Glossier Expansion in China

ALINA SRICHINDA FASM415 CELINE CONSOLO

 1 OVERVIEW

2 COMPETITION

3 ANALYSIS
CONTENTS
4 RECOMMENDATIONS

5 RISKS

6 SOURCES
 Overview of Beauty Market in China
Chinese beauty standards and practices fall more in line with northeast
340 B
Asian beauty standards and less with European and North American.

They are more conservative and more focused on full regimes YUAN
2020
2nd largest in the world

Ecommerce is the force behind beauty market recovery. Ecommerce allows a

larger market reach and helps collect and analyze consumer data. Being consumer
FRAGRANCE
driven at the core allows understanding of changing chinese consumer needs. 5%

HAIRCARE
20%

The male beauty market as well as hair care market is expected to

grow in the next decade. Consumers in the Chinese beauty market
Skincare
also have increasing awareness in transparency and natural products. Makeup 60%
15%
 Chinese Consumer Addressable Market
Idealistic Beauty standards
Shifting towards Western Beauty Standards
Obsession with perfect ageless skin TAM
$423 B globally
Slow transition to Male Beauty Era in Beauty Market

Beauty Digitization
SAM
Popular Products include: $53 B in China's
Beauty Market
Ginseng, Astragalus , Goji, green tea, herbs, and
minerals like jade SOM
US Consumer $39.7 B in Skincare
and Cosmetics in China

$25 B in Glossier's age

Majority focus on clean beauty products
market (18-24)
Products gain trust through audience reviews
Loyal to their influencers
Constantly buying new products to try
 Leading Retail and Social Platforms
Taobao
Taobao, owned by Alibaba is a virtual
platform made up of many individual and
company stores. This platform services C2C as
well as B2C. Consumers purchase products
using a virtual assistant and purchase
transactions are completed til a satisfactory
product is received by buyer.
Pinduoduo
Pinduoduo is a C2M social commerce platform
where consumers are able to team together to
purchase products wholesale directly from the
manufacturers. By cutting out a bunch of
middle men, consumers save money and
companies have stronger control over profit
margins.
WeChat
WeChat is a social networking and media
platform. Functions include instant messaging,
image sharing, bill payments, shopping,
restaurant ordering, games and many more
mini programs. Owned by Tencent, this all-
encompassing app services over a billion users
a month
Weibo
Sina Weibo is a micro-blogging platform
centered around a newsfeed. Journalists,
celebrities, KOLs, business, and "netizens" use
this platform to get up to date information and
trend spot and discover. This app also
features mini apps including a game center
and a wallet function.

Best In Class Loyalty Program
Commerce Livestream
Celebrity Endorsements
Baidu Search Engine Support
Offline stores (taobao-tmall)
Strong Presence on Social Platforms
Chinese KOLs
Luxury Cosmetics to Lower Tier Cities
___
Political Involvement
Failed Quality Tests
Competitors
Competitive Analysis
Beauty Method concept store
Localization through “green” products
O2O Platform
Cutting-edge technology
Prestigious Skincare
AI Skincare Device Optune
Extensive network of Chinese
Influencers
___
Political Relationships
Little demand from younger
consumers
Virtual Mascot
40 Offline Stores (taobao - tmall)
Co-branding Collaboration
with popular IP
20-35 year old women, which is a
high spending power group
Private traffic on WeChat
D2C Distribution
___
Heavy Marketing Lower Quality
No commitment on sustainability and
Animal welfare
Collaborations with Chinese Partners
Partnering with companies like Beijing Mei
Da and Maxims, Starbucks was quick to
learn Chinese preferences and habits
STARBUCKS
SUCCESS IN CHINA
Local Offerings
Starbucks reinvented a chinese style tea
house, merging the gap between tea and
coffee drinkers and used local ingredients
in their products
Superior Distibution
Starbucks partnered with Alibaba to
create a seamless omni-channel Starbucks
Experience. This includes Starbucks
Delivery Kitchens and a Virtual Store
Long Term Strategy
Focus on Three pillar of Family, Community,
and Status to remain relevant in the region
and Three Key Areas including loyalty
program, digitalization and new member
acquisition to drive sales.
 Analysis of Glossier's Existing Strategy
FOCUSED DEMOGRAPHIC
Glossier focuses on Millennials and Gen-Z because they are experience led and $750 mil.

prefer the 'natural look'. With their product pricing, they offer their demographic Estimated Annual
Revenue
a feeling of luxury while being on a budget.

.15% Market Share

PERFECTING THE CUSTOMER JOURNEY

The main focus being their direct-to-consumer business model. They own all the
data on their customers to create campaigns based off that data collection.
What percentage of the
brand's overall global revenue
does that represent?
PEER-TO-PEER CONNECTION
Existing customers creating content along with reviews allows for more authentic What is the
year-over-year
and organic brand recognition. Also by utilizing that same customer content into revenue growth?

future campaigns.
 Analysis of Glossier's Existing Strategy
Successes Failures
Grant Program for Black-Owned Beauty Businesses "Outta The Gloss"

'Surprise' or word of mouth sales Glossier Play line

Assessment
Their current initiatives and marketing strategy has proven to be successful as long as they
stick to the core of why their customers appreciate Glossier. Straying away from the brands
principles of the importance of sustainability and convenience could backfire and be
detrimental to the brand's image.
 Recommendations Revenue Growth

Glossier has a strong e-commerce presence

and the customers trust the information
and reviews on the site.

Being able to
extend that For the next 12 months we
EXPERIENCE CONVENIENCE expect Glossier's sales to
trust in in-
store increase due to the Series E
Focusing more on Partnering with
experiences funding round of $80
brick-and-mortar shop-in-shops to
would million. With this increase in
immersive cover more
increase their funding, we will see both e-
experiences ground
brick-and- commerce and brick-and-
mortar sales mortar expansion
as well. internationally.
PRICE
SELECTION

Keeping the price so

Adding to their
the customer feels
strong product line
like they're buying
with more staples
luxury at discount
 Having more immersive experiences for
customers internationally. To make them
feel a personal connection to the brand

KOL Partnerships after leaving the store. Integrating the e-

commerce experience with brick-and- Retail Partnerships
mortar by curating a personalized
experience for each individual customer.

Perfect Diary has made a huge Maintaining the current partnership

impression on the same target with the WMBA, Glossier would also
demographic as Glossier. Building the add to it's existing partnerships with
same trust by taking the time to find and small business beauty brands in China
talk to customers about their products
with casual conversation.
Sales Channels that focus on traditional heritage,
styles and Chinese culture.

Florasis, for example, focuses on

heritage by using traditional Chinese
Building a partnership with Perfect recipes and ingredients, like herbal
Diary would allow Glossier to be extracts and flower essence. The
introduced authentically to their key brand’s packaging and products are
demographic in China. also adorned with historical imagery
and patterns.
 Risks

FIRST SECOND THIRD FOURTH MONTHLY

QUARTER QUARTER QUARTER QUARTER INITIATIVES

Getting the right Perfect Diary could There could be products Unforeseen Establish presence
impression in the deny partnership or unknowingly similar to governmental Build trust in Chinese
Chinese market. discredit Glossier in Glossier in the Chinese challenges or market with local
the market. market already. bureaucratic partnerships
problems. Continue building a
solid brand image
though customer
reviews and content
 Sources
https://www.kantar.com/inspiration/consumer/growth-opportunities-in-the-chinese-beauty-market

3 https://english.ckgsb.edu.cn/knowledges/china-rapidly-changing-beauty-market/
https://www.statista.com/statistics/1239558/china-age-breakdown-of-color-cosmetics-consumers/
https://www.chinatechblog.org/blog/the-future-of-the-global-cosmetics-industry-is-made-in-china

https://www.hicom-asia.com/how-to-choose-the-best-chinese-e-commerce-channel-in-2020/
https://www.cnbc.com/2019/02/04/what-is-wechat-china-biggest-messaging-app.html
5 http://tradeontaobao.com/what-is-taobao/
https://www.dragonsocial.net/blog/chinese-social-media-weibo-and-twitter-comparison/
https://clarkboyd.medium.com/pinduoduo-everything-you-need-to-know-about-pdd-chinas-third-biggest-ecommerce-site-38ac42086e47

https://daxueconsulting.com/perfect-diary-case-study-how-this-chinese-makeup-brand-got-to-the-top/

6 https://cosmeticschinaagency.com/lancome-seduced-chinese-women/
http://www.iberchina.org/files/cosmeticos_china_fung.pdf
https://jingdaily.com/shiseido-japanese-beauty-china-skincare/

7 https://www.nasdaq.com/articles/starbucks-outlines-long-term-growth-plan-china-in-focus-2018-12-14
https://supplychaindigital.com/sustainability/starbucks-and-alibaba-form-partnership-will-pilot-delivery-services-china

9 https://www.businessofbusiness.com/articles/glossier-cancelled-beauty-brands-loreal-data-social-media/
https://www.retaildive.com/news/glossier-lands-80m-in-funding-as-it-looks-toward-international-expansion/602942/