Experts Discuss Cross-Border E-Commerce, Consumer Sentiment And The Chinese Market During An Evening Of Global Beauty Insights
“More women look to their own peer group for influence than they do to YouTubers or bloggers,” she said. “Unfortunately, the market is at such saturation with influencers that you don’t see it as authentic. I personally believe now that peer-to-peer — what your friends do and also what your experts, like your glam squad [do] — [has] more of a weighted opinion than bloggers and influencers.”
Reid offered her insights last week in New York at a panel discussion entitled “An Evening of Global Beauty Insights” led by Feelunique CEO Joel Palix. Joining Reid on the panel, which covered the changing roles of influencers, European and Chinese beauty markets and cross-border e-commerce, were The Beautyst founder Geraldine Cohen, Erno Laszlo CEO Charles Denton and Rob Robertson, CEO of logistics firm Star Asia.
Reid went on to fill the audience in on the beauty segment throughout England. “In the U.K., it’s not just about London,” she asserted. “The north of England is so heavily obsessed with beauty: Newcastle, Manchester, Liverpool especially. And with e-commerce [these consumers] don’t have to go all the way to London to get the cool brands. A lot of people disregard these smaller places, but actually they’re driving beauty in a massive way.”
The conversation next traveled to France. Cohen, whose online beauty community-cum-marketplace The Beautyst was acquired by Feelunique in April, emphasized millennials have upended the beauty industry in the country. “I started in the beauty space because I thought that the traditional beauty market in France was totally disconnected from the consumer, and I come from a family of beauty entrepreneurs,” said Cohen, whose stepmother Terry de Gunzburg headed Yves Saint Laurent Beauté for 20 years before launching the brand By Terry. “In France they’re so focused on, ‘We invented the beauty market. We have L’Oréal. We have LVMH. We invented Sephora. Nobody thought, OK, but what’s happening next?” she said. “Seeing the way that [French companies] were marketing their product was not talking to me, and I realized that it was my whole generation. When you come to selling to the millennial generation, it’s a totally different thing.”
As The Beautyst gained steam, Cohen realized the site’s community of 1,500 microinfluencers were overwhelmingly talking about U.S. brands. “They don’t want to hear about L’Oréal Paris. They don’t want to hear about Dior. They want to hear about Anastasia Beverly Hills, NYX, they want to hear about Morphe Brushes, so we started launching those brands, and became known in the French market for launching indie brands,” she said.
At The Beautyst, Cohen had a firsthand view of the French influencer ecosystem, which she pronounces less developed than its U.S. counterpart. “It’s cheaper to work with influencers in Europe, but it’s more complicated because you’re not dealing with professionals,” she said. “Here [in the U.S.], they think business. They feel like it’s their job. In France, it’s their hobby still.”
The advantage of France’s smaller and less sophisticated influencer pool is high engagement. Cohen singled out Sananas, a French influencer with 1.6 million followers who regularly garners six digits-worth of likes and comments on her Instagram posts. “Her competition is probably five girls. She is the top level of what you get in France. Her engagement is so big,” she declared. “[In the U.S.], there’s a lot of noise around influencers. A lot of people following Jaclyn Hill, for instance, are just looking at her, but they don’t really care about product, it’s just entertainment. Whereas in France, it’s really about the product.”
From France, the discussion turned to China. Denton, former CEO of Molton Brown, is humbled by his experience in the nation. “One thing I’ve learned about China is that I don’t know anything about China,” he admitted. “It’s changing so very fast. If you really want to see what America or Europe is going to look like in the future, you go to China. They have no barriers to thinking, no preconceived ideas, so everything is just this wonderful world of discovery.”
Many beauty companies eager to tap into China’s multi-billion dollar beauty market retreat before even breaking into the country, dismayed by a registration process that Denton estimated can take up to 18 months and an animal-testing requirement for beauty brands vying for brick-and-mortar distribution.
Denton, Robertson and Palix emphasized cross-border e-commerce is a solution to the animal-testing quandary. “You can do cross-border without testing on animals. That’s how Feelunique has been so successful. You can sell cruelty-free to China,” said Palix. Robertson, who helps brands with their strategies in China, concurred. “Cross-border is real. It is a completely ethical way to do business in China, so that’s a big step forward,” he said. “In the past three or four years, cross-border has really stabilized and legitimized itself. It gives consumers access to all different brands and gives brands the chance to enter markets easily.”
Denton and Robertson enthused Chinese consumers are hungry for beauty. “People dismiss the Chinese consumer, [but] they are better informed than most,” said Denton. “They immediately can recall 13 [beauty] brands, compared to the American consumer who can recall eight brands. Their level of research, level of engagement, their openness to trying new things is far greater than anyone expects. They’re really excited about new brands, new stories.”
Chinese consumers don’t hold back from spending serious money on beauty products. Robertson revealed survey data showing that Chinese shoppers believe $100 to $150 is an appropriate amount to pay for a moisturizer while their American counterparts settle on $35 to $68 as the right amount to shell out. “In China, they still have an association that the higher price you pay for a product, the more effective it is,” said Robertson. When asked how much they spend on skincare in a year, Chinese consumers responded $3,000 to $4,000, roughly three times the $800 to $1,200 range given by Americans.
Denton explained disposable income is a reason for Chinese spending inclinations and suggested health concerns could be fueling interest in beauty as well. “Chinese consumers are obsessed with the toxicity of the environment around them,” said Denton. “They can’t really change that, so they think if they use the right [beauty] products, that will mitigate the effects of their toxic environment. So natural and organic are actually a huge selling point.” He added natural ingredients can’t be a brand’s only selling point, though. “You have to keep in mind that the Chinese are functional people, so the product also has to work,” he said.
On the influencer front, the Chinese have created their own classification called KOL or Key Opinion Leader. Though the terms KOL and influencer are frequently used interchangeably, Denton contends they aren’t the same. “A KOL typically has developed a platform not necessarily directly related to the specialty they’re talking about. A KOL might have been a beauty editor or something like that. She or he may have come from a different world, but, if they are authentic, and if they’ve been writing, [then] they get a following,” said Denton. In contrast, an influencer often doesn’t hold a notable position, but has developed a passion for a specific lifestyle that they share with their audience. Denton said, “Sometimes they’re in a vertical, but they can also go across categories.”
A convergence of cross-border commerce, KOLs and enthusiastic consumers with a see-now, buy-now mentality is pushing the Chinese beauty market forward. “A KOL would do a live broadcast on an e-commerce platform, and you’d literally have millions of viewers [who] could buy now,” said Robertson. “It was really powerful. In China, the conversion to purchase from influencer activity is much higher than we see in the U.S. because of tricks like that.”
Chinese consumers and KOLs alike tap peer-to-peer review site Little Red Book to learn about and purchase beauty products from around the world. “It’s essentially a cross-border platform,” said Denton. “People travel all over the world, they discover brands, and they talk about these brands on this platform. In so doing, the more conversation or noise around a brand, [then] that brand’s visibility rises within the platform. And, now, that platform buys product and resells it on the gray market to support that demand.” Roberston ended the night with a bullish statement on the state of the beauty industry in the world’s most populous country, saying, “What we’ve seen in the past year has been really positive. Makeup is growing 20% to 30%. Skincare is already quite huge. China is booming.”