Fuelled by the Guochao trend, Chinese beauty brands have witnessed a stellar growth domestically in recent years. Perfect Diary, Florasis, Proya, Winona, To Summer, the list of successful C-beauty brands goes on. Barring some hurdles, C-beauty is poised to disrupt global markets.
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For the new installment of our UPSTARTS Voices, Retail in Asia caught up with Lisa Shiqi Yu, the founder of GĒNLAB, a global brand incubator.
Before launching GĒNLAB in August 2021, Lisa held the position of Head of Social at L’Oréal China. She founded GĒNLAB to incubate foreign brands in China, helping them compete with C-beauty in the 0-1 stages. And now, Lisa aims to help Chinese beauty brands go global.
RiA: You started GĒNLAB to incubate foreign brands in China. Why focus on C-beauty brands now?
Lisa: It all started when I realized one day that there was no Chinese beauty brand with global reach. However, when looking at our neighboring countries: Korea has Amore Pacific and Japan has Shiseido, both are extremely successful on a global scale. Hence, I started to ask myself the question why. During my MBA thesis I researched this topic and later published a book on Amazon called ‘Chinese cosmetic brands going global’. What I found was that it wasn’t at all about product quality or product innovation in most cases, because a lot of the global premium luxury brands are actually using the same production facilities. My hypothesis was more around the branding and communication side since beauty can be something very specific to the culture and beauty standard in particular countries. So, as a cross-cultural beauty enthusiast understanding both worlds, I made it my mission to support C-beauty brands going global, because I think there is a lot of potential.
RiA: From your point of view, what can C-beauty brands bring to the global scene?
Lisa: Especially in the color cosmetic category I have seen a lot of incredible new textures, new product variations and new product categories which I haven’t seen in Europe yet. For example, I recently discovered a brand called sit.e and I quickly became a huge fan of their brand personality and overall look and feel. They came up with this cool product idea of a ‘freckle cushion’, so it is a cushion product that can give you cute summer freckles.
Another aspect where I think Chinese beauty brands can bring to the global scene is the art of packaging. Actually, this aspect was one of the challenges for some of the Western brands I have worked with. What I have seen is that Western brands sometimes struggle with the quality of the packaging when they are priced at a mass market level. But Chinese brands manage to balance price and quality and are really creative about the visual experience.
RiA: The Guochao trend fuelled the rise of C-beauty brands in their domestic market. How are C-beauty brands perceived in other Asian and Western markets? Is there still a reluctance to buy products “made in China”?
Lisa: Absolutely, with China as a country getting stronger and the young generation witnessing this, it certainly helped the entire consumer industry to jump on the national pride aspect, I think Li Ning was at the frontier of this cultural shift and a lot of brands started to cooperate with very traditional cult products, for instance, I once saw a fragrance collaborating with probably the most famous Chinese candy brand called ‘big white rabbit candy’ – I always had this candy when I was little. People can just relate, and traditional Chinese brands became cult and cool at once.
When it comes to other countries, I think at this moment, SEA countries have a much wider acceptance to C-beauty brands. Partially because of the similarities when it comes to outer appearance (skin & hair color, facial shape details…)
For the Western markets however, accepting C-Beauty brands are definitely in their infancy. From my primary research study, the associations with ‘made in China’ are still more associated with cheap and low quality, it will definitely take time to transform a mindset shift. What I can observe now, is that the consumer electronic industry starts to thrive in their global market expansions. I really believe that there is a shift happening right now from ‘Made in China’ to ‘Created in China’.
RiA: Let’s talk a little bit about the consumer. Have these new brands made it in China due to specific marketing to younger consumers? Or please tell us what the secret behind their success is. And how do you think they can adapt their winning marketing and sales strategies beyond China?
Lisa: In my opinion, a lot of the brands are very smart about their product and channel. They hit a great time when e-commerce and social media started to boom in China. Starting with Alibaba, the little red book, the gigantic success of live streaming and now TikTok. Having amazing supply chain, good value for money products and a huge traffic and awareness push really established some of the well-known C-Beauty brands in China.
There are definitely numerous learnings and experiences brands can derive from their experience when expanding global, Chinese brands are really good with data and deriving consumer insights and needs from big data. And they are really fast about it.
RiA: What are the challenges C-beauty brands are facing when they decide to go global?
Lisa: This is definitely not an easy task, and the Western beauty market has definitely not been sleeping!
I think on a very operational level, one of the big challenges is to actually get into the retail channels as they are already very established and saturated. One chance that I see, may be the growing e-commerce and social commerce market especially with TikTok being so successful globally. I feel the choice of shopping online has become much more popular due to COVID.
Another aspect where I feel will be challenging is the branding part, in order to translate brand values, beauty standards and being desirable to a completely different consumer profile requires a lot of understanding of the local culture and way of thinking. And this is not something that can be learned quickly, however, such insights and understanding are so crucial for content creation and social media.
RiA: How does GĒNLAB support C-beauty brands in their international expansion?
Lisa: What makes GĒNLAB unique is that we position ourselves as the ‘Brand GM’ for our partnering brands in foreign countries. It takes so much to establish a brand in a foreign market so that it won’t work if we would only be responsible for one aspect of the business in a local country, i.e. just sales or just e-commerce or just marketing. In order to make a brand successful, it is crucial to have a holistic strategy but also pay attention to detail.
RiA: What are the challenges you faced when you decided to start your journey as an entrepreneur?
Lisa: Oh there were so many! But one of my biggest learnings and appreciation is definitely for the team! Constantly building something new and re-inventing ourselves is key in today’s fast changing market. Especially in the beauty industry that evolves at a crazy speed.
Finding talents that are as passionate and enthusiastic about beauty and branding is one of the biggest assets for the company but also a challenging task. But I truly believe in putting people first – when it comes to company management, it is the team, and when it comes to brand management, it is our consumers.
RiA: What’s next for GĒNLAB?
Lisa: At this point we will follow our mission to incubate beauty brands, mainly through new business models. Today, it is not enough anymore to put a product on the shelf. It requires so much more detail, heart and strategy to establish a brand in a new market and unfortunately, there is no ‘one-size-fits-all’ road to market. This is true for global brands coming to China, but also Chinese brands going global.