Chinese beauty brands are making headway overseas. Data from Lazada, one of Southeast Asia’s largest e-commerce platforms, shows order volume of Chinese beauty products on its online shopping hub LazMall doubled on China’s Double 11 shopping festival, compared with 9.9 promotions. Among them, the order volume of Chinese cosmetics brands increased by 160%. The order volume of Chinese cosmetics sellers for Lazada Malaysia increased by 500% compared with 9.9 promotions.
In addition to Southeast Asia, the global beauty industry continues to focus on the future market in Japan, Europe, and the United States. These destinations are also the main target for Chinese beauty brands to expand their business. Flower Knows, a Chinese cosmetics brand founded in 2016, entered Japan in 2019, and now has nearly 1,000 offline stores in the country. Flower Knows opened an independent station DTC mode mainly for European and American markets in the middle of 2022, with annual GMV expected to reach 10 million yuan (1.39 million US dollars).
According to the data released by the General Administration of Customs of China, the export value of beauty cosmetics and personal daily use products from China reached 4.852 billion US dollars in 2021, an annual increase of 14.4%. According to the 2021 Beauty Industry Trend Insight Report released by CBNData First Financial Data Center, there are now 25 Chinese beauty brands in the overseas market, with a scaled growth of more than 10 times, most of which are emerging brands established after 2016.
Supported by China's advanced manufacturing capacity, the hot consumer market has spawned mature brands and a mature approach, and the Chinese cosmetics industry has a strong spillover effect driving the fast growth of domestic brands in China. Even overseas users are beginning to appreciate and are willing to try Chinese brand products, but each brand has different points of entry into emerging overseas markets. Some rely on cost performance, some rely on style, and some rely on offline channels.
At present, the development path of Chinese beauty brands can be summarized in two directions: some brands choose to use emerging social media as their content and establish unique brand styles to attract consumers; other brands choose to highlight the price advantage and quickly expand their scale through price tag in the platform channel.
The former is more in line with the current development trend, but the challenge is that compared with international brands, Chinese brands lack experience in building brand value in overseas markets and may pay more trial-and-error costs. The latter is a more familiar development path for Chinese brands, as they can occupy the market position first and then seek brand building and upgrading. Its disadvantage lies in the inability to obtain sufficient profit margins at scale to support long-term development.
Like Flower Knows, Chinese beauty brands that have achieved certain success in the international market are often supporters of the new, higher quality and higher profitability development path. On the basis of maintaining the uniqueness of product design, these Chinese beauty brands will carry out localized content construction and operation in different markets, shape brand style, establish aesthetic resonance with consumers, and achieve sales growth.
The key to this development path is finding a spiritual core for the brand. This core needs to be universal and common, as well as resonate with people as much as possible, so as to ensure brand awareness in different regions and among different consumer groups. This is the premise for Chinese beauty brands to succeed in the international market and the challenge they must overcome.
The brand message needs to be echoed at the product level. Flower Knows’ unique designs present consumers with a fairy tale experience, with elements such as vintage cherry and oriental flowers, as well as teddy bears. By integrating fairy tale elements from different cultural backgrounds into the product design concept, each product series from Flower Knows reflects different worldviews, so they can meet the dreams of customers around the globe.
Mastering these trends, the unique designs and concept expression are key to the success of Flower Knows. The Crystal Unicorn series and Strawberry Rococo series launched in 2022 embodies their inherent strengths. The Crystal Unicorn series uses crystal texture design to express a fairy tale snow and ice wonderland. The Strawberry Rococo series integrates strawberry colors and rococo elements to create an 18th century palace vibe. It has seamless crossover appeal in various markets.
In addition to shaping the spiritual core, the new beauty brands from China also pay more attention to the R&D and innovation ability in original design. Yang Zifeng, the founder of Flower Knows, said most brands rely on the supply chain updating and R&D capabilities, and it is difficult to make great differentiation and upgrading in terms of functionality alone.
Flower Knows’ winning strategy has been to lead in product development by striving for striking beauty and detail while optimizing the quality of materials and feel of the cosmetics. Each product series has three to four sets of exclusive molds, to increase the imitation cost of competitors and reduce the risk of being copied. The practice of releasing new products more frequently ensures items and series feature new colors, bringing consumers more variety of their favorite products.
Of course, there is still great uncertainty for Chinese beauty brands to enter the international market. On the one hand, the makeup that non-Asian consumers like is quite different from that of Asian consumers and must be adjusted to fit that market. On the other hand, in the face of competitors, team operation and the stability of the international market will also affect the expansion of Chinese beauty brands.
It is certain that with the increasingly fierce competition in China's domestic market, Chinese cosmetics brands will continue to increase their investment in the international market and seek to establish a higher brand ceiling.
(by Li Wei, Sam Overhold)