The New Wave of Chinese Cosmetics Retailing: OMO Success and Unstaffed Stores
In recent years, many new brands have emerged in the fast-growing Chinese cosmetics market. In step with this flourishing of brands, is the appearance of one new Chinese retailer after another. Many of these new retailers were launched in 2020, in the midst of the pandemic.
The OMO Experience-Based Retailer “ONLY WRITE”
ONLY WRITE began operations on March 28, 2020. From its beginnings in Hangzhou, where its headquarters is located, it has now grown to 14 stores in locations such as Ningbo and Nanjing.
One of ONLY WRITE’s most prominent features is its OMO-based focus on the customer experience. Almost all of the products it sells are kept in a warehouse, and the products on display in stores are for customer trial use.
When customers find a product they want to buy, they scan the product’s QR code with their smartphone and pay on the spot. The payment process is completely cashless. The store’s front counter isn’t for handling payment, but instead for receiving products after they’ve been paid for.
Because of this design, ONLY WRITE has no beauty consultants. Its young customers, who are digital natives, generally dislike the face-to-face customer service provided by beauty consultants. Furthermore, in China, in some cases, KOLs are sometimes even more knowledgeable about products and can provide better usage recommendations than beauty consultants. ONLY WRITE uses technology, not beauty consultants, to guide customers in their purchasing decisions. It believes that its digitalized stores can guarantee a highly satisfying buying experience.
Founder and CEO Jianlei Zhou is advancing shopping automation in three stages. The first stage is using QR codes for payment, as described above. The second stage is the “smart shopping guide” concept. Traditionally, customers with questions about products would ask beauty consultants, but the digital “smart shopping guide” can answer all of their questions. The third stage is launching a dedicated app. This further improves efficiency and UX and provides the company with a wide range of data concerning customers, which it can then use to offer customers an even higher level of service.
ONLY WRITE carries over 3,000 SKUs of products from over 500 brands, both overseas brands and Chinese brands, large and small alike. In selecting these products, it uses indicators such as consumer feedback, sales volume, and brands. It leverages a big data platform that includes data on products that have generated buzz on different platforms and selects products by determining sales rankings in highly granular categories and identifying which products have achieved some level of recognition.
Investors have evaluated ONLY WRITE highly. On March 18, 2021, during angel rounds, ONLY WRITE secured several tens of thousands of yuan in funding from Vision Knight Capital, an investment fund created by David Wei, former CEO of Alibaba Group member Alibaba.com.
It plans to open 500 stores in three years, starting with 100 stores by the end of the year. This year, it also plans to open a 1,500 square meter flagship store.
Data-driven “Jupiter & Candy”
Jupiter & Candy has been opening new stores at a startling pace. Since opening its first store in Chongqing in September 2020, it has gone on to open over 40 more stores.
Founder Li Xing is focused on data-driven store operation and uses both big data and small data in different ways. In terms of big data, Jupiter & Candy uses Instagram business data to identify and create a list of the top 60 products that are generating buzz overseas. Purchasing personnel in individual stores track changes in data on various platforms and keep the list up to date. It uses this approach to replace 80 items per month, always providing customers with fresh products.
In terms of small data, each Jupiter & Candy store analyzes customer data for its own customers to supply products and services that are closely aligned with customer wants and needs. It has used this approach to develop a product lineup of roughly 300 brands and over 3,000 SKUs.
In addition to opening a flagship store in Shanghai, it also plans to open new stores primarily in small third-tier cities. Its goal is to open 100 directly managed stores by the end of the year.
“HAYDON” Luxury + Artistic Space Experience
Some existing retailers are also launching futuristic retail shop brands. Wow Colour (Guangdong) Science and Technology, which operates “WOW COLOUR,” has created a new subsidiary, “HAYDON" With its concept of “Art + Technology + Experience” and its space-themed store interiors, it is targeting Generation Z consumers.
The first HAYDON store opened in December 2020 in Wuhan City. There are now stores in the cities of Guangzhou and Shenzhen. During the extended holiday period in May 2021, the Shenzhen store was visited by as many as 15,000 people in a single day. Perhaps due to WOW COLOUR’s popularity, at the same time as the first store was being opened, it also procured funding through an angel round led by companies such as Tencent.
HAYDON carries over 350 brands and over 5,000 SKUs, but unlike other retailing newcomers, it primarily focuses on luxury brands. It uses big data to select products and its product lineups vary depending on store locations.
Talking to local media, CEO Judy said, “The places where customers buy products are not simply places to display products. They are also social spaces — places where consumers purchase products based on how space relates to them, their visual impact, the experiences they offer. In a sense, shopping is a holistic experience. Customers don’t just enjoy finding products, but also the entire situation.”
The retailer plans to open 25 stores by the end of the year and 100 stores by 2023. In the future, it is also looking at the possibility of opening stores overseas.
Text: Ching Li Tor
Original text (Japanese): Team Roboteer
