Land of plenty : Nivea, Eucerin set for boost as Beiersdorf eyes strong potential in China’s skin care market
The maker of Nivea, La Prairie and Eucerin expects China’s skin care market to continue its growth trajectory despite the current global economic uncertainties brought about the novel coronavirus (COVID-19) pandemic.
“Even taking possible economic uncertainties into consideration, we expect Chinese skin care market to grow steadily and healthily in the coming years. The dynamic and importance of Chinese domestic consumption today is incomparable to what it was ten years ago,” said Inken Hollmann-Peters, VP of corporate communications, Beiersdorf.
In line with its road map for China, the company is aiming to expand its presence in the growth areas and strengthening its skin care brands Nivea, Maestro and La Prairie.
Last year, Beiersdorf zeroed in on China’s skin care market by divesting its Slek Haircare business to focus on Nivea, which it believes holds even more potential in the market.
“Looking at NIVEA’s strong position in Taiwan and Hongkong, but also in Japan, Thailand or Malaysia, we believe NIVEA has far bigger potential on China mainland than we have been able to tap into in recent years,” said Hollmann-Peters.
It also hopes to build on the successful introduction of Eucerin in China through Tmall last year.
“Further expanding the e-commerce success of our dermo-cosmetic business with Eucerin will be a focus. We have a full innovation pipeline, more differentiated according to different channels,” said Hollmann-Peters.
Additionally, it hopes to reinforce it's Cross Border e-Commerce (CBEC) business in China, to give local consumers ‘real-time’ access to innovations from its home market.
Speed and localisation
In July, the company announced that it had opened a new research and development facility in Shanghai dedicated to China.
The new facility, located in downtown Shanghai, is a crucial investment in China’s burgeoning skin care market.
“China, being one of the biggest and fastest-growing skin care markets certainly motivates us to do more and think long term supported by strategic investment. Our Shanghai Innovation Centre is the perfect example for this strategy,” said Hollmann-Peters.
Beiersdorf’s Innovation Centre in Shanghai is the second biggest research and development hub after the facility in Hamburg, Germany, where the company is based.
While Beiersdorf is well known for its research and development capabilities, it is not enough to ‘win’ China, said Hollmann-Peters. “There is hardly any market in the world that is so fiercely competitive.”
She added that Chinese consumers were both highly knowledgeable and demanding when it comes to skin care.
“For all international brands, this is a huge challenge whilst at the same time offering huge opportunities.”
With the new facility, the company can improve its speed-to-market by giving it more direct access into consumer insight and get products into the hands of consumers faster.
It will also allow the company to develop more ‘consumer-centric innovations' for China, which it has been doing for the last decade with products such as the Nivea Facial Amino Acid Cleanser.
“We are bringing all key functions together, enabling and accelerating excellent cross-functional collaboration among all the expert teams. A top facility has to be filled with life, with colleagues passionate to serve local consumer needs. This is a promising perspective,” said Hollmann-Peters.
Additionally, the company hopes the innovation centre will serve as a hub for open innovation, said Hollmann-Peters.
“The very central location in downtown Shanghai was a very deliberate choice. We want to host and engage with institutes, suppliers, start-ups and also individuals, with whom we share the level of ambition and dedication to skincare and explore ways of working together.”