E-commerce, and increasingly m-commerce, are important tools for China’s beauty industry. Research from Early Data
, Mintel’s joint venture partner specialising in e-commerce business intelligence, shows that the sales value of cosmetics sold on Tmall grew by an estimated 29% in June 2018 from the year prior.
Meanwhile, WeChat for Business, also known as WeiShang (微商), is growing quickly in China thanks to the high penetration rate and popularity of Chinese social media network app WeChat.
Most importantly, China’s deeply-rooted ‘human relationship culture’ has made running businesses on social networks much easier.
Indeed, Mintel research reveals that a third of female facial mask users have purchased a facial mask from WeChat.
Further, the Internet Society of China (ISC) found that the overall transaction value of WeiShang was estimated to have reached a grand total of USD$108 billion in 2017, with a year-on-year growth rate of 89%.
WeiShang is a channel that traditional and emerging beauty brands should leverage. In addition to embracing WeiShang, brands should also give full attention to the platform as a communication channel to interact and engage with consumers. Beauty brands, for instance, can do so by creating content centering around skincare or makeup tips.
Trust plays a key role in the development of WeiShang
The fast development of WeiShang has led to several questions and doubts about the quality of unknown brands found on the platform. According to a report by ISC, over half of consumers complained about ‘exaggerated effects’ and two in five about the ‘poor quality’ of products sold online.
These problems are even more prominent on WeiShang especially with the growth of controversial, pyramid selling schemes that focus on multi-layer selling sans the actual sale to final users. What’s more, China Central TV reported in 2015 that high levels of glucocorticoids were found in facial masks owned by brands founded on the WeChat retail channel, severely affecting the WeiShang business overall.
That being said, new regulations were introduced in 2017 which gradually allowed WeiShang to get back on track.
Today, more and more mainstream local beauty brands, the likes of Kan’s, One Leaf and Pechoin, have identified the importance of this tool and officially entered the channel, improving WeiShang’s image.
With the entry of mainstream brands onto the channel, those that found their beginnings on WeChat need to be more active in solving whatever trust issues still lingering among Chinese consumers. There needs to be transparency when it comes to how a product is manufactured, as well as its ingredients, for instance. Additionally, brands need to adopt more flexible retailing formats such as vending machines or pop-up stores to create physical consumer touchpoints—amping up the overall brand experience
, and subsequently, building up the trust factor between brand and consumer.