Tmall Global dominates is now the key battleground for P&G, Shiseido, and other global brands in China
Despite the COVID-19 pandemic, online shopping in China has soared with all major e-commerce platforms are seeing healthy sales. On Alibaba Group’s cross-border e-commerce platform Tmall Global, beauty-related sales are, particularly on the increase.
In recent years, cross-border e-commerce sites in China have been flourishing. According to Chinese tech research site iiMedia, retail sales of imports and exports by cross-border e-commerce sites in 2019 totaled 186.2 billion yuan (US$26.76 billion), a 38.3% jump from the previous year. Of that figure, imports made up 91.7 billion yuan (US$13.18 billion). Market share in the third quarter of 2019 saw Alibaba Group taking an overwhelming lead of 52.1%, followed by JD.com’s Haidun Quanqiu (now Jingdong International) with 15.1%, women’s e-commerce vip’s Weipin International with 10.5%, and social media-style e-commerce app RED with 4.8%. These four companies now make up over 80% of the market.
The live stream that emptied a warehouse within 3 hours
Beauty items seem to be at home on Tmall Global, which was launched in February 2014. As of the third quarter of 2019, 58.6% of Tmall Global users were female. Some 43.8% of users were aged 24 and under with 33.7% aged between 25 and 30 — making around 80% of the site’s user base aged 30 and under. A great many beauty-related products are also available, with those by retailors like Sephora and other global brands.
Higher consumption via e-commerce, a result of the pandemic, has benefited Tmall Global. Between January and March, 200,000 new products were launched on the site and over four times the number of overseas brands made their debut compared to the same period last year.
Tmall Global is also strengthening its offensive in line with the times. In March, it launched its Business Incubation Center. By teaching strategies for China-oriented consumer communication, product categories, and marketing, the initiative helps foreign brands enter the Chinese market. It has helped new store-openers reach sales of a million yuan (US$143,600) within just 90 days.
Tmall Global also announced its incubation initiative, Newly Made Imported Cosmetics Plan, on April 24. The initiative aims to attract up to 800 overseas brands within a year and help over 50 new brands attain 10 million yuan (US$1.436 million) in annual sales.
On April 27, Tmall Global also set up a Live Streaming Bonded Warehouse Base in Hangzhou. When users watch the live stream and buy products over the platform, their purchases are immediately sent through customs and arrive at their door the next day.
This approach saw success during Black Friday in November 2019, when Tmall Global did a live stream at the warehouse base with three KOLs (key opinion leaders). Over 300,000 items were sold — including 18,000 “ellips” treatments and 22,000 bird’s nest products from Thai brand Ninest — and the entire warehouse was emptied within three hours. Tmall Global now plans to hold live streams from the same base four to six times a month.
Global beauty brands hopping on Tmall Global
Various global brands are now focused on expanding on Tmall Global. L’Oréal Group is actively promoting its Urban Decay flagship store, which opened on March 20. In April, the brand named popular Hong Kong singer G.E.M. as its new face. During this year’s 618 sales event, Urban Decay took in over a million yuan in sales (US$143,600) within the first 30 minutes.
Then on July 20, Estée Lauder tied up with Tmall Global to incubate new brands entering the Chinese market. It officially opened the flagship store of Too Faced, a brand that targets Generation Z. The store offers 38 items, including some appearing for the first time in the Asia-Pacific region.
P&G Ventures also launched its portable beauty device Opté Precision Skincare System, which it showed off at CES 2019, in China instead of elsewhere. About a month before the product was released in late July, Procter & Gamble’s startup studio began accepting preorders limited to 3,000 units from the Opté overseas flagship store on Tmall Global.
As for Japanese brands, Shiseido has opened a Maquillage flagship store on Tmall Global. Its Dramatic Skin Sensor Base EX is a hit, recently selling more than 7,000 units within a month. During the 618 event, Maquillage reportedly generated over 5 million yuan (US$717,587) in sales over three days.
Independent and newly emerging brands are launching on Tmall Global one after the other too. This includes American sunscreen brand Supergoop, Spanish skincare brand SingulaDerm, and South Korea’s Chong Kun Dang Healthcare, among many others. The globally popular Huda Beauty, which is valued at over US$1.2 billion, picked Tmall Global to make its foray into China.
Then there is Sephora, which opened its Tmall Global flagship store on May 20 and offers more than 600 items from 25 brands. Nine of these brands — including Natasha Denona’s eponymous makeup brand and Sunday Riley from the US — are appearing for the first time on the platform.
Tmall Global says it will partner internationally influential celebrities and influencers who are able to drive import consumption and communicate in new ways, from live streaming to short videos, that bring new brands to the fore. While the impact of COVID-19 remains challenging and governments continue to restrict people’s movements, global brands are increasingly likely to rely on Tmall Global.
Text: Denyse Yeo
Original text (Japanese): Team Roboteer
