NetEase Kaola, China’s' cross-border e-commerce operator, has recently formed strategic cooperation agreements with numerous Japan-based premium brands.
These domestic names include Tenga, Sastty, Shinyakoso, Spa Treatment, belulu, Purevivi, LuLuLun and Dokkan Abura Das.
Developing a commercial strategy
As part of its business strategy, NetEase decided to focus its attention on growth in the 'Made in Japan' cosmetics and personal care items arena, amongst others. Now, the e-commerce platform aims to spend 500 billion yen (€3.8 bn) on releasing an increased amount of 'Made in Japan' products in the cosmetics marketplace.
Zhang Lei, CEO, NetEase Kaola released its Made in Japan strategy during a commercial visit to Japan. When there, NetEase committed to working with six core Japanese names. This decision comes as it aims to vary NetEase Kaola's product mix and appeal to Chinese beauty buyers’ demands for higher quality and high-end items.
These Made in Japan names included Earth, a professional beauty brand; Kirindo, a cosmeceuticals chain store; Naris, a skin care brand; Spa Treatment, a beauty and skin care brand; and Kobayashi Pharmaceutical, which is already familiar to Chinese consumers.
China and Japan
To date, Japan has remained NetEase Kaola's largest import market, due to the demand and popularity of Made in Japan cosmeceuticals, personal care, maternal, child care and household products. As such, Japanese products became the largest contributor to NetEase Kaola between 2015 and 2017.
“With Chinese shoppers becoming considerably more discerning in their tastes and in what they expect from the goods they purchase, shoppers increasingly value quality over price,” NetEase Kaola stated in a recent press release.
“The value that Japanese culture places on craftsmanship are in line with NetEase Kaola's commitment of providing consumers with high-quality products.”
Rakuten, a leading e-commerce platform in Japan sells more than 400 popular Japanese brands on NetEase Kaola. Since making an agreement with NetEase Kaola in June 2016, the Chinese e-commerce platform has become Rakuten's largest sales channel in China.
"Prospects for the China-Japan cross-border e-commerce market remain promising. The number of affluent consumers is on the rise. We expect strong market demand to lead to expanded cooperation in the future and NetEase Kaola is a strong strategic partner,” stated Michio Takahashi, senior manager of cross-border trading business at Rakuten.
Takahashi went on to say in the release that while many Made in Japan products are well-known and popular in their home market, they are fairly unknown in China. As a result, Rakuten aims to offer accessible and affordable products as part of its cooperation with NetEase Kaola.