Competition for the burgeoning Chinese Beauty market has increased as the popularity of Korean brands with Chinese consumers continues to swell. Innovative products and ingredients, mid-range pricing, and the massive influence of K-Pop have driven the value of Korean cosmetics imports to China up more than 250 percent. Today, Korean cosmetics account for nearly a quarter of cosmetics imported to China, up 126 percent in the last year.1 As the Chinese economy has slowed, neighboring Japan and South Korea have become the top tourist destinations, increasing exposure to their products. However, Korean brands’ ascent has been at Western brands’ expense, not China’s. Skin Care and Color Cosmetics have seen some of the largest foreign share erosion, down 4.8 percent and 3.8 percent respectively in 2014.
This shift is also being witnessed online as Korean brands are giving their Chinese brand sites much needed facelifts with additional functionality and content to drive loyalty, trial, and commerce. However, there still remains a need to focus on e-commerce marketplace execution, search engine optimization, and social commerce in order for these brands to fully harness the Chinese Beauty market. Eight Korean-based brands3 were benchmarked in the L2 Digital IQ Index®: Beauty China.
Key Findings
• While European and U.S. brands Digital IQ dipped, and Chinese brands have
increased by only two percent, Korean brands experienced an average 18
percent year-over-year Digital IQ growth.
• Korean brands’ Baidu Index and Weibo Index are more than 1.5x and 4x
the Index Average, signifying popularity and purchase intent across search,
social, and e-commerce platforms.
• On Tmall, Korean brands maintain more than 1.5x the mobile followers and
are more likely to use QR codes to drive to mobile shops.
https://www.l2inc.com/research/beauty-china-2015/beauty-china-the-rise-of-korean-brands
