Overseas brands having a soft landing in China

The majority of overseas brands have not made much splash after their high-profile official announcement to enter the Chinese market.

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Take Shiseido's men's skincare brand SIDEKICK for example. Although it has been attracting attention from the outside since it entered the Chinese market with the aura and heat of its parent company, the sales of the brand in its Tmall flagship store can be said to be unsatisfactory. SIDEKICK flagship store sales of a cleansing product are the highest, but only 1000+ people pay for it. There are three other products that show a few hundred people payment, the rest of the number of products payment is only double-digit.

Then look at LG Group's pure plain makeup brand Freshian, also with the aura of a well-known beauty group, the starting point of heat and attention is a cut above the general brand, but so far, the brand's performance can be described as mediocre. Freshian flagship store shows that the store is currently online 8 product links, despite being in the Spring Festival holiday purchasing campaign, but the highest sales of a single product link shows 400+ people paid, the number of people paying for one product is in double digits, and the rest of the products show 1 person paid or 0 people paid.

Even the brands that are backed by the head beauty group are in such a situation, so the situation of other overseas brands can be imagined. For example, Huda Beauty, a world-renowned online beauty brand that had entered China in a high profile manner, has not withstood the further test of the market after a short period of glory and has recently withdrawn from the Chinese market.

So, why do some overseas brands enter the Chinese market will be "not-acclimatized"?

"Overseas brands will face up to some problems after entering our country. The first is brand recognition. Unless it is the international head of the big brands, general overseas brands are difficult to quickly obtain the trust of consumers. Second is the supply chain response speed. Most of the supply chain of overseas brands are still abroad, and for domestic consumer channels, the production cycle and logistics cycle of products cannot meet the demand in time. The third is related to the regulations. Domestic regulations are getting stricter and stricter, and the filing and labeling requirements for overseas brands are very hard and cumbersome."Zhang Xiaoen, marketing director of Guangdong Brundo, said.

Zhang Xiaoen further said, "The survival space of niche overseas brands in China is not much, mainly because the domestic head brands have basically crowded the consumption market of mid-range channels, and it is difficult for some overseas niche brands to compete with the domestic head brands without brand premium.

In this regard, a well-known cosmetic brand responsible person said, "Any brand is not willing to give up the Chinese market, but at present, it can be said that the Chinese market is a stage for Europe and the United States high luxury, big brands, domestic products. The introduction of some small and unknown brands, can not gain the trust of consumers, naturally will not be out of the circle."

And Fan Jun, general manager of Shanghai Lanmeiyi Cosmetics Co., Ltd, believes that how overseas brands develop after entering the Chinese market has a lot to do with whether they can fully integrate into the Chinese market. Some brands enter by trade license, some by investment, and the degree of adaptation to the local market is different for different entry methods. But in general, overseas brands entering China need to do a good job of localizing their operations, adapting to local needs and finding their own brand's corresponding consumer groups. The key to getting out of the circle lies in whether they can adapt to the Chinese market and the needs of Chinese consumers, and whether they can solve the pain points of local consumers, which should be the same in any market.

So how should overseas brands which are entering the Chinese market develop?

An industry source with more than ten years of experience in brand operations believes that overseas brands in the Chinese market first need to build trust in the brand, can enter from niche categories or niche efficacy areas. Secondly, it is recommended that sales localization, and domestic sales teams with mature channels and experience in handling. Finally, to gradually localize the supply chain, we can use foreign technology, raw materials, etc. to repackage in China, and solve the problem of rapid response and delivery of channels in terms of the response speed of the supply chain.

"The most appropriate way is finding a strong ally inside the country, such as finding a trusted team to operate directly as an agent. But this is also a certain risk for the brand side. There may be a situation that the overseas brands will be abandoned when the local partners are raised, because it is not difficult for the domestic agency channel operators to find a replacement brand at any time, "Fan Jun said.

It can be seen that after entering the Chinese market, localization is the key. The cake is huge, but how to eat and whether to eat, are the overseas brands that want to as well as have entered the Chinese market must think through the problem.