China Market Entry for small beauty brands – Top tips

in GENERAL
top-tips-china-beauty

As we all should be, I am constantly learning and especially in a market as dynamic as China no one strategy will work indefinitely you need to have your ear to the ground and adapt quickly.

Having said that there are some tips that remain relevant and I think all beauty brands should take into account when planning optimal China market entry.

These tips are designed for Cross Border e-commerce beauty brands entering into the China market for the first time or one who wants to optimise their current operations.

I have focused on brands of small to medium size globally who have resources to invest in the China market but not to build out a large team.

TIP 1: Take long term approach – no quick wins

China is a land of opportunity in so many ways. 1.3 billion people, 894M of them are shopping online and e-commerce sales are growing at +17% YOY.  In 2020 e-commerce sales are expected to reach 30% of total retail sales which is amongst the highest percentages globally. 

But the reality is far from idyllic. China is big but it is also complex, and the ecommerce and social media ecosystems are completely different from the west. Let alone the consumer behaviour and purchasing dynamics. 

From my experience and that of many others I have worked with in the cross-border e-commerce space it will take 2-3 years to become profitable. That is a long time for a small brand to sink money into a market without seeing a return. So, before being wooed by big numbers make sure you are ready to invest.

Key reasons for the long period is building your brand and credibility in a market with a lot of very powerful gatekeepers in slow and expensive – Tmall/Taobao you need to drive traffic to your store – this costs money, most social networks require you to pay KOLs to gain visibility and followers and you may need to spend money on media as well to boost reach.

TIP 2: Find a great all-round partner – not multiple

This is a tough one. We are used to splitting up marketing and sales as they are a different skill set but if you are just entering the market try not to spread your money across too many agencies.

If you are focused on cross border e-commerce you will need a trade partner. These come in all shapes and sizes each with their own strengths and weaknesses. So, it will depend on your brand positioning and distribution approach what type will work for you best.

Some key areas of support most small to medium beauty brands will need when operating in China:

1. E-commerce Platform set up & on-going management: if you want to work with Alibaba is this trade partner an approved TP? What is their rating? This will make a difference to your store traffic, so it is important. Do they have a good relationship with the tmall global team in the category you sell in?

2. Social media platform strategy, set up and on-going management: they need to be able to advise and work on all platforms. What campaigns have they executed previously? Can they execute social selling campaigns? 

3. Content creation: Content is king! You need to have good quality content that will resonate with your audience. Find a TP that has a copywriting team who are experts in Beauty. They need to be interested and know what the consumer wants in order to adapt your global content to make it resonate locally on all your channels. And it sounds obvious but make sure you are consistent across e-commerce and social channels

4. KOL and KOCs: How do they work with KOLs? Are they purely focused on ecommerce KOLs to push sales or do they also understand the need for brand building KOLs and do they have a team in house who work with these KOLs directly or do they have to outsource? Can they execute KOC product seeding campaigns – these are extremely effective for small brands but require a lot of hand holding and manual work.

5. Search: SEO, SSO, SEM are all crucial to a marketing strategy anywhere in the world and China is no exception. Make sure your agency can execute a simple but effective search campaign. You need to have key words that are used consistently in all communication, you need KOLs and KOCs to also use these key words. 

6. PR: Make sure your message is spread outside of your own social and e-commerce platforms. Chinese consumers need more touch points than most other countries – 8 touchpoints before purchase vs. 4 in the west on average so make sure your brand is out there for them to find!

If your TP can to do all of the above, you should not need lots of marketing agencies in addition.

Make sure you ascertain the following during your discussions with TPs:

1. What are their core area of competence? Industry focus? Who is their biggest client?

2. What is the composition of their team? What skills do the team that will be working on your account have?

3. Be careful when negotiating that you have a good balance of performance vs. account management fee structure. Whilst you want to incentivise them to push sales you also want them to do what is best for the brand so there is a balance to be struck – if they can only make money by pushing sales then they will be constantly forcing you to discount for example. 

TIP 3: Create a master document in Chinese for all stakeholders

This is to ensure absolute consistency. Regardless of whether you are a big or small brand consistency is always an issue. In order to maximise your marketing dollars in China you need to be focused and consistent – I see this mistake over and over again. 

This master document should include:

– Brand Messaging hierarchy – brand promise, positioning statement, value proposition and your 3 key messages that make you unique. 

Whilst your brand promise, positioning and value proposition are unlikely to change, the 3 key messages you are pushing in China may be different from that of your home market so make sure you do your research and discuss what will resonate best with your China audience. 

– Core target audience: know who you are targeting and be narrow. China’s population is huge you need to speak to the right people with the right message. 

– Key words: based on the above choose your key words for China and use them consistently in all communication.

I recommend engaging a beauty specific freelance copywriter to help you craft this document in Chinese using the right language because as you give it to stakeholders, they are likely to use the wording as it is. 

TIP 4: Hire someone in house to manage your stakeholders

Even if you are a small business China is not a simple market. And even with the best Trade partner in the world they will still need someone to manage, support and provide information for them. 

I would recommend having a Chinese person in house who can work with the agency directly on a day to day basis. They can also foster relationships on behalf of your brand with KOLs. 

Their job should be 100% focused on China. I recommend that person be Chinese and ideally someone who is based in mainland China or has not been out of it for long. The market changes fast and you need someone with their ear to the ground, who uses all the main social networks and has a good network in the market. I would focus on someone with a strong marketing background as they are effectively your brand guardian. 

Conclusion

China market is complex but if you do the groundwork before launching into the market there are great opportunities to be had. At Clean Beauty Asia my passion is to help Indie beauty brands enter into the China market in the most optimal way. I am constantly discussing, researching and learning in order to support the Indie beauty industry. 

How can I help with your next steps to enter the China market?

1. Market audit of your brand in China – even if you have never marketed your brand in China you are likely to have some Chinese consumers. We can look at your brand’s current traction in the China market from an e-commerce and social perspective to ascertain the potential. This can include competitor analysis and social listening. 

2. Brand positioning and Messaging for China market – following the market audit we can look at who your core Chinese audience is and which of your brand messages will resonate best with this audience. Following on from this I can connect you with a great copy writer to put together your master brief for China.

3. Finding the right partner – I have worked with different brands and partners over the years, I can work with you through the process of finding the right partner for your brand.

4. Local team member – if you are not ready to build a team in the market or haven’t found the right person. I can support to manage your stakeholders on a retainer basis with my team in China. 

If you are still thinking about if the China market is right for you and want to understand more about the market and cross border e-commerce specifically then try my China masterclass – it will give you a comprehensive overview of how this unique e-commerce structure works in soon to be the world’s biggest beauty market.

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