SHANGHAI — In conjunction with its annual beauty awards Sunday, Tmall executives held a summit to outline trends and innovations in China’s beauty e-commerce sphere.Winners at the fourth annual edition of the awards — selected by Tmall based on criteria such as search popularity, customer reviews, sales and service — included brands such as SK-II, Estée Lauder, Giorgio Armani, Givenchy, Lancôme and MAC. All of these brands are also examples of the increasing number of high-end foreign beauty brands, which have joined the Tmall platform in recent years.This trend is being driven by China’s overall e-commerce boom, as well as an adjacent B2C e-commerce growth for major platforms, such as Tmall.According to data from Analysis, China’s B2C online retail market reached $187.7 billion in the fourth quarter of 2017, an increase of 43.2 percent. In that quarter, total transactions on Tmall grew by 45 percent and accounted for 60.9 percent of the total B2C e-commerce market in China.More recently, brands and storefronts on Tmall operated by Chinese celebrities and influencers have also contributed to the changing face of beauty on the platform. One of the highest-profile examples is actress Fan Bing Bing’s Fan Beauty, which sells limited-edition beauty devices through a Tmall storefront for 2,399 yuan apiece, or slightly less than $380 at current exchange.Fan has tapped into one of the biggest areas of growth within the beauty sector on Tmall, identified in data released by the platform along with research agency Kantar Worldpanel, at the summit. Beauty devices — a category expected to reach $113 billion in global sales by 2024, according to data from Variant Market Research, growing at a CAGR of 18.3 percent from 2016 to 2024 — saw sales on Tmall grow 146 percent on the year in 2017.Other standout statistics from the report included an online increase in skin-care purchases of 41.9 percent, compared with overall growth in China of 17 percent. Meanwhile, purchases of color cosmetics grew 56 percent online in 2017, compared with 29.3 percent in China overall, a sign of Chinese consumers’ growing acceptance of color categories.While 53 percent of surveyed female consumers bought more online overall in 2017, compared with 2016, 35 percent specifically reported buying more skin-care and color cosmetics and more than half, 54 percent, said they had increased the quality of products they bought online in 2017.Mobile is already the dominant method used by Chinese consumers to purchase products online — projections from eMarketer estimate mobile commerce will account for three-quarters of all e-commerce transactions in China this year — and newer innovations, especially augmented reality, are among the next wave of innovations Tmall executives predict will remake the way China’s e-commerce consumers — who are only getting younger and more digitally native — buy beauty online.On display at the summit’s interactive area was a “Magic Mirror” designed in conjunction with L’Oréal, which will be placed in brick-and-mortar stores — an initial rollout is planned for 50 L’Oréal counters in China. The mirror interacts with, for example, a lipstick product consumers choose from the display beneath, showing color on the consumer’s reflection in the mirror, and bringing up all the other colors in that line of lipstick, for the consumer to click on and virtually try.The same AR technology is available through L’Oréal’s storefront on Tmall, where selected items are available for consumers to digitally “try on” using their phone camera.Vending machines dispensing beauty products also figure in Alibaba’s vision of retail in the future, with lipstick vending machines already on show at the company’s InTime Department store in Hangzhou. According to an Alibaba spokesperson, one brand with a counter at Hangzhou’s InTime saw seven times the amount of lipstick moved via the vending machine than the traditional counter, since its installation in November last year.As with all “New Retail” initiatives being promoted by Alibaba, the key ingredient is integration, between on and off-line, between Alibaba’s apps, digital payment platforms and between where the customers are online and how they want to shop with increased gamification elements and technological innovation.According to Ye Guohui, general manager of Alibaba’s New Retail department, in spite of the talk of the changing Chinese consumer and the much touted country-wide “consumer upgrade,” the basic desires of consumers have remained relatively constant, with the big change being in the ability technology provides companies to provide better products and services.“Suddenly there are different platforms, different ways of shopping, but actually, in many ways, the requirements of consumers are the same, they have always wanted good products and good service,” he said.“Now we have the tools with Alibaba’s shopping platforms, media platforms, payment platforms online and off-line, to improve product quality and service.”Another major talking point at the summit was customer-to-business [C2B] interactions, which increasingly allows for nimble beauty companies to leverage feedback to develop new products, read new trends and develop educational and marketing content constantly.
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