Japanese Cosmetic Brands Gain Prominence due to Strong Sales during China’s 618 Shopping Festival

618 is a major sales event in China, second only to Double Eleven. Roughly 10% of sales during this event are live commerce sales. In the cosmetics category, Japanese brands such as Shiseido and Kanebo have grown in prominence. Let’s look at some of the highlights of 618.

During this year’s 618 event (held from June 1 to June 18, 2021), gross merchandise value (GMV) on the event’s main platform grew by 26.5% compared to the previous year, to 578.5 billion yuan (US$89.5 billion). Of this, 64.5 billion yuan (US$9.9 billion) came from live commerce.

Advances being made by Shiseido and other Japanese brands

According to Chinese research firm Syntun Ltd., cosmetics (makeup and skincare) was the fourth biggest-selling category in 618, following appliances, smartphones, and apparel/accessories. Sales of cosmetics rose 17.8% to 51.2 billion yuan (US$7.9 billion). Of this amount, skin care products accounted for 37.9 billion yuan (US$5.8 billion) and makeup and fragrances accounted for 13.2 billion yuan (US$2.1 billion).

The top five sellers in the skincare cosmetics category were L’Oréal, Estée Lauder, Lancôme, OLAY, and SK-II. In the makeup and fragrance category, they were Perfect Diary, Florasis, Yves Saint Laurent, 3CE, and Dior.

For Japanese brands, Shiseido was the 5th best-selling brand in Tmall’s skincare category. In the men’s skincare category, UNO came in 7th and Mentholatum in 10th place. In the beauty device category, Ya-man was the 2nd biggest seller, and Dr. Arrivo was ranked 6th.

Within the Japanese brands, Shiseido performed particularly well, with Tmall sales of over 1.1 billion yuan (US$170 million), a 60% increase over last year. Shiseido, Clé de Peau Beauté, Elixir, and Anessa all sold over one million yuan (US$15 million). 10 brands, including these, took 1st place in their categories. Brands such as MAQuillAGE, the number one seller in the makeup base category, also performed well in TmallGlobal, a cross-border EC marketplace.

One of the reasons for Shiseido’s success was its enhancement of the live commerce efforts. During this year’s 618, a growing number of brands did not rely on KOLs alone but also performed their own live commerce. Shiseido was no exception. For several consecutive days, at Tmall’s flagship store, it conducted live commerce starting in the morning and continuing for over a dozen hours. On June 1, it sold out its entire inventory of 115,000 bottles of Suncare The Perfect Protector in just 3 minutes. Its Vital Perfection sets sold out in 15 minutes.

Kanebo Beauty Brands also performed strongly. Sales of over one million freeplus products put it in 1st place in Tmall’s cleansing category. Kanebo Beauty Brands’ GMV exceeded 1 million yuan (US$15 million).

In recent years, freeplus has established a greater presence in the Chinese market. One factor is the growing consumer need for skincare products for sensitive skin, but another reason for this success is that since 2015 it has outsourced sales to Lily & Beauty, a major local online cosmetics retailer. Lily & Beauty is a publicly-traded company listed on the Shanghai Stock Exchange, and a powerful official sales distributor for overseas brands. It also operates Tmall flagship stores for other Kanebo cosmetic brands such as ALLIE, and actively engages in live commerce.

ALLIE’s Tmall flagship store’s advance sales for the roughly two-week period starting on May 24 were 142% higher than the same period a year ago. For JD.com, as well, first-day sales were 587% higher than average one-day sales for May. Sales at the KATE’s Tmall flagship store during the 618 period rose 13% year-on-year to over 10 million yuan (US$1.5 million). It came in second place in review rankings for eyebrow powder, with almost 76,000 positive reviews.

In recent years, China has seen a large number of tie-up product releases involving other intellectual properties (IP). For 618, Lancôme sold a limited-edition Tonique Confort with a Hello Kitty cap. 15,000 of this product were sold using a WeChat Mini-Program. GMV increased 97% year-on-year, and total live commerce sales exceeded 10 million yuan (US $1.5 million). Advance sales on JD.com on May 24, the first day of advance sales, were 186% higher than those of the previous year. The buzz created by the Hello Kitty tie-up contributed to this success to some degree. Hello Kitty is very popular in China, and the official Hello Kitty Weibo account has over 640,000 followers.

Chinese brand colorkey also sold an exclusive Hello Kitty tie-up lip gloss. Advance sales began on May 24, and within an hour over 300,000 of the products had been sold. By June 1, the number sold exceeded 750,000. Tie-up products featuring Doraemon were also sold by colorkey, an example of its marketing targeting Generation Z, which is fond of products featuring famous characters.

Douyin launches live commerce functions for the first time in 618

Another development that generated buzz was the fact that Douyin, the Chinese version of TikTok, took part in 618 for the first time. Douyin has built-in live commerce functionality, and a total of 28,520 hours of live commerce were broadcast over the platform between May 25 and June 18.

According to the Chinese beauty site JUMEILI.CN, Douyin did roughly 35.9 billion yuan (US$5.55 billion) in beauty-related product sales during 618. Together with Douyin, the site determined the top 30 best-selling cosmetic brands. While most were Chinese brands, Shiseido was one of the top 30. The sales volume for all brands within the Shiseido Group was over 87,000 products, and total sales via Douyin exceeded 17 million yen (US$2.6 million).

Alibaba emphasized its CO2 emissions reductions during the sale

During this year’s 618, in addition to results such as sales amounts, Alibaba heavily emphasized its CO2 emissions reductions. According to Tian Xia Wang Shang, CO2 emissions by Tmall during the 618 period were 17.6% lower than last year. In addition to optimizing its algorithms, it is also using clean energy such as wind power and solar energy in its data centers, and it is reducing emissions related to delivery by increasing its use of delivery lockers in urban areas and housing complexes.

The fact that Chinese industry leader Alibaba is emphasizing its CO2 emissions reductions is something worth noting. The Chinese government, like the rest of the world, is steering the country towards decarbonization. As competition between EC platforms intensifies, environmental management is expected to become an important concept in China. Calls for eco-friendly operation may extend beyond platforms to brands as well, with demands for measures such as the use of more environmentally-friendly packaging.

Text: Ching Li Tor
Original text (Japanese): Team Roboteer