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What's Behind Charlotte Tilbury‘s Success in China?

A potential sale to a larger conglomerate could accelerate its expansion plans in the China market

by Ker Zheng

UK-based cosmetics brand Charlotte Tilbury recently made headlines after acquisition overtures were made by the likes of Unilever, L'Oreal, and Shiseido, valuing the company at well over US$1 billion. 

But little do people know that Charlotte Tilbury is now one of the hottest cosmetics brands in China; its popularity is driven by its easy-to-use, versatile, and relatively inexpensive products. A potential acquisition and expanded distribution network could mean big growth plans for the brand in China, which could become the world's largest consumer market as soon as the end of this year.

We take a look at Charlotte Tilbury's history and positioning in China, and discuss what makes the brand so appealing to Chinese consumers. 

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How Charlotte Tilbury Built its Brand in China

As early as 2018, Charlotte Tilbury began working with a mix of key opinion leaders (KOLs) and key opinion consumers (KOCs) to promote its brand, even before it officially started selling products in China. In fact, it worked with thousands of influencers on Weibo to post about the brand and its products, as well as beauty tutorials and review videos. 

The influencers focused on making the products appealing to Chinese consumers, who prefer simple, easy-to-use foundation and lipstick products that aren't too expensive. "Easy to use, easy to choose, and easy to gift" was one phrase used by an influencer to describe the brand and its flagship products in China. With most products selling for 200-450 RMB (US$28-63) each, the brand was accessible to both working professionals and college students.

Charlotte Tilbury also partnered with the likes of Austin Li, who tried on different shades of its color palette during a livestreaming video, receiving over 200,000 likes on his Weibo account. Mr. Li also posted an introductory video for the brand, garnering over 9.34 million views. 

Working with a top-tier influencer like Mr. Li can help set the tone for further commentary by other beauty bloggers, and also drive immediate attention and sales from a new customer base that normally wouldn't have discovered the brand. Smaller influencers might have more closer relationships with their fans and are better able to cater to their preferences; they likely have private WeChat groups, through which they dispense advice and product reviews. 

And starting in December 2018, Charlotte Tilbury also worked with Little B lifestyle concept stores to launch cross-border e-commerce pop-up experience stores in Shenzhen and Shanghai. While customers are not allowed to purchase products, the stand employs makeup artists that can help test different Charlotte Tilbury products and try on different looks; customers can then purchase products from the Charlotte Tilbury store on Tmall Global. 

Since Charlotte Tilbury has worked with A-list actresses and supermodels in the past, customers can try on different looks used by the same celebrities. Pop-up stores like these helps brands connect with younger millennial customers, who tend to post their experiences on WeChat and other social media networks. 

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A Charlotte Tilbury Experience Store in Shenzhen

Official Entry into China

Charlotte Tilbury first made its foray into Asia by launching its products in Hong Kong's famous Lane Crawford department stores in mid-2018. 

Why Hong Kong? It's not uncommon for brands to choose Hong Kong as their springboard into China - after all, Hong Kong has the highest influx of Chinese tourists every year, many of whom travel there exclusively for shopping trips. 

Rihanna's Fenty Beauty also launched in Hong Kong in September last year, opting to sell through luxury travel retailer DFS Group's stores. 

Hong Kong is also a free trade city, meaning that there is no sales tax on products aside from tobacco and alcohol. 

But in March 2019, Charlotte Tilbury finally opened its first official presence in the China market by setting up a flagship store on Tmall Global, Alibaba's cross-border e-commerce platform. 

Prior to this, Chinese consumers could only purchase Charlotte Tilbury products through gray-market resellers and a limited number of cross-border e-commerce retailers.

Part of this reason was due to mandated animal testing procedures, which are required by the Chinese government for imported cosmetics brands in China. Like many cruelty-free brands, Charlotte Tilbury refused to have its products tested on animals, which was why it, and many other cosmetics brands, cannot be found in mainland China retail stores. 

Through Tmall Global, however, Charlotte Tilbury could ship products from bonded warehouses in Chinese free trade zones and bypass animal testing requirements. Selling on Tmall Global also ensured that the brand could reach over 600 million consumers on the broader Tmall and Taobao platforms. 

Other beauty brands such as Kim Kardashian's KKW Beauty, Fenty Beauty, and Huda Beauty have used Tmall Global as a springboard for China market expansion over the last year. Tmall is also on a major drive to recruit international beauty brands; not only is the category in heavy demand, but the products are also light, easy-to-ship, and relatively affordable when compared to more upscale luxury products such as handbags. 

Driven by a livestreaming session with top makeup KOL Austin Li, Huda Beauty's Tmall Global launch in March drew over 300,000 visitors on the first day. Charlotte Tilbury's Tmall Global launch was the first time that the brand had opened an e-commerce presence outside the European and US countries. Now the flagship store sells over 50 products, with top sellers such as the Walk of Shame lipstick and Pillow Talk eye shadow pallette. 

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Charlotte Tilbury Tmall Global Store. Source: Official Tmall Global Website


Post-Acquisition Plans

An acquisition by one of the large beauty conglomerates would almost certainly entail further China expansion plans - after all, the beauty and skincare market in China is set to overtake the US market by 2023. 

Popular US skincare brand Drunk Elephant opened a Tmall Global store last August, and was purchased by Japanese beauty conglomerate Shiseido in October for US$845 million. Tatcha has also launched a Tmall Global flagship store this year, not long after its US$500 million acquisition by Unilever in June of last year. 

These days, competing in the China market requires a large amount of capital and a global distribution network. Competition from local beauty brands is heating up; brands such as Perfect Diary can launch 3-5 new products a month, and each of those products are customized for the Chinese consumer. 

Perhaps we will also start to see more beauty conglomerates purchasing local Asian brands; in December, popular Korean skincare brand Dr Jart+ was also sold to Estee Lauder for US$1.1 billion. Dr. Jart+ products are popular in China for their natural Tea Tree extract ingredients, which help to improve skin quality from within. 

The preferences of Korean and Japanese consumers are more similar to those of Chinese customers, and so products from these countries tend to be more popular in China. For example, Chinese beauty customers prefer to use Japanese skincare products for their natural ingredients and skin whitening features. 

Key Takeaways

1. Large conglomerates such as Unilever, L'Oreal, and Shiseido are bidding for UK-based cosmetics Charlotte Tilbury, which is rumored to be worth well over US$1 billion. 

2. Charlotte Tilbury is highly popular in the China market, where it's worked with thousands of KOLs to raise brand awareness. Charlotte Tilbury also launched its products in Hong Kong's Lane Crawford stores and opened a flagship store on Tmall Global, Alibaba's cross-border e-commerce platform.

3. A sale to a large conglomerate means that Charlotte Tilbury could fast-track its China expansion plans within the next few years. Many other brands such as Tatcha, Huda Beauty, KKW Beauty, Fenty Beauty, etc. have all launched Tmall stores over the last year to expand their presence in China. 

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