What It Takes to Break Through in China
The challenges of entering the Chinese market and how brands should approach the idea of bringing their products abroad
From starting a hedge fund to owning the DTC beauty market in China is a career path you don’t hear too often. But that’s the road that Julian Reis has traveled and along the way he’s picked up some critical intel about the ecommerce world and Chinese trends that he shared on a recent episode of Up Next in Commerce.
“I moved to Shanghai almost four years ago and wanted to study how brands are being bought and sold in China,” Reis explained. “And then the light bulb went off and said to me, ‘This is an incredible opportunity. All these digital native brands that we see in the aisle of Sephora and Ulta and Mecca, why aren’t they available?’ So, I started the company and started hiring my first-year employees in a country that I had very little experience in. And I didn’t speak the local language. I could only speak pidgin Mandarin. And I said, ‘Well, this seems like a big enough challenge. Let’s go.’”
Reis got to work building SuperOrdinary as a laboratory to grow the next generation of innovative consumer brands including Drunk Elephant, The Ordinary, and Supergoop!, and is now helping partner brands access places previously inaccessible across the globe.
To help the clients succeed, Reis said that SuperOrdinary relies on a number of factors, including an employee base stationed in China, all of whom are tasked with understanding whether or not a U.S. brand can actually break through in the Chinese market.
“We have experts in each of the categories that we manage who really are our first port of call in terms of trying to see if there’s an understanding or a demand for this product,” Reis said. “Remember, all these brands have zero social awareness, and as the market’s got more and more expensive to launch a brand, it’s really important for us to make sure that if we get behind it, we’re going to be able to spend the marketing dollars to get the brand to where it needs to be for it to make sense financially.”
All of the intel about the culture and the consumers is critical data, which is at the heart of everything SuperOrdinary does.
“I think the hedge fund world really gave me an appreciation of data, and really thinking about data in a different way than I would normally do,” Reis said. “For us too, whether it’s analyzing the influences that we work with, or analyzing the livestreaming broadcast that we’ll do tonight with Austin Li, or analyzing LTV and CAC on the brands that we manage, it’s really become you’re heavily reliant on it because if you don’t rely on it, then you start to not make better decisions. And what we’ve done at SuperOrdinary is using that data that we give our brands, our partners, visibility into the consumer in China. And that gives us informed decisions on what products to make next… for us to be successful, they have to be successful in their product development. So, data has become a really big part of our business model.”
Reis also said that the way SuperOrdinary finds success is by focusing on platforms instead of websites.
“The world’s bifurcated between platforms and D2C websites,” he said. “And our view at SuperOrdinary is that platform is where the market’s headed to. The websites are where you discover your brands, you learn more about the content, you go to Instagram, you go to Sephora. But at the end of the day, where do you gravitate to? Well, where you’re buying your products. On Amazon, on Tmall, on Lazada. And this is where I think we really try to create this vision of where SuperOrdinary is headed. And it’s very important that our brands believe in this strategy too, because this is the direction we think beauty is headed in China.”
To hear more about what is happening in the Chinese market and how brands can win there, tune in to Up Next in Commerce.
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