Chinese beauty brands up digital investment, report says

It analyses various key segments within the sectors including skin care, colour cosmetics and fragrance companies.

A large selection of some of the country’s most notable e-commerce and social media brands including Tmall, JD.com, Jumei, VIP.com, Weibo, WeChat, Baidu, and Miaopai are awarded the status of either genius, gifted, average, challenged or feeble.

Understanding market competition​

Increasingly, companies are looking to propel their brand awareness potential and strengthen their identities through connecting their offline marketing activities with online efforts.

Labelling brands by their level of digital expertise provides a standardised measure for both consumers and companies, alike. This enables them to measure their proficiency against their competitors and revise their marketing and advertising initiatives accordingly.

China is a leading global nation when it comes to beauty manufacturing, retail and sales, and “is expected to become the world's largest beauty market by 2020”, according to Danielle Bailey, head of APAC research at L2.

“In the last five years, online beauty sales channels have rapidly expanded, cross-border e-commerce and makeup are increasingly popular categories, and consumer preference is shifting to higher-end goods.”

Rising disposable income​

Consumers are willing to increase their spend on premium brands — those deemed high-quality and with a strong reputation — as these rose in popularity in 2016 compared to mass brands. The former achieved five times more search volume and 16.5 times higher the number of brand term searches. While the average Digital IQ percentile rank fell more than 15% for mass brands, prestige brands were up by 9%.

While it’s true that consumers demand luxurious products that are based on success, wealth and influence, their need for convenience is still important as more shoppers turn to their digital devices to complete purchases.

The number of users exploring e-commerce beauty platform, Jumei, has increased by 87% since 2014, with the brand adoption of Tmall up by 57% and JD.com by 240%.

Digital snakes and ladders​

In recent years, the messaging and calling app, WeChat, has positioned itself as a powerful platform for beauty brands to promote their products, with 100% actively established on the app.

Despite these optimum adoption rates, only 5% of users have been viewed by over 75,000 WeChat communicators, while a whopping 84% received less than 25,000 views.

As a result, brands’ posts dropped to only 2.78 during Q4 of 2015 and even further to 1.73 posts a week in Q3 2016.

Now, beauty brands in China are having to update and transform their digital marketing strategies to ensure they match consumer needs.

One method consumers are adopting in the hope to achieve these is livestreaming. Last year, 80% of brands livestreamed; which quickly grew throughout the year as a chosen digital method of communication.

In June 2016, only 10% of beauty brands jumped on the trend via Tmall, but by October, this had risen to 35%. As a result, the number of interactions from livestreams increased from 61,974 to 5,259,462.