The conquest of the stunning Chinese market !

Remember your last holiday abroad when you were thinking about how different the food was –“did this Mexican restaurant try to poison me with all this spicy sauce?”- or when watching a report about Japan at TV and you were wondering what they could find so wonderful about sleeping in capsule hotels. Ladies and gentlemen, this is all about culture differences. And in terms of business it is the same: when entering a new country, brands need to adjust their plans and to market themselves in a different way1.

Global western firms as L’Oréal and Estée Lauder have managed to penetrate emerging economies successfully, expanding the products we all know to new challenging markets. Let’s concentrate first on L’Oreal’s expansion in China, ‘cause we all worth it! The company has used an aggressive strategy in order to succeed in China. This market is the biggest one within the emerging countries and the third in the world after USA and Japan. In 2013, L’Oréal sold for $2 billion of cosmetics and make up products in China, which represents 9% of the total market share3. To keep growing, L’Oréal acquired the Chinese company Magic Holdings International Limited for $850 million in 20133. This strategy has also been used previously by the brand with the purchasing of Yu Sai. Those new acquisitions are a real strength for L’Oréal as it allows the company to have a deep and better understanding of the Chinese market, and so to deploy a more adapted marketing strategy. For example, Yu Sai propose a wide range of premium cosmetics that used traditional Chinese medicine. Those kind of products are more willing to attract Chinese consumers because they are adapted to their tastes and expectations.

What about Estée Lauder’s strategy? Well, the company has launched in 2012 a new brand called Osiao, especially dedicated and designed for the Chinese market and the Asian consumers2. This strategy of Estée Lauder is totally different from the one of L’Oréal that tries to adapt to the western codes on the Chinese market. In opposition, Estée Lauder wanted to launch products that reveal the original Chinese beauty and reflect Chinese values. Osiao is a high standards brand that uses Chinese essence to market its products and surfs on the digital trends to communicate through social medias and forums in order to expend their market shares. Word-of-mouth is obviously very important in our Western countries –don’t deny that you’ve never been influenced by your relatives’ opinion, we won’t trust you!-, and it is even more powerful in China, so it was a relevant communication strategy to increase Chinese consumers’ brand awareness3. Indeed, Chinese will trust information they have read on testimonials and love to share in the web when they are satisfied about a product.

OSIAO BRAND THEMATIC AD 05092013.jpg

As you understood, Estée Lauder and L’Oréal are using quite different strategies, however, both brands managed to be successful and to attract customers in their domestic as well as foreign markets thanks to a deep understanding and management of the culture differences.

Your devoted mascara addict, Coralie.

[1] Olivier. (2013). Why Cosmetics brands have to adapt their strategy in China, Marketing China. ONLINE. Available at : http://marketingtochina.com/why-cosmetics-brands-have-to-adapt-their-strategy-in-china/. Last Accessed: 11 Nov’16.

2 Anonymous. (2015). The High-end cosmetic market in China, Gentlemen marketing agency. ONLINE. Available at: http://cosmeticschinaagency.com/the-high-end-cosmetics-market-in-china/. Last Accessed: 11 Nov’16.

3 Trefis Team. (2014). China To Remain A Challenge For Global Beauty Players, Forbes. Available at : http://www.forbes.com/sites/greatspeculations/2014/04/09/china-to-remain-a-challenge-for-global-beauty-players/#5ba859912f1f. Last Accessed: 11 Nov’16.

Featured image:
Chen, C. (2012). Fan Bing Bing for L’Oréal: Dramatic Charcoal, The Makeup Box. ONLINE. Available at:  http://www.makeup-box.com/post/25851858493/fan-bing-bing-for-loreal-dramatic-charcoal Last Accessed 22 Nov’16.

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