Market Analysis & Trends in China
About the market analysis and trends in China, do not hesitate to read my previous article on the digitalization of the experience client on the Chinese cosmetics sector (french version).
Chinese industry VS Korean industry
Even though LaNeige is a Korean brand which was only implemented in 2002 in China whereas Herborist was launched in 1998, Chinese respondents had better knowledge about LaNeige. As we mentioned above, LaNeige has a young, playful image. Laneige’s products are perceived as efficient and trendy thanks to ‘water science’ technology with a reasonable price point. Thanks to K-Drama and K-Pop popularity (or the “Korean wave effect”), the K-beauty is becoming known worldwide which can explain Korean cosmetic impact and great popularity on the Chinese market. Indeed, more respondents have bought LaNeige’s products and more appreciated LaNeige’s visual for Valentine’s Day.
This tough competition of foreign and Chinese brands is not surprising as the Chinese market is a huge opportunity for all cosmetic companies around the world. In fact, China is a growing market for cosmetics especially skincare products which is currently the fastest-growing sector and is expected to keep growing in the next years. With the growing middle class, Chinese women are progressively becoming more interested into beauty related products.
Moreover, we can mention that new trends in the Chinese market can be a great business development opportunity for Chinese companies such as Herborist despite the fierce competition. Popularity of natural products with medical properties (cosmeceuticals) and the increased adoption of a more natural and greener lifestyle fits perfectly Herborist’s herbal care brand image.
Chinese Companies like Herborist are still lacking brand awareness and brand perception compared to international competitors.
By comparing Herborist and LaNeige branding strategy, Herborist brand identity is not very clear and creative in terms of storytelling and personification. Finding information on Herborist segmentation, target and brand history was quite difficult. On the other hand, Laneige identity was very easy to understand through their defined vision and “young modern sparkling women” personification. Chinese have a better knowledge about LaNeige and not only Korean but foreign brands seemed to be more popular. These differences might be explained by the fact that most of the foreign brands on the Chinese market like LaNeige are a global brand with strong overseas experience whereas Herborist is still more local than global.
Moreover, Herborist retail strategy still needs to improve. Indeed, even if Herborist is a Chinese brand, the company has the same strategy as foreign players. Herborist needs to use its advantage of being a domestic brand by creating flagship stores to establish a stronger brand identity and a unique customer journey. Its retail strategy seems to be confusing and does not fit its positioning very well as the brand has high-end counters in department stores but also counters at Carrefour. Herborist and Chinese companies in general can thus improve their branding and retailing strategies.
Investing in digital is definitely a major competitive advantage on the Chinese market. Indeed, China is a leader on e-commerce, and m-commerce is growing rapidly. Furthermore, Chinese consumers spend more than twice hours on social media to buy products than Europeans. Herborist digital strategy is more relevant and better fits Chinese consumers’ lifestyle whereas international brands like LaNeige still need to catch up and improve their digital strategy through the Chinese platforms Weibo, WeChat, TikTok etc.
Chinese companies have also a big advantage as they can follow more quickly changes of habits in the Chinese market and develop exclusive products that better suits Chinese needs. For example, Herborist can capitalize even more on their Chinese medicine expertise to suits Chinese rising consumption of cosmeceuticals or develop even more its men range which is definitely a growing trend.
Statista. Cosmetics market size in China from 2013 to 2018
Statista. Annual growth of cosmetics retail sales value by wholesale and retail companies in China from 2009 to 2017
Marketing To China. Cosmetics in China: Top Marketing Strategy
Marketing Interactive. LANEIGE reveals new face for brand as Song Hye Kyo moves to Sulwhasoo
HKTDC. Research, China’s Cosmetics Market
Marketing to China. Cosmetics in China: top marketing strategies to succeed in the beauty market: Korean cosmetics