Inside China’s Web3 beauty revolution

Late last month, consultant Antoaneta Becker received a box of beauty products from a friend who works in public relations. But inside weren’t your typical cosmetics. Instead, the package contained a Near Field Communication-connected lipstick that, when scanned, connected its wearer to an exclusive WeChat mini-program. On the channel, owners can follow the product’s development, browse limited editions, upload their own bespoke digital content, and even record personalized voice messages. “It was like a Chinese blind box moment. I wanted to uncover the mystery inside,” Becker tells Jing Daily. The lipstick was from YiZhiJi by Totemist, a French-Chinese apothecary-meets-tech lab that specializes in Web3-infused beauty products. Founded in 2021 by Laurent Taisne, a former C-level executive at L'Oréal, the NFC-embedded lipstick is the brand’s debut product. “At Totemist, we’re merging the best of a lipstick, such as design, durability, and refillability, with Web3 technology to give the power to users to transform their objects into unique ones, personalized by themselves,” Taisne tells Jing Daily. “We want to make meaningful objects.” Flourishing ecosystem The lip stain is also the first-of-its-kind to hit the beauty arena. Though a pioneer in the burgeoning Web3 beauty space, Totemist isn’t a lone rider – the brand joins a growing crop of tech-focused innovators shaking up the global beauty industry. The Web3 beauty realm is growing at a clip in the West, with the likes of community-focused startup Kiki World (which raised $7 million in a funding round earlier this month) and creative agency Cult, the brains behind Metaverse Beauty Week, leading the charge. “The rise in startups signals a transformative shift towards a new beauty ecosystem,” says Cult’s creative brand manager, Daisy Haywood. “This shift signifies a move towards a more transparent and inclusive beauty space, offering exciting opportunities for brands, creators and consumers alike.” Can traditionalists keep up? However, the main pull of Totemist’s lipstick for Becker wasn’t so much the futuristic element, but the fact that it was created by a Chinese brand. “I wanted to experience the Chinese take on Web3 beauty,” she says. China’s dynamic beauty market – an arena that totaled $67.18 billion (480 billion RMB) in 2023 and has been growing at an annual rate of 5 percent – is banking on innovation as its USP. Locally and globally, the C-beauty sector has made impressive strides with its embracement of digital culture and trends. Industry trailblazers like Totemist are nipping at the heels of China’s industry old-schoolers as they vie for a slice of the market share. In response, long-established brands like Shiseido (China accounts for about 25 percent of the label’s sales) are drawing on similar technologies to keep up. Shiseido’s digital transformation has seen the company invest heavily in metaverse-related experiences over the past few years, from creating its own virtual influencer Shi, to launching the world’s first artificial intelligence and non-fungible-token-powered beauty community. Competitor YSL similarly deployed machine learning as part of its in-store scent station, which used an electroencephalogram-based headset and AI-generated algorithms to give personalized fragrance advice to consumers. Maybelline, whose popularity across China dwindled during the pandemic, opened up its own metaverse space on Tmall in 2022 to combat its underperforming brick-and-mortar counters across the mainland. The participation of conglomerates evinces wider adjustments happening across the mainland’s beauty sector as tech becomes inextricably linked to the cosmetics market, says director of product and innovation at Gusto Collective Aslada Gu. “Although Web3 has not yet become widely adopted in the everyday lives of ordinary consumers,” Gu says, “we can consider these brands as accumulating their digital assets and laying the groundwork for the future.” Spying demand The problem is that the market is still nascent, and success hinges on whether consumers – both in China and worldwide – are ready for beauty’s tech revolution. Consultant Becker thinks that beauty’s shake-up comes at a time when brands are eager to engage the younger generation, which involves getting to grips with their digital-native language. That means learning tech such as AI, metaverse destinations, and augmented and virtual reality, all of which are becoming common vernacular among Gen Z and Gen Alpha. “The Chinese market and its consumers are super tech savvy, fast and very pragmatic,” Totemist’s Taisne says. Experts in the conventional field also think it’s time for brands to catch up with consumer expectations instead of relying on outdated marketing tactics. Chinese consumers are “one of the most tech-savvy consumers in the world” and expect their beauty purchases to be just as convenient and interesting, Shiseido’s Zhou told Jing Daily last year. Smoke and mirrors? But the novelty of incorporating buzzy tech isn’t an excuse for brands to relax their efforts elsewhere. Product quality should remain a priority, says Gu. “Regardless of whether or not it incorporates Web3 tech, the brand’s primary focus should still be ensuring that the product itself meets consumers’ needs and expectations for beauty or makeup purposes,” Gu adds. For instance, the use of AI to accurately determine a wearer's correct shade becomes redundant if the product itself fails to deliver on quality. Gu emphasizes that the “application of new tech should be seen as an additional benefit” that leverages the existing consumer experience and the product’s emotional value. Then there’s the technology itself, which also requires flawless execution to make sure the experience is an additive, rather than an inconvenience. Becker describes Totemist’s NFC smart-chips as “super easy” to navigate, but there is still room for improvement. “The lipstick itself was a bit underwhelming,” she says. Though the domain is still small across China, excitement is bubbling over how beauty’s emerging Web3 ecosystem can energize the industry. The challenge brands face now is elevating the tech’s reputation from gimmick, to beauty’s next major must-have.

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Inside China’s Web3 beauty revolution