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How Benefit Cosmetics is Conquering the Cosmetic Market in China

In China on July 30, 2011 by artemisaeb

Benefit Cosmetics, a divisional unit of LVMH Moët Hennessy, is a beauty brand based in San Francisco.  With a large majority of their sales coming internationally, Benefit has expanded to sell their products, including their one-of-a-kind cult favorite products in more than 35 counties.  This Spring, Benefit expanded their online presence into China with a new eCommerce website to accommodate millions of Chinese consumers.

Benefit Cosmetics is in a prestigious set of powerful U.S. retailers and e-commerce players investing in China’s emergent online retail market.  Retailers that have announced investments in China in the last 10 months include Wal-Mart, Apple Inc, and Gap Inc.

Why China? They’re online. They’re shopping. And they’re social and mobile fanatics.

According to the China Internet Network Information Center, as of December 2010 there were 161 million online shoppers in China. In 2010 alone, consumers in China spent over $48.8 billion online, with predictions from Forrester Research projecting that e-commerce sales will more than triple to $159.4 billion by 2015. Growing internet usage and sales aside, and most of them, over 303 million in fact, are using their mobile phones to surf the web.

You won’t find Facebook or Twitter in China, but you’ll find plenty of other social media and microblogging options (dare I say copycats) to pick from in the social media landscape. According to eMarketer, social network users in China will more than double in number to 488 million in 2015, from 207 million in 2010.  What does this mean to retailers? According to the same eMarketer study, individuals in China use social networks to communicate and follow brands and websites, even promoting favorite products across their online networks.

What Can Other Retailers Learn about Digital Expansion Into China from Benefit?

Benefit launched their own eCommerce website to appeal directly to Chinese consumers.  But how did they do this?  I recently spoke with a digital executive at Benefit Cosmetics that explained a few things they did to launch their eCommerce presence in China including:

1.     Embracing local partners. Benefit worked with a number of different local agencies to launch their eCommerce website. They also have a project manager on-site in China to manage these relationships.

2.     Don’t depend on traditional marketing. Benefit “took it to the street” to get the word out about their products and new website. They invested in advertising in taxi cabs and got active with blogging. With a strong, and growing, microblogging culture in China, Benefit uses this channel to listen to and communicate with their fans and customers.

3.     Exclusive offers in the land of deal-seekers. Chinese consumers are the most savvy bargain shoppers. To stand out, Benefit offers consumers what they can’t get anywhere else including samples and gifts with purchase.

What didn’t come up in our conversation? 

Benefit has done a beautiful job of engaging with their target markets in China.  To compliment their new, sleek website for China, Benefit Cosmetics is active on multiple social networking and microblogging sites: Kaixin and Weibo.

With Sina Weibo, a platform similar to Twitter, users post 140-character messages as well as videos, photos, comment on updates, and more. In China, nearly 50% of these updates are sent from mobile devices.

Benefit is actively posting on both platforms, incorporating lessons learned from expansion into other social platforms all over the world as well as paying specific attention to differences in how those in China use social networking.

What should be in the next phase of conquering the hearts and minds of Chinese beauty product enthusiasts?

Embrace online video. While Benefit Cosmetics has embraced video in the U.S. and Korea they are not using a specific platform in China to share product news with consumers. Benefit may even want to consider having their own brand ambassadors or stylists specific to the Chinese market as the “voice” of these videos.

Keep your eyes on mobile.  As the mobile market continues to grow in China, consumers will demand more content including games, contests, and more from their mobile devices. Since Benefit knows cosmetics are a top topic of conversation on on social media sites, creating fun, engaging, interactive content could be the next step for Benefit to conquer the cosmetic market in China.

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2 Responses to “How Benefit Cosmetics is Conquering the Cosmetic Market in China”

  1. There is not a lot that I would change about this post. You chose a strong topic connected to your work (once again) and did a great job of digging into it and offering your own fresh viewpoint. The fact that you were able to speak with someone to get the sense of how this really works and report back on it was a particularly good piece of your post. I hope you have plans to repurpose some of this content on a work related blog where more people can see it. These are not only very strong posts, I think you should consider sharing them more broadly outside of our class and with the “real world” out there. (5)

  2. Thank you Rohit. I love the industry and have focused on the retail community for each of the countries we have studied to learn about the general online retail environment, the differences in communication tools currently being utilized, and the market leaders. What I find particularly interesting are the US retailers that have found great success in these countries and what they did to succeed internationally.

    I make sure to re-post my blogs on my personal blog at http://atiffanybox.blogspot.com/. I just started this blog last year and have been working to develop what I speak about, how often, etc since I also have to post professionally to the Shop.org blog.

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