Digitally Native Beauty in China

The Power of Online Beauty Disruptors in China

Digital native beauty brands have been rising to become an industry disrupting force in the past three years in China’s cosmetics market. Emerging with a flair for consumer experience and control over their own distribution, these brands are often found on China’s prominent e-commerce platforms such as Tmall, JD, and Xiaohongshu.com.

Our preliminary research indicates that leading digital native beauty brands have achieved manufacturer sales of more than CNY 200 million (USD 30 million) in 2018 and constantly rank as the top-selling brands during grand “shopping festivals”—such as 6.18 Mid-year, Double 11, and Double 12—held by e-commerce platforms. Several factors contribute to the double- and even triple-digit growth of the digital native beauty brands:

  • Success of in KOLs and social media marketing
  • Affordable, value-for-money products with good quality
  • Light-asset business model of outsourced production and direct sales via e-commerce

Digital native beauty brands invest massively in marketing, ranging from 40% of revenue to as high as 90%. These brands rely on KOLs and social media as the most important marketing approach. Beauty KOLs who are active on popular social media platforms such as Douyin, WeChat, Xiaohongshu, and Weibo are playing a crucial role in influencing the purchasing decisions of consumers, particularly the younger generation of consumers in China. Austin (Jiaqi) Li is the most famous beauty KOL. The 27-year-old is the holder of the Guinness World Record for trying on the most lipsticks within 30 seconds. During the 6.18 Mid-Year campaign of 2019, Austin sold 150,000 lipsticks in 10 minutes of his live broadcasting. Nearly 50 million fans follow him on his social media accounts.

Austin tries on lipsticks while live broadcasting on social media.

Austin tries on lipsticks while live broadcasting on social media.

Austin and Jack Ma, co-founder of Alibaba Group, held a competition to see who could sell the most lipsticks during live broadcasting on Tmall for the 2018 Double 11 campaign. The result, of course: Austin won big.

Austin and Jack Ma, co-founder of Alibaba Group, held a competition to see who could sell the most lipsticks during live broadcasting on Tmall for the 2018 Double 11 campaign. The result, of course: Austin won big.

Intensive promotion is another important approach to retain customers and encourage repeat purchasing. Enticing discounts are offered during large-scale sales campaigns such as 6.18 Mid-year and Double 11, usually above 50%. Various smaller-scale promotional activities are conducted year round. And because digital native beauty brands regard interaction with consumers to be of vital importance, a dedicated team operates the brand’s account on social media platforms, usually with a personal name, such as “Xiaoxi” and “Xiaowanzi,” to bond with consumers.

Understanding the winning formulas of digital native beauty brands is highly beneficial to established marketers that are looking to grow their businesses further in the constantly changing and challenging beauty market of China. Our new report, Digital Native Beauty in China: Brand Monitor, will identify these disruptors and assess the factors that make them resonate with consumers including positioning, product assortment, marketing activity, and Internet platform selection.

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