What:#
Not too long ago, the American prestige beauty brand Estée Lauder was still considered the choice of mature female consumers in China due to its signature anti-aging products, which have earned the nickname the “little brown bottle.” But its brand image has quietly shifted to become younger and fresher lately, gradually catching the attention of the millennial market.
The effort to rejuvenate this 71-year-old beauty label is paying off, as shown in the latest earnings report released on August 18 by its owner “The Estée Lauder Companies.” The Estée Lauder brand has recorded a whopping 40 percent growth in China in the fourth quarter of the 2017 fiscal year. The sales increase across all markets, in contrast, was five percent.
Fabrizio Freda, President and Chief Executive Officer of the group, believes that the momentum in key geographies like China will continue in fiscal 2018 and that market will become the pillar of the brand’s global growth.
High Points:#
Estée Lauder has been highly successful in revitalizing its brand image to become relevant and accessible to millennial consumers in China. Over the past year, it has appointed local celebrities including actress Yang Mi and singer Hua Chenyu, who have huge fan bases and influence among this demographic, to be its brand ambassadors.
This branding message is then strengthened with a number of well-crafted marketing campaigns that match the public image and personalities of its ambassadors.
"Estée Lauder understands the uniqueness of the Chinese market," Zhang Fei, a cosmetics analyst with Brand Finance, told Jing Daily. "Rather than adapting a Western strategy, it develops a program specifically for China."
"This makes the brand more relatable," she continued, "and therefore more likely to capture the attention of consumers."
How it works:#
Estée Lauder has shown a certain level of sophistication when it comes to how to work with key opinion leaders (KOLs) in China. It appointed Yang Mi as its brand ambassador in China and Asia Pacific markets in February this year, when a TV series, named "Eternal Love," starring Yang, went viral in the country, especially among the younger generations.
On February 20, the brand and the actress both announced this appointment on their official Weibo channels, attracting hundreds of comments. A follow-up campaign focused on the lipstick used by Yang's character in that show, which successfully enhanced the buzz around Estée Lauder's lipstick products. The brand even named a shade of lipstick after the actress, calling it the "Color of Yang Mi."
As the campaign got massive attention from audiences, Estée Lauder's use of its comprehensive online sales channels, including Tmall and WeChat, have allowed it to take advantage of that momentum and turn it into real sales.
It is worth noting that Estée Lauder's digital sophistication in China was not built in one day. It has reportedly devoted great effort in understanding the online landscape in China that is remarkably different from that of the West.
In the yearly ranking of beauty brands in China by data intelligence firm L2, which was published in January, Estée Lauder was recognized as the sole "genius" brand among the top ranked beauty labels. It achieved this designation for its comprehensive strategy encompassing e-commerce, social media, and mobile and digital marketing.
Tips:#
: A brand's ability to revitalize its image and keep sales healthy depends on its capacity to meet the expectations of young Chinese consumers.
Stay young#
: From influencer marketing to digital strategy, brands have to develop a solid understanding of local Chinese markets, rather than simply copying Western models.
Stay local#
: The online space continues to offer huge potential for sales growth for most brands in China and has gradually become a foundation for their business operations.