Live-Stream Shopping Lifts China’s Beauty Market

The digital offerings and e-commerce capabilities of beauty and personal care brands, and retailers, including the adoption of marketing concepts such as live-streaming shopping, have been crucial to the resilience of the Chinese cosmetics market through the COVID-19 pandemic. Although the pandemic has negatively impacted the majority of consumer goods industries this year (Q2 GDP fell throughout Asia, Europe and the Americas), the beauty and personal care sector has fared better than most, according to Euromonitor International. In fact, while fragrance and color have faltered, skin care has flourished in many countries.

It is forecast by the market researcher that value sales of beauty and personal care products will decline 2% year-on-year in 2020. However, the market is expected to improve in the final quarter of the year and looking ahead, a compound annual growth rate (CAGR) of 2.7% is forecast for the three years running 2021 through 2024.

According to Euromonitor International, it is specifically the e-commerce capabilities of beauty and personal care brands and retailers in China that have helped to ensure sales remained relatively stable throughout the pandemic and will aid in the long-term recovery of the sector.

“China recovered relatively quickly from the global pandemic,” observed Euromonitor International Senior Research Analyst Kelly Tang, who also noted that the beauty and personal care sector in the country has demonstrated “relatively strong resilience against the slump in 2020,” particularly when compared with other countries.

Real Time Interaction

In a bid to strengthen their digital relationships with consumers, beauty players have been focusing on expanding their online offerings, building better virtual experiences, and establishing new points of sales. Live-stream shopping in particular is increasingly being employed to market products on platforms such as Alibaba’s Taobao Live.

“Live-streaming is an emerging format of marketing, which is getting increasingly popular in China,” Tang told Happi. “It enables brands to further engage and interact with consumers through online platforms, including but not limited to social apps like RED and Weibo, and short-video apps like Tik Tok.”

Tang went on to explain that during live-streaming sessions, key opinion leaders (KOLs) introduce and demonstrate products, interact with their audience through real-time comments, and distribute coupons which consumers can use by clicking on e-commerce links embedded in the live-streaming session.

“Live-streaming allows more clear and vivid product demonstration, real-time interaction between consumers and KOLs/brands,” she said.

Engaging Young Consumers

According to the market analyst, the live-streaming approach was primarily pioneered by beauty and personal care brands in China but is now moving into multiple categories. For example, Austin Li, also known as the “King of Lipstick” in China, first appeared in a Taobao live-streaming session in 2018 during the Singles Day Shopping Festival, which always takes place on November 11 (11/11).

“Now, live streaming has swept across multiple categories, including, but not limited to, luxury, home care, packaged food and even cars,” Tang reported.

It is perhaps unsurprising that China’s Millennials and Gen-Z consumers are the most engaged with these live-streaming shopping platforms as they “are more tech-savvy and are spending increasing hours online, resulting in more exposure to online marketing formats.”

If local and international beauty companies hope to win over Millennials and Gen-Z consumers, they must develop live-streaming strategies, say experts. Looking ahead, beauty and personal care brands, both Chinese and international, will see live-streaming shopping “as a must in their marketing plan” in China.

“Live-streaming offers international brands a very cost-efficient way to engage with Chinese consumers and build brand awareness,” she said.

“Many niche international brands enter the China market through cross-border e-commerce as the first step, and live-streaming enables these brands to better penetrate their target consumers.”

Beware the Second Wave?

With COVID-19 re-emerging and surging in many European countries, political leaders are developing draconian measures to deal with the pandemic. The United Kingdom has recently rolled out new lockdown measures, following France, Germany, Belgium and Greece, Spain and Italy, which had already announced second lockdowns. Unlike the first lockdown, however, schools will remain open. The US, too, is reporting a surge in new COVID-19 cases though experts expect the death toll to be less severe.

In contrast, according to Tang, the impact of a second wave of cases in China on the beauty and personal care market is likely to be limited.

“We are seeing a very minor effect of ‘second wave’ of COVID-19 on the China market, as new cases were relatively rare and can be controlled quite well,” she told Happi. “Thus, the COVID-19 crisis is only expected to impact the Chinese beauty and personal care market in 2020, while the market will continue to witness dynamic growth from 2021.”

According to the Euromonitor International analyst, Chinese consumers, especially those from top tier cities with high disposable incomes, continue to show strong appetite for premium segments.
“Even though offline channels all experienced shut-down to different degrees, we have observed that many beauty brands strived to expand in online channels to cushion the loss from offline,” she insisted.

Maintaining Balance

While online live shopping platforms and social media channels are helping to drive the development and demand of beauty products, finding the right balance of digital and non-digital engagement with consumers remains essential for beauty brands.

Many players are reporting success in managing their own social media channels and actively using celebrity endorsements but the traditional development of product packaging—making creations more visually appealing remains worthy of investment when it comes to increasing interaction with consumers on these fast paced, noisy platforms. 

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Michelle Yeomans
Freelance Journalist
Email: Michelle.yeomans@gmail.com

Michelle Yeomans is an award winning multimedia journalist. She has been reporting on cosmetics industry movements in EMEA, US and Asia for five years and has won an award for her coverage of the complexities of operating in the Middle East. Michelle’s passion lies in tracking the beauty culture and trends of the Asia Pacific region. Ever the AV enthusiast, she also relishes the opportunity to create engaging video and podcast content for the B2B industry.