WWD.com/beauty-industry-news/beauty-features/sephora-opens-shop-in-shanghai-575730/

SHANGHAI — It’s easy to find the way to this city’s brand new Sephora shop: Just look for the little black-and-white bags.

Only weeks after the store’s mid-April opening on Huaihai Central Road, a pedestrian-heavy, center-city shopping spot here, the streets surrounding the store were already peppered with Sephora’s distinctive shopping bags. All anyone had to do was follow the trail to find the source, a 3,200-square-foot Sephora boutique that company representatives are calling a “beauty candy store” — a small but diverse mix of skin care, cosmetics, and fragrances that marks the company’s first foray into the China market.

“Beauty is bigger than ever before in China,” said Richard Lim, general manager for Sephora in China. “The demand for beauty products is on the rise. It’s obvious in the amount of investments the major brands already in China are putting into advertising and expansion. But we’re also seeing it in the excitement of our customers.”

The Shanghai Sephora shop, which has been in development for a year, is the first step in the firm’s plans to bring more makeup to China’s masses. Sephora, a division of LVMH Moët Hennessy Louis Vuitton, is planning to open a second store in Shanghai this year and, in 2006, a third Shanghai store as well as a Beijing unit. The retail outlets are operated as a venture between Sephora China and a local partner, Shanghai Jahwa United Co. Ltd.

In a beauty market that’s already getting crowded with local and foreign brands, Sephora is hoping that its “please touch” approach to beauty products will make a splash with Chinese customers. Previously, beauty shopping has been mainly limited to department stores and a small number of single-brand, stand-alone shops and drug stores, where products are often out of reach or tightly sealed shut. Lim said he hoped Sephora’s hands-on philosophy would appeal to Chinese customers, many of whom are still learning about beauty products and looking to experiment with them.

Indeed, customers at the Shanghai shop on a recent weekday seemed taken with trying out the offerings. Young teens dabbed their fingers in pots of eye shadow and blush, the bright shades eliciting giggles as they were swiped on eyelids and cheeks. Middle-aged professionals carefully dabbed on pink lipsticks and pouted in mirrors. And yet despite the obvious popularity of sampling, Lim acknowledged that one obstacle with Chinese consumers is that they still have to be guided to just go ahead and grab.

This story first appeared in the May 3, 2005 issue of WWD.  Subscribe Today.

“Even though we have samplers and testers on every shelf, people are hesitant to try it because they still don’t know if they are allowed,” Lim said. “They don’t know what’s permissible. Our staff has to really encourage customers to open up the product and try it on their hands or their faces. You still see a lot of hesitation. This is still a very new concept here.”

Sephora is also hoping to win over the market with customer service, a quality not currently found in many Chinese retail stores. All of Sephora’s floor staff must attend a six-week school that gives them a full course in the product range as well as training that will help them approach and assist Chinese customers, who are often very reserved when communicating what they’re looking for.

“We use the same basic approach as we use in the U.S. or Europe, but we have to adapt it to the customer here,” Lim said. “Asians are much more shy when it comes to expressing what they want, and we understand that. In the U.S., you might walk up to a customer and say, ‘Sir, can I help you? Are you having any skin concerns?’ But in China, many people find that question to be too direct. So, we take that one question and adapt it into many questions. We’ll start with a lengthier approach, such as ‘How are you today? My name is so-and-so. I have a new beauty product that I’d like you to try.’ There has to be a lot of small talk to make customers feel comfortable. The concept of our store is open, but the customers are not quite as open yet.”

Sephora’s expansion plans also include introducing brands not otherwise available in the Chinese market. They are already selling Kenzoki, the LVMH-owned skin care line from Japanese fashion house Kenzo. Before the end of the year, other brands will be sold in Sephora for the first time. These include Murad, DermaNew, and Doctor’s Dermatologic Formula from the U.S.; L’Occitane from France, and Seven Meet Myself and Caolion from South Korea. In 2006, other brands, including Smashbox and Nars, are due to arrive on shelves.

Those products will mix with existing offerings from brands like Anna Sui, Clinique, Shiseido, Yue-Sai, and the firm’s own private label line. Lim acknowledges the vast assortment of options is a little overwhelming to China’s customers right now, but said he thinks it’s only a matter of time before the beauty market explodes. After all, he points out, the fashion industry faced some of the same obstacles, and now that market is flourishing.

“With fashion 10 years ago, there weren’t many choices available in China,” he said. “Now, you see a flurry of colors and styles. It’s the same with beauty products. People are starting to look beyond brown and black. They want blue and green and pink as well. They’re learning to experiment, and that’s exciting.”