Effective Strategies to Tap into the Organic Beauty Market in China
China’s green market for beauty products has witnessed a strong demand and will continue to grow exponentially in the coming years. So, how can your brand successfully tap into the organic beauty market and appeal to Chinese consumers who have been distressed with past series of food scandals and counterfeit products?
China’s certification process, or lack thereof, for organic cosmetics
Following the China Food and Drug Administration (CFDA)’s cancellation of the paid certification in 2012, which was previously available to brands wanting to label their cosmetics as “organic”, brands have encountered barriers to communicate their organic and all-natural benefits to Chinese consumers. In addition to the lack of an official seal to prove organic status, Chinese consumers are even more doubtful and skeptical than ever with the plethora of product safety scandals in recent years, further bolstering their immunity to the marketing buzzwords of “organic” and “all-natural”.
With the nonexistence of an authoritative certification body for organic cosmetics in China and the high skepticism amongst Chinese consumers, there is even more of a pressing need for brands to deliver authenticity, brand honesty, and product origin transparency when selling to consumers. Brands must highlight ingredients and verify product origins in order to cultivate trust with their shoppers for each of their products.
Know your target consumers and establish trust and transparency
Chinese millennials and Gen-Z consumers remain the leading customer segments amongst the booming natural cosmetics sector. As concerns over poor air quality in metropolitan Chinese cities increase, brands must leverage this opportunity to appeal to consumers and drive their propensity for organic product purchases. The key to tactfully “[convince] Generation Z and Millennial beauty shoppers that anti-pollution products are essential to their daily routines comes down to transparency… Millennials and Generation Zs just want you to be straightforward with them.” That’s easier said than done.
A survey shows that “72% of female respondents indicate that they must know the composition of skincare products prior to using them”. Therefore, by simply shedding light on the ingredients, the composition, and the sourcing and production processes, brands can increase their conversion rates and drive purchases, ultimately paving the way to building long-term customer loyalty. Brands can further instill confidence in their consumers by making information about their brand and products widely and easily accessible through an omnichannel approach, with a heavy predominance on online channels given the younger demographics’ e-driven purchasing behaviours.
The online opportunities of the “luxury mentality” of Chinese millennials and Gen-Z consumers
Your brand is not the only one concerned about ROI – Chinese consumers too are willing to pay for completely natural products at a higher price as the “health benefits of premium skincare use…show a higher potential return on investment than a luxury handbag purchase”. In fact, according to Ipsos, an acclaimed global market research company, 72% of female respondents are willing to pay a premium price for natural and organic skincare products compared to non-organic goods and that females with “higher monthly household income have a stronger demand for skincare products with natural and organic ingredients”.
The “premium” that consumers are willing to pay for is not only to reap the apparent skincare benefits, product effectiveness, and safety, but also symbolises higher social status. Younger Chinese consumers, especially those in Gen Z, purchase luxury items and share these pricey organic purchases amongst their social circles to parade their extravagance and sophistication, ultimately aiming to boost social recognition. Brands often underestimate the millennial and Gen-Z segments’ purchasing ability given their young age; however, Kantar & Tencent’s white paper study shows this generation’s shocking potential spending power, positioning them soon to be the highest-level consumption group in China. “The average income of [Generation Z] is 3501 yuan/month, while the minimum wage standard of Shanghai in 2018 is 2420 yuan/month” and without earning any wages, Generation Z has already surpassed the working class in financial ability and spending.
Along with the steady rise of the high-consumption audience, brands must also fully harness and leverage the powerful network effect of this socially driven customer segment in China via social and digital media.
Tapping into the millennial and Gen-Z consumers’ digital savvy and social-first purchasing model
The Chinese Gen Z spends on average 2 hours and 43 minutes a day on social media and their strong purchasing power is most evident via these social media channels, where 70% of this group purchase more than 40% online. These digital natives are passionate about “self-expression, developing their interests online through sites dedicated to social activities related to niche hobbies and culture” and are fixated on appearances, propelling the growth of beauty and cosmetics in China (Bain Research). Marketing via diverse platforms such as Weibo, WeChat, RED, Zhihu, Douyin, and several other popular social networks is key to engaging with this target audience.
With an appetite for the trendiest products, digital–first consumers actively seek recommendations not only from their social media piers, but also from trustworthy key opinion leaders (KOLs) and key opinion consumers (KOCs). Because authenticity and brand honesty are key values at the core of younger consumers’ minds and hearts, together with this generation’s easy gravitation towards new brands endorsed by the masses, appealing to the right KOLs and KOCs to best represent and promote your brand is crucial when marketing to avid consumers of media and goods.
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