Reaching over the border: istyle aims to connect with Chinese consumers through live commerce

In September, the company announced that it was establishing Over The Border, a new Multi-Channel Network (MCN) company centred on live commerce.

According to istyle, the MCN will promote and manage user development, product procurement, manage content, train influencers and collaborate with other organisations such as social media platforms to push its brands out to the consumer.

“[Over The Border] was established to utilise the existing IP-based business—which makes use of the @cosme network nurtured by istyle —to fully dive into a new sector of people-based services, thereby creating a new pillar for our group,”​ said Osuke Kurashima, representative director of Over The Border.

Kurashima told CosmeticsDesign-Asia​ that the firm believes the MCN industry and live commerce market will continue to expand, especially with the improvement of streaming quality and the expansion of sales volume through the channel.

He added that the firm sees this advancement as an opportunity to create “totally unique”​ shopping experiences.

“istyle has always held up the ideal of combining online and offline marketing since its establishment and believes that live commerce is a tool to create our very own value that benefits the Japanese cosmetic industry as a whole.”​

Replacing in-bound demand

By establishing this company and reaching out to Chinese consumers, istyle hopes to be able to recover the in-bound demand it lost due to the decline in tourists.

According to its FY2020 financial results, sales at domestic retail stores declined year on year despite the contribution of its brand-new flagship store in Harajuku.

Net sales fell year-on-year for the first time since the company was founded, resulting in operating profit decline by JPY2.3bn (USD22m) and an extraordinary loss of JPY3.6bn (USD34m).

The company attributed this loss to the global slump caused by pandemic, which caused the majority of its brick-and-mortar stores to temporarily close for two months.

In addition to replacing inbound demand, the company also plans to use this venture as a platform to study the trends in China.

“We also want to analyse the latest trends of people-based businesses in China and take early action to support the development of Japanese brands in China,”​ said Kurashima.

The company plans to work with e-commerce platforms such as Tmall and JD.com, as well as short TikTok, Kuaishou, Xiaohongshu and WeChat. “We think the possibilities are wide-ranging,”​ said Kurashima.

Kurashima noted that the company already has a presence on Chinese social media platforms, with more than three million followers across various platforms.

“Our influence continues to grow annually. In the future, we hope to turn this small business into a full-scale marketing consultancy business in order to provide even more value.”​

Moving forward, the company hopes to accomplish three goals in the next 12 months.

First, it hopes to employ Chinese people in Japan to help conduct cross-border live commerce in @cosme.

It also hopes to form strategic alliances with established streamers and MCN business owners and combine their influence with @cosme assets to promote Japanese cosmetic brands in China.

Kurashima added: “Thirdly, we will cooperate with brands with high potential but have not broken into China's market yet and provide comprehensive hands-on support from overall business strategy design to marketing and sales.”​