these mid-priced brands are quickly grabbing market share.
We take a look at five of these leading brands and what they’re doing to stay ahead of the competition.
Sub-category: Color Cosmetics
Perfect Diary, a brand founded in 2016 by ex-Procter & Gamble executives, has risen quickly to become the number one brand in Tmall’s Beauty & Cosmetics category. This year, during the mid-year 618 e-commerce festival, Perfect Diary beat out global brands such as Lancome to retain its no. 1 position.
The brand stands out for its unique co-branded product lines, having partnered with Beijing’s Forbidden City museum, Chinese National Geographic, The Metropolitan Museum of Art, The British Museum, the Discovery Channel and even the TV series The Game of Thrones.
Here’s a look at its collaboration with New York’s Metropolitan Museum of Art, in which different pieces are adorned with imprints of famous historical paintings such as the Mona Lisa. The collection sold over 51,000 orders in its first month on Tmall last year.
Perfect Diary’s The Met special edition collection. Source: Perfect Diary WeChat Official Account
Perfect Diary also adopts a pyramid-structure approach to influencer marketing in China, in which it uses top-profile influencers to set the tone and topics, and smaller influencers to seed awareness across different customer sub-segments.
Perfect Diary’s Chinese National Geographic special-edition eye shadow. Source: Perfect Diary Tmall Flagship Store
Perfect Diary’s localized marketing strategy has been key to its rapid growth. Now it is taking the business to the next level with plans to open 600 new stores over the next three years. Key to this will be its impending IPO; the brand’s parent company Yatsen E-Commerce is reportedly looking to Goldman Sachs and Morgan Stanley to help it raise US$400-500 million in new funding.
Sub-category: Skincare and color cosmetics
Chando is a local skincare brand from Shanghai that emphasizes a focus on natural ingredients.
For this year’s 618 mid-year e-commerce festival, its top-selling facial serum and facial masks grew 600% and 500% YoY respectively on its Tmall flagship store. For JD.com, Chando was the number five brand within the beauty category, and ranked number one amongst local Chinese competitors.
While the brand has been around for nearly 20 years, Chando only recently started to spice up its marketing strategies to cater to Chinese millennials. Last year, it launched a co-branded product line with Bilibili, a popular video-sharing platform amongst generation Z customers (those under 25 years of age), ahead of the Double 12 (December 12) e-commerce festival. The product line features imprints of Bilibili’s cartoon-TV logo on lipstick and foundation items, amongst others.
CHANDO X Bilibili special-edition cosmetics collection. Source: CHANDO's WeChat Official Account
Bilibili has become one of the hottest video-sharing platforms for China’s younger generations, having originally started as an anime community platform that expanded to other verticals such as lifestyle and beauty. It’s not uncommon for Chinese influencers to post mid-length cosmetics tutorial videos on Bilibili, not unlike those on Youtube in the US.
In exchange, a popular brand like Chando helps Bilibili expand its business in the beauty/cosmetics content space, as well as provide a more visible offline presence for marketing purposes.
Chando x Trevor Andrew co-branded lipsticks 2020. Source: SOHU News
As part of another campaign, Chando partnered up with American artist Trevor Andrew to create a more fun-looking product line, adorned with his hand-drawn designs. Launched during the depths of the Covid-19 lockdowns in China, the collection became quite popular amongst younger customers.
Category: Color Cosmetics
Florasis is another popular local brand, raking in over 150 million RMB in sales during the mid-year 618 e-commerce festival this year.
The brand has a unique, long-term partnership with top influencer Austin Li, with him regularly posting content on social media platforms such as Weibo, WeChat, and Douyin, the Chinese version of Tik Tok. Such content frequently directs users to e-commerce platforms where they can make purchases.
Another key characteristic of the brand is its embrace of local Chinese culture, adorning its products with images from historical times to evoke a sense of nostalgia and pride.
In the picture to the left, the brand partnered with local alcohol brand Luzhoulaojiao to launch a special collection of drinks and color cosmetics, with casings covered with 1930s Shanghai-era images. On the right, a Chinese New Year gift box pops open to reveal a miniature Chinese drama stage set. Such creative collections help brands like Florasis to stand out in a sea of competitors.
Florasis’s Luzhoulaojiao special collection (left) Florasis’s Year of Rat gift set (right). Source: Florasis's Tmall Flagship Store
Sensitive skincare brand Winona has also recently partnered with China’s national post office, China Post, to create a limited-edition gift box, resembling a small red & green purse. The color green is China Post’s official color, while red is Winona’s official color. Launched earlier this year, the gift set saw sales on JD.com jump 300% YoY in the first 30 minutes.
Winona X China Post special gift set. Source: Winona's WeChat Account
To promote the product launch, Winona held a special livestreaming session that lasted ten days, in which hosts gave skincare application tips. In 500 offline stores across China, beauty attendants also offered one-on-one services to help customers resolve problems with their skin. Such an integrated omni-channel campaign with value-added services helps to endear customers to the brand.
Winona x China Post livestreaming event during 618 e-commerce festival. Source: Tencent News
Sub-category: Color Cosmetics
Zeesea is an emerging color cosmetics brand that currently sells around 370,000 items a month on Tmall. Last year it collaborated with the British Museum to launch a product line that was adorned with ancient Egyptian designs. Certain designs feature different gods and headdresses common in ancient Egyptian lore.
Zeesea x British Museum special-edition collection. Source: Zeesea Official Website
Partnering with an international institution helps to create a sense of exclusiveness and approval. While in the past local Chinese brands focused on the low-end segment of the market, now they are moving up the value chain; such global partnerships elevate the brand’s image in the eyes of its target customers.
1. Local Chinese brands previously focused on the low-end segment of the market in China, but are now moving up the value chain to focus on China’s middle-class consumers.
2. Some brands have taken pride in their Chinese heritage, using images from past eras to evoke a sense of national pride and nostalgia from their customers.
3. Other brands have launched creative co-branded product lines with museums, influencers, artists, and even alcohol brands to help differentiate themselves.