Clarins China commerce site in China with high double-digit growth

Initial sales in China have exceeded expectations, with high double-digit growth in the first half year since the site went live in September 2012. Online customer acquisition is accelerating, with Clarins adding 5,000 to 10,000 new newsletter subscribers each month.

Best known for luxury skin care products, Clarins sells cosmetics in every country around the world through major department stores, specialty retail stores and spas as well as via several country-specific commerce sites.

Driving digital commerce in different countries around the world is a key growth area for Clarins, including one of the world's fastest growing markets, China.

With its enormous population of 1.4 billion and rapidly emerging middle class, China represents a major opportunity for Clarins. Online retail in China is expected to grow from $169.4 billion in 2012 to $356.1 billion by 2016, surpassing U.S. e-commerce sales, according to Forrester Research.¹

Challenge

The complexity of entering the Chinese market, particularly in establishing an online presence that balanced a localized approach with Clarins' desire to maintain a global brand identity, represented Clarins' key challenge in entering this lucrative market.

"Whether the websites we operate in different countries are for commerce or simply there for informational purposes, having our own website in each country where we have a subsidiary and official presence is mandatory," says Julien Chiavassa, Clarins' China e-commerce manager and head of digital strategy for the company's Asia-Pacific region. "We want to control the way that we communicate the brand, and be consistent across different channels in terms of brand identity, channels and guidelines."

China's "split personality" - one of the world's leading economies but also a country that is still relatively closed to the outside world for both cultural and political reasons - presented several challenges to Clarins as it set up its commerce site in the country in 2012.

Legal and regulatory challenges, particularly licensing requirements for operating a transacting site in China, as well as technology and infrastructure challenges, including operating within the restrictions of the "Great Firewall of China," presented key concerns for Clarins to address.

While Clarins' products were available via popular Mainland China commerce sites including Taobao and T-Mall, the company had a strong desire to establish a more official, direct connection with its customers that would provide it with direct control over pricing and brand presentation. Operating its own online commerce site was therefore critical to Clarins' business goals and brand presentation in China.

Another big challenge was the use of and integration with key consumer engagement technologies, such as China-specific social networks and search engines. "Many different social networks are banned in China, including Facebook and Twitter, and even Google is very hard to access from China," reports Chiavassa. "We had to rethink and localize a lot of different features on the global website to fit Chinese needs, including switching all international social networks to local social networks."

For any online retailer, search engine optimization (SEO) is a business basic that must be not only built but carefully monitored and maintained on an ongoing basis. As with social networks, a local approach was essential in China. "Google's market share in China is quite small, so whether we were working toward paid or organic searches, we needed to optimize for the local search engines," says Chiavassa. "I would say even the algorithms for organic searches are different, so you can't just take a global SEO requirement and put it into China; you have to localize lots of things to maximize your opportunities in China."

Solution

Clarins extended its global use of Demandware to quickly launch its own branded e-commerce site in Mainland China, moving from RFP to go-live in just six months.

Demandware's solution - a combination of its cloud platform, third party integrations, partnership with eCommera, and  offering for Mainland China - enabled Clarins to quickly enter the Chinese market and establish a foundation for growing throughout Asia-Pacific.

In addition, Demandware's partner ecosystem allowed Clarins to simplify and extend its global operations to the China site. "For instance, our end-to-end partner eCommera has developed features for a number of Clarins sites that can be utilized or not utilized, depending on the needs of each market," he adds.

The Demandware platform also addresses many of the technological challenges specific to China, including the North-South telecom divide within the country and "the Great Firewall of China," as the extra barriers that have been erected around the Internet in that country are commonly called.

Results

Clarins' online sales have made a fast start in China achieving high double-digit sales growth in the first six months since the site went live in September 2012. These sales still represent a relatively small portion of overall sales in the country.

Signs of growth include:

• Customer acquisition is increasing on a month-by-month basis
• Clarins' newsletter has gained 5,000 to 10,000 new subscribers per month from September 2012 to March 2013
• Clarins' average order value is higher in China than in Europe or the U.S., by as much as 30%
• Almost one third of online orders in China come from locations where Clarins does not have a physical point of sale presence