How Cosmetic Brands should use Digital in China in 2023?

The beauty industry in China keep growing in China, Chiense girls love taking care of their skin, their body and make up. On Red, (xiaohongshu) we have a monthly average views hitting 100 billion for cosmetics tutorials in 2023. CRAZY

You have to realized how big is this trend. both searches and live streaming views have increased over 50% yearly on short-video platform Douyin (TikTok).

Tmall, JD etc… the battle for Cosmetics is huge. And Top selling categories is BEAUTY.

Digiatl & ecommerce are the main sales channel in China. With its online retail sales surpassing in-store retail for the first time in 2021.

WeChat and the One to one Connexion

The peer-to-peer selling tend to be similr thing of building private traffic in Chinese market.
Private traffic is relative to the concept of public traffic, simply refers to the free, can be at any time, any frequency, direct access to the channels of users, such as we media, user groups, WeChat, that is, KOC (key opinion consumers) can be radiated to the circle layer.
Based on the above defination of private traffic in China, we can clearly seen that beauty KOCs have more influence on private traffic building and selling. At current stage of private traffic, the image of many KOLs (ey opinion leaders) have been separated from the masses, closer to the celebirties (stars).

On the one hand, this image is more conducive to the endorsement of the brand, but on the other hand, it is not down-to-earth enough and creates a certain separation from the users.

For commercial reasons, many users will resist this, and the young people nowadays do not blindly follow the recommendation of KOLs. However, KOC’s recommendation is different. KOC itself is general users of social medias, and it is easier to influence customers’ purchase through empathy.

WeChat the Social media for Loyatly program

WeChat as social platform, it has functions of traffic management, content marketing, social and advertising platform, payment together. And WeChat formed a its own ecological closed loop, most would choose to flow precipitation in WeChat ecology.
By 2022, WeChat will have 125 million monthly active users and 400 million mini programs alone. The volume of transactions made through mini programs will increase by 115% from $800 billion yuan in 2019, and that’s not even the amount of transactions made without miniprograms.
In terms of the convenience of management, enterprise WeChat is more suitable for buliding private traffic

Except WeChat, Taobao also has similar function: ‘Taobao Group Chat’.

In 2022, the active users of Taobao Group Chat reached 296,000, with 56 million monthly active consumers and 10 million daily active consumers. This data is naturally nothing compared to WeChat, which has a user base of over 1 billion, but it is also a huge amount of traffic that many platforms and merchants dream of.
Although, WeChat and Taobao has strong functions to help building private traffic loop, they still have limitations and restricitons (such as, WeChat has limited amount of friends, and other charge).
Therefore, brands own apps is the best channel to building private traffic.
But brands own apps still have limitations, such as high price and manpowers of building apps, for the brand that just starts, it is more burden.

You asked informaiton about especially for cosmetics industry, therefore LRB (little red book) plays an important role in building private traffic in China.

I will use a typical successful example of private traffic in cosmetics industry, Perfect Diary (Chinese emerging cosmetics brand. Perfect Diary was founded in 2016 and launched Tmall flagship store in 2017. In 2018, 11.11 shopping festival, the sales exceeded 100 million yuan in only 90 minutes. In 2019, the 618 event, it ranked the TOP1 of Tmall cosmetics within one hour).

Perfect diary the difference operation mode by the little red book KOL guide directly to enterprise WeChat and enterprise community rather than diverting to e-cpmmerce platform, the operating system directly saves e-commerce platform and the public’s attention for public competitiveness. For the enterprise/brand owner, the customer base with strong relationship chain is its private traffic. Little red book KOL has established a strong relationship with users through long-term and high-quality content output and sharing. KOL fans belong to their private traffic as far as popular people on the platform are concerned. Perfect Diary began their private traffic building since 2017.

Little Red Book and The KOL Effect

The purpose of the launch of Little Red Book KOL is to regularly developing star products and attract attention. In fact, the funciton of KOL is not a direct means of purchase conversion, but through the creation of brand awareness and purchase desire. Perfect Diary in the Little red book, mainly based on lower-price lipstick and eye shadow color is given priority to, through the reds KOL try a lot of color, draw activities, let the fans involved, used product users can expand the reputation effect, in their own circle of friends, Weibo private traffic.
A search for “Perfect Diary” on “Little Red Book” now has more than 100,000 notes. With so much data on posts and product recommendations, it’s hard not to get noticed. In KOL choice, the typical pyramid structure is used in the Perfect Diary’s operation, driven by a small amount of head KOLs, but the main volume from the KOCs, users search relevant keywords, as long as can be seen immediately perfect diary products recommended, released a lot of followers KOL notes about perfect diary products will be pushed to the message list.

The methods how KOL guide consumers to make purchase decisions.

1. KOLs personal accounts directly communicate with consumers.
   KOL sends WeChat personal accounts to consuemrs through in-advanced communication with the Perfect Diary. Perfect Diary has a large number of personal WeChat account, which can be flexibly switched through the two-dimensional code on the page, thus building a flow pool of hundreds of thousands of WeChat friends. At the same time, automatic reply is used to improve operational efficiency.
2. KOLs official accounts guide consumers to KOLs personal accounts
   Guide consumers to join WeChat group through private chat, and constantly attract users’ attention with high-quality content. Subsequently, through the creation of KOC circle of friends, can effectively marketing the user’s purchase decision. In the end, KOC promoted Perfect Diary’s products in the WeChat group chat and circle of friends, leads the final purchase behaviour. For example, product sharing and introduction: to share and release products in different forms in the community, such as long picture of products, video, trial actual picture, etc., and at the same time publish the purchase link of the corresponding products, so that users can place orders in time after knowing about the products.

The operation of this kind of private traffic has a longer life cycle than most of the purchasing modes of directly guide to e-commerce platforms, and the stickability between brands and users will be stronger. The operation of private traffic (WeChat ecology, small program mall) will be used to enhance the added value of products, and the operation efficiency will be improved by means of manual + automation.

Opportunities for Beauty Brands

1. The stratefy of Little Red Book KOL can play a positive role in product sales, especially in developing star products. At this point, the platform benefits has not completely disappeared, so we can actively try.
2. Cost-effective and lower-price Kols and Kocs is the primary choices for building private traffics.
3. Blindly attracting new customers can not bring sustainable growth power, through reasonable means to retain the existed users can obtain long-term profits. Therefore, using WeChat to build their own private traffic may be a cost-effective way.

Challenges

1. Inconvenient to manage
   Most businesses take the group chat or public account on WeChat as the private traffic pool, and when the users in the private traffic pool develop to a certain extent, it may be more difficult to manage, how to active the atmosphere of users, reduce the user churn rate and other things are some more difficult to do well.
2. Private traffic is a set of system operation program, multi-directional skill requirements
   Community management, content production, event planning, micro class, online education, e-commerce platform, distribution channels, etc
3. Private traffic needs a lot of content materials support.
4. Private traffic requires multi-platform cooperative operation

How do you see this evolving outside of China, especially in the beauty market? For example, L’Oreal has invested in community platform Replika. Will we see more developments like this and things like Group selling which is more developed in China, in Western markets?

As I mentioned above about the platforms for public traffic development, brands own apps are the ‘pure private traffic development’ channels. There are some cosmetics brands in China are developing their own apps to maintain existed consumers. So, developing brands own apps can be am opportunity in China (but brands need to have enough budget).

Baidu to Check Brands Reputation

Firstly, it is important to understand that SEO in China is different compared to Western countries. As opposed to Europe or U.S.A, Baidu is the largest search engine in China and therefore the SEO rules are also distinct.

SEO is a vital tool to increase the Reputation of cosmetic brands.

SEO helps companies to get more exposure and improve their position on search engines. During their online searches, about 75 percent of Chinese only just visit the websites of the first Baidu page. That means if your website is not well ranked on Baidu, your chance to attract Chinese consumers will be drastically reduced.

In China, many cosmetic brands are missing the benefits of attracting potential consumers who search for beauty products online. About 6% of cosmetic brands are in the first search position on Baidu when their name is searched via mobile devices while 51% of them are in the first search position when their name is searched via desktop devices, according to a report by L2 Think Tank, a digital luxury marketing research firm.

SEO can be done on RED, on Douyin

Why SEO is very important for cosmetic brands?

The cosmetics industry in China has been growing at a fast pace becoming one of the most promising sectors of business in the Middle Empire. the value of the transactions of cosmetic products reached about USD54.32 billion and in 2017 it is expected to increase the sales volume up to USD113.9 billion. via twitter

Due to this encouraging data, many companies have decided to expand their business to China and take advantage of this profitable market. Nowadays, the cosmetics sector in China is a very competitive market where a huge number of companies are fighting to attract Chinese consumers.

This is where companies have to develop marketing strategies to be the leader in the Chinese cosmetic market and SEO plays an important role in this undertaking.

Thanks to SEO, cosmetic brands have the opportunity to improve their website visibility on Chinese search engines and therefore reach a huge number of Chinese shoppers. Also through SEO strategies, companies will improve the brand awareness among Chinese consumers and as a result, they will increase their sales. However cosmetic companies should not solely focus their SEO efforts on their websites.

SEarch Strategy everywhere in a good digital marketing strategy

The reality is that Chinese consumers before making any purchase decision, search for information about products and brands on social media platforms as well. They trust much more in comments and information they find on these social networks than in information directly provided by the brand.

Cosmetic companies have to increase their presence on Chinese social media platforms through the creation of official accounts to provide content about the beauty world to their followers besides information about the brand and products. Also, they must be present on beauty forums by providing beauty tips and include videos and photos in order to engage Chinese consumers.

For instance, Lancome launched its own forum called Rose Beauty where the company provides information about the brand, the products, and events and also gives beauty tips to its followers. Rose Beauty has over 4 million users becoming one of the largest online communities in the cosmetics field in China.

It is very interesting to beauty companies incorporate a section of Q&A where consumers have the chance to ask questions about the brand products (benefits, ingredients, how to apply the product…) or questions beauty-related that will be answered by the brand.

Therefore, cosmetic companies must also target their SEO strategies to these sites in order to improve their brand awareness and brand image, to ultimately reach more customers

Improved visibility means more sales

Online visibility is strongly correlated with brand sales and this is the main reason why beauty companies must have an SEO strategy in China.

ECOMMERCE SALES = TRAFFIC * CONVERSION

We provide SEO services to give you the best chances of standing out and increasing your brand awareness and image in China. Should you have any project you wish to conduct in China regarding cosmetics and SEO, simply contact us!

To go further:

• China online cosmetics market overview
• What our SEO Agency can do for you?
• How to use SEO in China?
• Cosmeticschinaagency

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