L'Oreal is one of the best brands for marketing personal care in China. When it comes to beauty sales in China, brands’ digital marketing and commerce strategies are becoming just as important as their brick-and-mortar sales—but few have a solid grasp on how to best reach their Chinese customers online. According to digital marketing research firm L2’s recently released “2015 Digital IQ Index” for personal care in China, which ranks brands’ China digital prowess, only four brands can be described as “genius” for their digital strategies. Meanwhile, the majority of companies are “average,” “challenged,” or “feeble.” Online presence is key for beauty sales in China more than anywhere else in the world. According to Euromonitor, 15 percent of all beauty sales in China are online, a rate that is three times that of any other major market and growing rapidly. Digital sales are becoming especially big for the personal care sector as users make purchases of necessities on platforms such as Tmall, JD, and Yihaodian. In addition, the report notes that Chinese consumers are increasingly buying personal care goods off of Tmall Supermarket which is coming to replace trips to the the convenience store. For labels that outshone their peers digitally, beauty brands L’Oreal and Olay were listed as two out of L2’s top four personal care products in second and fourth place, respectively, alongside mass-market shampoo brands Head & Shoulders and Pantene. L’Oreal’s success came from several key areas. First of all, it works to engage customers on Tmall with a brand shop that “incentivizes consumers to review products and features loyalty program with point redemption,” according to the report. In addition, the brand’s Chinese site “allows consumers to access Tmall coupons, engage and share site content to earn points and prizes, apply for samples, and watch tutorials on product pages.” Meanwhile, its digital advertising activity “blends current campaign collateral with downstream links to product promotions.” Olay also rose through the rankings with its loyalty program that extends across the brand’s website, Tmall shop, and WeChat. The brand also seems to be winning against the gray market on Tmall, as it “controls two-thirds of organic results that display on the first page of returns for brand queries.” Its promotion with celebrity Lin Chiling was insanely popular, netting 5 million views on Youku. Unlike traditional luxury labels, Tmall sales are a major area of focus for beauty brands. While only a few fashion brands such as Burberry and Calvin Klein have opened official sites on Tmall, beauty is much more likely to embrace the platform due to its comparatively accessible brand identity. “Ninety-five percent of Personal Care brands have set up Tmall brand shops, with 14 percent opening shops within the last 18 months,” says the report. A total of 53 percent of all brands studied had a loyalty program exclusively through Tmall. The report finds that “over a third of Index Tmall brand shops feature information about product authenticity to encourage purchases via official distribution” while “content investments have also ramped up—39 percent of Tmall brand shops feature videos, and 18 percent dedicate a UGC section on the homepage or product detail pages.” It’s also important, however, for brands to work on omnichannel strategies, especially when it comes to employing mobile technology—42 percent of mobile internet users in China use QR codes to make purchases. The report finds that “two-thirds of Personal Care brands on Tmall promote QR codes to scan and access brand shops via Taobao or Tmall mobile apps, and more than half of brands list QR codes along with product images, providing a quick path to purchase.”
