A few months ago, Kantar released their 2021 Beauty Industry White Paper sharing observations and analysis that can assist brands to refine their strategies in the category. Many of the findings are complementary to the real-time insights gleaned from the China Skinny Skincare and Beauty Trackers.
Although the white paper explores China’s colourful cosmetics category, many of the findings are relevant across most categories in China. Whilst price remains an important tactic to attract consumers, one of the key outtakes from the report is that “consumers are growing tiresome of price-focused communications and are instead on the lookout for more authentic and experience-driven content.” This affirms the data from our Trackers which illustrates that most brands are over-discounting relative to the price that consumers are actually paying for goods. Whereas many distributors and some marketers still insist upon strategies that are focused on price promotions, marketing in China is growing up.
Leading multinational brands have been investing in brand building – in addition to transactional-focused communications – for some time, and the rising local brands are starting to cotton on too. They are increasingly looking beyond short-term ROI to creating brand equity in the longer term. As we’ve seen with the record number of luxury brands participating in this year’s Singles’ Day Festival, they are going beyond just offering special deals to tempt consumers with exclusives, unique services or very particular experiences.
The approach is echoed by a Singles’ Day report published by Bain, which reiterates the need to ensure that Double-11 tactics feed into the bigger picture. Success during the festival should be assessed by the longer term measures of customer retention, operating profit, and customer lifetime value. With the cost of acquiring new customers continuing to soar, selling in China is approaching a point where there can be no growth strategy without a loyalty strategy.
One of the effective strategies of attracting consumers using non-price levers is playing to their love of new and novel products. On average, almost 100 new products were launched every day in China in 2020, just in the cosmetics category. Although many were tweaks of existing SKUs, they connected with new target groups, their behaviours and needs, and marked special occasions with gift sets and limited edition offerings. Many consumers were also tempted by innovative and interesting ingredients, although these ingredients generally needed to be connected to product efficacy.
Despite the hype behind China’s ballooning silver population, young digital consumers continue to be the most important market for most brands in China. In the cosmetics category, women under 40 account for nearly 70% of the total market, far exceeding their population share. The younger the consumer, the more they are influenced by brands and content that resonates at an emotional level and aligns with their value set, as the appeal for transactional tactics cools and becomes increasingly unsustainable. Hence, marketing is much smarter and more interesting now than the days of just dropping pricing – we’re happy about that!
Get in touch with China Skinny to chat about how we can assist in making your marketing strategy more resonant and sustainable with consumers who are looking beyond the next discount or offer.
Click/tap here to see this week’s most important China market and marketing news.
The post Time to Evolve Your China Marketing Strategy Beyond Pricing & Discounting appeared first on China Skinny.