Coty’s skin­care line jumps on Tmall band­wagon

China Daily (Hong Kong) - - BUSINESS - By WANG YING in Shang­hai wang_y­ing@chi­nadaily.com.cn

The thriv­ing Chi­nese mid­dle class and its huge spend­ing power keep at­tract­ing more for­eign brands to open stores here, but un­like the tra­di­tional method of en­ter­ing a new mar­ket, many brands opt for es­tab­lish­ing their pres­ence on the gi­ant Tmall, a B2C mar­ket­place owned by Alibaba and re­garded as the dom­i­nant force in China’s e-com­merce world.

One of the lat­est to join the trend is New York-based Coty Inc; its phi­los­o­phy brand en­ters the Chi­nese mar­ket on Satur­day, with its ini­tial pres­ence on the Tmall site.

Camillo Pane, CEO of Coty Inc, said the com­pany is launch­ing its US skin­care brand on Tmall be­cause of­fi­cials be­lieve this is now the best way to reach young Chi­nese con­sumers.

“It is just the be­gin­ning,” Pane said, adding that com­pany of­fi­cials have plans for in­tro­duc­ing other Coty brands onto the Tmall store­front.

“It’s no doubt that we are go­ing to strengthen our ca­pa­bil­ity in e-com­merce; this is our cur­rent fo­cus,” said the CEO.

He noted that the dig­i­tal chan­nel is es­pe­cially help­ful in en­abling com­pa­nies to reach their con­sumers in smaller cities, which con­trib­ute most of the growth.

Qi Xiaozhai, di­rec­tor of the Shang­hai Com­mer­cial Eco- nomic Re­search Cen­ter, noted that “many brands in China take their prod­ucts on­line first, which, in my opin­ion, is a safer choice es­pe­cially in con­sid­er­a­tion of the much higher cost of go­ing to brick-and­mor­tar store.”

“Brands can learn the ac­tual mar­ket de­mand, con­sumers’ pref­er­ences in a spe­cific mar­ket, and make fol­low-up ex­pan­sion plans ac­cord­ingly. From the per­spec­tive of con­sumers, they also need time to know and ac­cept a new brand. So the on­line plat­form is an ideal venue for their meet­ing,” Qi said

The pop­u­lar­ity of smart­phones has en­abled 70 per­cent of Chi­nese con­sumers to choose buy­ing beauty and per­sonal care prod­ucts on­line in­stead of phys­i­cal stores for con­ve­nience and lower prices, and 37 per­cent of peo­ple polled said they will go on­line for home­work be­fore mak­ing a pur­chase, ac­cord­ing to a re­port from Min­tel Group Ltd.

BLOOMBERG

Traders work at the Coty Inc booth on the floor of the New York Stock Ex­change.

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