In the past year, the mainland’s crowded and highly competitive beauty market has been completely reshaped. We have seen the fall of many brands. South Korea’s underperforming players include 3CE Stylenanda and The Face Shop. Influencer makeup label Huda Beauty, Too Faced, Glam Gloweven LVMH’s Guochao skincare facility Cha Lin have closed all direct sales channels in China.
That said, the phenomenon does not signal the decline of the mainland beauty sector. Instead, the market is thriving. According to the latest report by global dataChina’s cosmetics market is expected to grow at a compound annual growth rate of 7.4%, reaching $11.7 billion (RMB 80 billion) by 2026, according to the report.
“The domestic beauty market and consumer behavior are changing to become perhaps the most informed, sophisticated and demanding in the world,” said Lin Lin Jacobs, CEO of CIBE, mainland China’s largest international beauty fair. I will.” In recent years, online platforms have allowed consumers to actually educate themselves. Shoppers looking to save money now have access to cheaper beauty products. Pinty Flat replacement, affordable substitute. Meanwhile, rising living standards and social his media exposure have spread knowledge of his sophisticated skincare and makeup routine.
So who is consolidating their position in China, and more importantly, how?
gallery style retail space
At the end of 2022, up-and-coming domestic makeup brand Florasis opened its first offline flagship store “Yinyuan 隐园” on the banks of West Lake in Hangzhou. As its name suggests, the 1,000-square-meter interior reflects a traditional Chinese garden design with courtyards and exterior courtyards. according to Florasys Spokespersonthe brick-and-mortar store aims to create an art gallery-style beauty retail space that allows consumers to fully immerse themselves in the brand’s DNA and shop for customizable, limited-edition products.
The opening marks an important milestone for the five-year-old label. Founded in 2017, Florasis draws inspiration from oriental aesthetics and craftsmanship, capitalizing on the rise of Guochao to quickly become popular online. But after years of online growth, Dao Nguyen, founder of Essenzia By Dao, a beauty and fragrance marketing agency, said opening a physical retail space was a big move for Chinese brands. We see it as legitimacy and a first step towards a move towards luxury.
“From Chinese garden architecture inspiration to customization and limited editions, we bring your complete vision to life. I think this works because it brings added value and a richer experience compared to just ‘buying’ products online,” she says. still daily report.
Experiential and Emotional O2O Retail
Despite the convenience e-commerce offers and the impact of the pandemic on retail, brick-and-mortar stores cannot be fully replaced by online shopping. However, that functionality has changed.
“The goal of today’s beauty stores is to amplify the brand experience to create a more emotional connection,” says Nguyen. Rather than calculating the value of a site based on sales per square foot, businesses should leverage it as a key touchpoint for brand and product discovery and entice consumers to spend time with it. I have.
Nguyen added: [online-to-offline] That means recruiting offline and building loyalty online. Armani’s newest retail format, Armonia, the global flagship store at the Shenzhen One Avenue Excellence Center, is a perfect example. Covering 3,230 square feet, the building offers consumers a fully immersive high-tech and high-touch beauty experience. By scanning her QR code at Armonia’s entrance, shoppers can sync the experience to her O2O. Users are diagnosed with WeChat mini-programs, suggesting paths through the store and unique digital art.
Appointments for in-person Armani “Skin Lab” analysis can be booked on WeChat, while shoppers learn about their skin, identify their “mood pairing” fragrances and try out makeup AR styles in-store.according to brandthe same concept will be launched in Hainan in the first quarter of this year.
Domestic and small independent brands face tough competition from mature European, Korean and Japanese giants who leverage sophisticated product formulations and huge R&D budgets to win loyal customers worldwide facing For example, Japanese brands SK-II and Shiseido, Korean name His Whoo, and Swiss ultra-luxury skincare La Prairie are all very popular beauty brands in the Chinese market due to their unique ingredients and formulas.
Domestic beauty establishments are notorious for spending huge amounts of money on marketing with little allocation to research and development. This approach helps to acquire new consumers quickly, but the lack of unique patented formulas results in low consumer retention.
To solve the high consumer acquisition costs and encourage repeat purchases, Florasis uses a system of packaging and marketing inspired by traditional Chinese herbal medicine ingredients developed by renowned beauty researcher Li Huiliang. , we shift our focus to the research and development of oriental beauty.
“I think it is a smart and inevitable move for a Chinese makeup brand to go head-to-head with an international luxury brand. But like all smart moves, success depends on the authenticity and quality of execution,” concludes Jacobs.
Given the vast selection of brands and products and the polarization of the market, creating a unique value proposition and emotional experience is critical to influencing consumer decisions. So brands that can afford it are investing in R&D and building giant art-like spaces dedicated to consumer experience.