Cosmetic Compliance
Intelligence & Solutions
Home / News / Details

How do foreign niche brands compete in the Chinese market? Insights from Down Under

As the second-largest cosmetics market only after the United States, China has been attracting massive attention from international stakeholders. The focus is not solely due to the enormous scale, value, and untapped potential of the market but also because of various trade facilitation measures China has implemented to coax international stakeholders to enter the market. Although most of the large multinational cosmetics companies are now well represented in China, niche brands from smaller manufacturers are now featuring more heavily.

This change coincides with the ever-evolving demands of Chinese consumers who are increasingly seeking a more comprehensive array of products. The impact of KOLs and KOCs has elevated the status of niche imported cosmetics among China's younger consumers. It is predicted that in the coming year, there will be more than 100 niche beauty brands with a presence on Tmall Global[1].

However, not every entrant can get a solid foothold in the market. ChemLinked interviewed Rick Chinn, the founder of Australian niche organic skincare brand Floropathy. The brand has been in China for one year and is still in the adaptation and exploration stage. The CEO shared his views on how to develop a niche brand in China.

Most Chinese consumers do not habitually read product labels

Unlike consumers in Europe, Australia, and the United States, which read packages to gain knowledge about the product and its ingredients, Rick Chinn said that a lot of Chinese still rely on marketing information. The aesthetics of the packaging also tends to be more important than the ingredient information.

This likely means that Chinese consumers need the education to help them shift their focus. This type of consumer education is already shaping markets and fostering a new group of consumers that are savvy on the safety and efficacy of the ingredients in their products.

Limitations on sales of organic skincare products

China has banned the use of labeling terminology such as "organic" or "100% natural" on cosmetics since 2012. As a result, products of these brands could only be sold through Tmall Global and other cross-border e-commerce platforms, which places significant limitations on these products.

For example, as Rich Chinn said, "Floropathy is unable to compete with other large brands because the way a cross-border brand interacts with the market is very different from an on-shelf brand. " No bricks and mortar presence means people can't smell and try the products of the brand. Therefore it has to adopt other strategies such as:

  • Aligning the brand with trendy topics like evidence-based efficacy;

  • Telling the story of the brand and showcasing the product lifecycle;

  • Educating consumers about product safety;

  • Targeting specific populations like pregnant women and people with sensitive skin;

  • Reaching consumers in lower-tier cities.

Leveraging Local Marketing Methods

Previously, it took a decade or more for a brand to reach millions of households, but that time has been shortened dramatically since the advent of social media.

The latest trend in China's cosmetics marketing is to leverage social e-commerce platforms such as the Red and Tik Tok and promote products through KOLs (key opinion leaders) and KOCs (key opinion consumers) in the forms of video clips and live streaming.

To localize its marketing, Floropathy has chosen Red and Tik Tok to obtain social media traction and engagement. It has already opened an official account on Red and is looking for KOLs in areas that fit the brand’s positioning. The brand has also opened two accounts in Tik Tok, one for CEO himself to share his life experience in China, and the other for the brand to promote products. So far, there are nearly 200 notes related to Floropathy in Red, and in Tik Tok, the number of followers on both accounts has reached 30 thousand.

It's interesting to find that the CEO's life sharing account has many more followers than the brand's official account. One way the brand can succeed is to make the CEO a web celebrity in China.

We provide full-scale global cosmetic market entry services (including cosmetic registering & filing, regulatory consultation, customized training, market research, branding strategy). Please contact us to discuss how we can help you by cosmetic@chemlinked.com
Copyright: unless otherwise stated all contents of this website are ©2024 - REACH24H Consulting Group - All Rights Reserved - For permission to use any content on this site, please contact cleditor@chemlinked.com