The market for cosmetics products in China is in constant evolution and it comes to more than 134 billion yuan. More and more foreign brands try to sell their products there and global groups such as L’Oreal, Estée Lauder or Clarins are already well established in the cosmetics landscape in China.
However, barriers to entry on the Chinese market are significant and it can be difficult to durably set up there. Chinese regulations make the import of these products complex, and procedures are lengthy and costly. Besides, being present on this market leads to additional costs due to local consumption habits: brands usually sell their products in specialised shops or in department stores and supermarkets where a team manages counter sales.
Brands are therefore looking for a simplified method to sell their products to this Chinese clientele. That’s where e-commerce websites come into play, especially cross-border shopping platforms. The latter enable a simple commercialisation in a tier country: a very good opportunity for firms trying to get around traditional sale methods in China. Chinese consumers can then purchase products from abroad and be delivered at home.
Cross-border shopping has many advantages, for brands as well as for consumers
Beauty brands can benefit greatly from cross-bording in China.
First of all, it represents a larger target for a brand, and the latter can then consider markets which were unreachable before. China is one of these attractive but difficult to penetrate markets. Seeing the enthusiasm Chinese consumers have for foreign cosmetics products, this solution opens doors to many players in this market. Besides, consumers in China use Internet a lot when buying products, mainly on their smartphone. It is thus simpler to reach these consumers thanks to cross-bording..
It also represents a gain in time but also in money when penetrating this market. If companies in the cosmetics sector usually need to be present in traditional points of sale, no presence in China is required here.
Lastly, and this is very important in China, cross-border shopping also enables a brand to have a control over its products. Indeed, there are many counterfeit products in the cosmetics market and it is essential for brands to be able to follow their products.
Cross-border shopping also has advantages for Chinese consumers
It first allows consumers to get products from abroad and have them delivered at their place, without a big price difference. Chinese consumers are fond of foreign beauty brands and it is a good way for them to buy these products for a cheaper price. Indeed products bought via cross-border platforms are subject to lower (almost none) taxes.
It is also a sign of good quality for them. After lots of scandals in the country, Chinese consumers are really wary of the products they find online. Cross-border shopping somehow ensures the authenticity of products.
Finally, it is a sales channel which fits into local consumption habits. E-commerce is really developed in China: consumers are always connected and are used to making purchases directly from their phone.
Be prepared, invest in branding and choose your cross-border shopping channel wisely
If the procedure seems simple, you should not forget that we are still talking about entering a new market, and some adjustment is needed in order to maximise your chances. First of all, localise your strategy: promotions, communication and product range need to be thought through. Using mandarin on your brand website for example is obviously essential if you want to be able to inform Internet users and appeal to the Chinese clientele.
However, maybe the most important element to work on prior to even think of integrating a cross-border platform is to invest in branding. Chinese consumers are very cautious about what they buy and will make a lot of research before making a purchase. Controlling your online image is a must, and you also need to be active on social media. That way, customers will know about your brand and products and will be willing to buy them. Cross-border e-commerce platforms will not even consider featuring a brand if it is not known by consumers and if it has a bad e-reputation.
Today, many of these platforms help brands in their efforts to conquer the Chinese market. Among the most popular ones are Tmall Global, Ymatou, Sasa, Kuajingtong, Amazon or JD Global, which works with Sephora on their product distribution.