What with China’s slowing economy, reduced tourist spending, and the government’s crackdown on daigou, Japan’s luxury retailers could have had a better start to the new year. And while these problems might stick around for some time, one way for retailers to combat them might be to continually look out for new growth opportunities. Beauty, for example, has been traditionally known to be a positive sector during periods of crisis — more resilient, and perhaps even immune, to economic swings than the luxury market.
A new report published by the digital intelligence company Kantar China in early March, shows Chinese high-end customers’ continued interest in buying beauty products when traveling in Japan. The report also provides an insightful read into some of the key shopping preferences of China’s female beauty consumers.
To begin with, a bit of uplifting news for many Japanese luxury department stores and shopping malls: Chinese consumers enjoy buying beauty products at them in order to gain an authentic, local shopping experience. The report also adds that 44 percent of surveyed respondents chose a department store or a shopping mall to be their first shopping channel, compared to 22 percent for duty-free stores, 13 percent for airports, 11 percent for outlet malls, and 10 percent for pharmacies.
According to the report, the following five aspects are important for China’s female shoppers when deciding where to shop: high-quality service, discounted prices, a full range of products, limited editions, and free samples. This might help explain why department stores and shopping malls get the highest votes.
The report also ranked Chinese consumers’ favorite beauty brands, which not only included brands from Japan, but also from many top international players as well. According to Kantar, the Japanese luxury beauty brands,Shiseido and Pola were the two most popular for Chinese female shoppers. The American beauty giant Estée Lauder occupies the third position, closely followed by two more Japanese labels DHC and SK-II coming in fourth and fifth, while the French beauty brand Lancôme, the Korean premium brand Sulwhasoo, and the LVMH-owned Guerlain ranked sixth, seventh, and eighth, respectively. Rounding out the bottom were the luxury line Clé de Peau Beauté and skincare label Cruel, also both from Japan, at ninth and tenth.
In addition, the report interestingly noted that Chinese female beauty buyers like to nickname their favorite products online. For example, they call Shiseido’s Power Infusing Concentrate ($70-130) “red kidney (红腰子),” SK-II Facial Treatment Clear Lotion ($76) “immortal water (神仙水),” and Cosme Decorte’s Herbal Revitalizing Lotion ($95) “Basil Water.” These nicknames, if used properly, could become an effective channel for brands to engage with consumers from China, Kantar suggested.
To date, China’s appetite for beauty has shown no sign of slowing down despite continued economic uncertainties, which is great news for this market segment. And compared to luxury goods, beauty products, given their tiny size, are also easier for consumers to keep in their suitcases to avoid being searched by customs agents upon returning home, which is also another plus. As the report noted, understanding where and how Chinese beauty consumers shop should be a crucial part of any Japanese retailers approach to weathering these uncertain times.