Future50 insights: C-beauty’s watershed moment, lessons in localization

This story features insights from a panel talk held at the Future50 conference hosted by BeautyMatter featuring: Charles Denton, chairman of Erno Laszlo; Gabby Chen, president of global expansion at Florasis; and Charlie Gu, head of Jing Intelligence at Jing Daily. With travel rebounding and innovation driving change, this market remains a significant force, despite economic headwinds. “China's market is always in a state of change,” said Charles Denton, reflecting on his experience building the Erno Laszlo brand over the past decade. “Six months in China is equivalent to three years in America, in terms of the speed of change.” Initially dominated by Western brands and department store retail, the market has shifted towards e-commerce and social commerce platforms like Tmall and Douyin. Denton highlighted the growing influence of local brands and changing consumer behavior, emphasizing the importance of regulatory compliance and the challenge of maintaining profitability. “Consumers have become more independent in their decision-making,” Denton added. “Local brands are moving fast and gaining market share. The economic backdrop and regulatory landscape have also changed, making it a challenging environment for brands to build a business.” Charlie Gu from Jing Daily pointed to a significant shift in consumer motivations, particularly among independent professional women. “There’s a move from pleasing others to self-indulgence,” Gu said, noting the rising popularity of fragrances and body care products that cater to personal wellness. Concepts like the “new five senses” in China – originality, presence, atmosphere, sociability, and relaxation – are driving strong consumer interest and brand loyalty. C-beauty’s rise The panelists also discussed the rapid rise of Chinese beauty brands (C-beauty). Gabby Chen from Florasis attributed the brand’s success to its quintessential C-beauty makeup approach. “Florasis leverages Chinese elements, heritage, and traditional aesthetics to create products that resonate with local consumers,” Chen said. This strategy has paid off handsomely for C-beauty brands like Florasis. “We started in 2017 and within three to four years reached annual sales of $850 million,” she said. Chen emphasized the importance of cultural identity, citing the brand’s setting powder, designed for Asian skin tones and climates, which sells 10,000 units daily. C-beauty brands have advantages, particularly in data-driven strategies and speed to market, according to Denton. “Local brands have learned from Western brands and are now using data to their advantage,” he said. “Their understanding of the consumer and ability to quickly respond to trends is remarkable.” As C-beauty brands look to expand globally, Gu pointed to their uniqueness and fundamentals. “Chinese brands have a rich history and culture to draw from, combined with innovation and a strong supply chain,” he said. Denton added the influence of Chinese consumers globally to the list of attributes that augur well for brands entering new markets. Unlocking growth for Western brands To stay competitive, Western brands must understand Chinese consumers’ unique lifestyles and beauty routines. “Brands need to be smarter and have a strong appeal, especially with a science background,” Gu said. He noted the success of brands that cater to post-cosmetic surgery care needs, showing a deep understanding of consumer needs. “Western brands are continuing to unlock growth in China,” he added. “But we have reached a watershed moment where the playing field (for both Global and Chinese brands) has leveled.” Despite e-commerce’s rapid rise to dominance, physical retail stores remain crucial for brand engagement in China, especially higher up the consumer chain. “Retail stores create a connection and allow consumers to experience the brand,” said Chen. Florasis’ flagship store in Hangzhou offers an immersive experience, showcasing the brand’s heritage and creating a cultural connection with consumers. As for niche fragrance brands looking to enter the China market, Chen recommends finding the right retail space to tell the brand story, and engaging with consumers through events, social media, and in-store experiences to reinforce that narrative. “Personalized experiences and direct interactions can make consumers feel more connected to the brand. Be patient and focus on storytelling,” she said. Denton added that understanding traction with Chinese consumers outside of China can indicate potential market performance. The panel concluded with a discussion on the symbiosis between physical retail and digital strategies. “Each platform has a different role to play,” said Denton. “Physical stores provide an intimate experience, while online platforms offer entertainment and information.” The conversation underscored the importance of adapting the rapid changes taking place in China’s beauty market, leveraging cultural identity, and understanding consumer behavior to achieve success. Brands that can innovate and connect with consumers on a deeper level stand the best chance of thriving. All panelists agreed that C-beauty brands will continue to grow in their global influence in the years ahead. The question is, how fast?

Future50 insights: C-beauty’s watershed moment, lessons in localization

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Published July 19, 2024

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Future50 insights: C-beauty’s watershed moment, lessons in localization