What Are Some Renowned Chinese Cosmetic Brands
Brands are choosing their distribution channels more carefully due to the rapidly growing online trade
As L2 reports, China will be the world's largest cosmetics and personal care market by 2020 at the latest. In the current Digital IQ Index, the market research institute therefore looks at the Chinese cosmetics market.
In total, the experts rated the digital skills of 98 cosmetic brands in the categories of skin care, decorative cosmetics and perfumes. For this purpose, the brands were examined using the four categories “Site & E-Commerce”, “Digital Marketing”, “Mobile” and “Social Media”.
Online trading platforms are overtaking direct-to-consumer e-commerce
As L2 indicates, online trade in the Chinese cosmetics industry is growing very quickly. While online sales accounted for only 4% of total sales in 2010, it was already 22% in 2015. A significant increase can also be seen in skin care (2010: 3%; 2015: 19%) and fragrances (2010: 3%; 2015: 11%). Sales via the Internet are mainly concentrated on dealers such as Tmall or JD.com and less on the manufacturers' sites.
According to the experts, this fragmentation is forcing the cosmetics brands to select the relevant sales channels more carefully. L2 states that China is the first market where companies have restricted their digital investments. Within the last year, many brands - including Guerlain, Sephora, Sisley, Avéne, Kiehl’s or La Mer - decided to have a presence on Tmall or JD.com. Direct-to-consumer e-commerce, on the other hand, seems to be becoming increasingly difficult. Some brands - for example La Roche-Posay and Vichy - even gave up direct sales entirely.
The winners: high-quality products and renowned brands
The demands placed on cosmetics and skin care products have also changed in China. The proportion of consumers who buy higher quality products has almost doubled since 2014. The online search for prestige brands has increased accordingly: within the last year it was 16.5 times higher than the search for mass products. But Western brands are also popular in China: Here the online search volume is four times as high as is the case with Asian brands.
Large corporations convince with digital competence
When it comes to digital skills, well-known brands seem to be among the winners: the Digital IQ percentile ranks for premium brands rose by an average of 9% each year, while the performance of mass products slipped.
In the current assessment, global corporations in particular are doing very well. The winner is the Estée Lauder brand, which impressed with a digital IQ in all four categories “Site & E-Commerce”, “Digital Marketing”, “Mobile” and “Social Media”. The L’Oréal Group ranks second with its own brand L’Oréal and 135 points and fourth with Lancôme and 127 points. P&G is third with Olay (128 points) and fifth with SK-II (126 points).
Source: L2, photo: Fotolia / Tom Wang
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