Why SK-II is “Holy Grail” for P&G in China
- Chaileedo Press
- Sep 23, 2021
- 3 min read
In 1980, the SK-II brand and trademark were acquired by P&G and licensed to P&G in Japan for full production of the brand.
SK-II is a high-end cosmetic and skin care brand from Japan popular in East Asia and Southeast Asia, etc. In 1980, the SK-II brand and trademark were acquired by P&G and licensed to P&G in Japan for full production of the brand. Its main ingredient PITERA™ represented key highlights of the brand.
Since the launch of its first skincare product in 1980, SK-II has been a pioneer in combining cutting-edge technology with pure natural extracts into skincare products and it have released many groundbreaking products.
With the rise of the younger generation putting new powerful impetus into the market, the Chinese cosmetics market keeps making a shift in consumer base. SK-II, which was born in Japan, as the age of 46, has turned to a popular skincare brand worldwide. Its rapid growth in China is driven by growing demand of Chinese consumers for skincare and the trend of consumer upgrading.+
On October 20, 2020, international household chemical giant P&G announced its fiscal results for the first quarter in 2021 (July-September 2020), with its sales reaching approximately US$19.3 billion. P&G has gained a lot in China market. Its star brand represents the main part of its economic growth thus SK-II sales in mainland China increased by more than 20%.
SK-II has become one of the largest brands in the international beauty category in terms of volume since its entry into Jingdong(JD: one of China's most popular comprehensive shopping sites) in 2015. It has since grown by over 70% year-on-year for three consecutive years which has been leading the beauty category in sales growth and broke several beauty brand records.
In SK-II online flagship store on Tmall (Tmall: one of China's most popular comprehensive shopping sites), a facial skincare kits at the price of 107.08 dollars enjoyed sales volume of more than 20,000 pieces as of October 21, 2020. In addition, more than 4,000 people booked the "Double 11 Rush" event. SK-II ranked sixth in the 2020 Tmall Top 10 beauty list with sales of $144 million in the promotional campaign on November 11, 2020.
Benefit from innovation strategies and the push of the duty-free business including Hainan, SK-II product sales grew by more than 30% in the fourth quarter in 2021 (April-June 2021). In addition to the sales contribution from Hainan Duty Free, it has also performed well online. During promotional campaign on June 18 in 2021, SK-II ranked 8th in the Tmall beauty brand. (Tmall Beauty: an independent beauty vertical marketplace on the Tmall platform)
Both the SK-II - Facial Treatment Essence 2021 New Year Limited Edition and SK-II - Facial Treatment Essence Tokyo Girl Edition, which debuted on both platforms in March, achieved impressive results, with 44,000 units of the New Year's Limited Edition released in January sold.
SK-II has promoted a lot of brand marketing strategies due to connect more closely with Chinese consumers and make them relate to the brand. Since 2015, SK-II has been promoting its brand values through films for the first time. Later, they have produced many films from the first film "Ballerina" to the popular "She Ended Up in a Blind Date" using stories to connect with consumers and pay tribute to women who are brave enough to change.
In August this year, SK-II also re-enacted the advertisement of the classic products Shen Xian Shui from years ago with its long-time global ambassadors Tang Wei and Ni Ni. It also launched a new documentary series, "My Story with PITERA". Through behind-the-scenes emotional expressions and conversations, Tang Wei and Ni Ni share their life journey and transformation and feelings of skin condition from using their first bottle of SK-II Shen Xian Shui. PITERA and Facial Treatment Essence have become core brand assets of SK-II . (Shen Xian Shui: refers to SK-II Facial Treatment Essence)
Since SK-II entered the Chinese market in 1998, it has established a long-lasting emotional connection with Chinese consumers who have given the product the affectionate nickname "Shen Xian Shui" due to its claimed effectiveness in improving skin. Especially with the rapid development of social media in China in recent years, the word-of-mouth effect has further increased Chinese consumers' awareness of "Shen Xian Shui".
As with a century-long brand iteration of research, development and marketing of its iconic products, continuous promotion of its star products, PITERA™ and Shen Xian Shui, is clearly one of the most important brand goals for the past, present and future for SK-II.
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