New cosmetics shops bucking virtual trend

 [Photo provided to China Daily]

Youth-oriented brick-and-mortar makeup venues show that being there still matters

During the past year when brick-and-mortar stores of all sorts were having a difficult time, newly emerged offline makeup collection stores sustained their rapid expansion in spite of the pandemic.

By January 2020, Shenzhen, Guangdong province-based The Colorist, had opened more than 50 stores in 20 cities across China.

Guangzhou-based Wow Colour established nearly 300 offline stores throughout 2020.

H.E.A.T, also based in Guangdong's capital city, had its finger on the fast-forward button as well of late. Between July 2020 and December 2020, it opened nine brick-and-mortar stores, with average monthly sales revenue surpassing 800,000 yuan ($123,040).

The growth was achieved despite the overall downward trend of China's cosmetics sector. According to a report by management consulting firm McKinsey& Co, February 2020 sales revenue of China's cosmetics and personal care sector dropped by 80 percent year-on-year.

"Many offline stores and commission agents said that the pandemic had inflicted heavy losses on traditional physical cosmetics stores. Self-employed sector participants saw many closures, while most of the traditional chain stores canceled expansion plans. In contrast, the quick expansion of new makeup stores during the pandemic period demonstrated boldness," said a market research report from cbo.cn, a Wuhan, Hubei province-based cosmetics industry news portal.

And the expansion of new players proved to be a success. In September and October 2019, customer volume at new stores of The Colorist in Shenzhen and Guangzhou each surpassed 14,000 on opening day, with people visiting the stores lined up.

On Jan 15, 2020, the day that the first store of The Colorist in Beijing cut the ribbon, daily sales revenue surpassed 200,000 yuan.

Before the opening of The Colorist store in Guangzhou's OneLink Walk shopping mall, Cecilia Chen, a 26-year-old office clerk, had been planning to visit the store for days.

"On opening day, my friend and I arrived at the shopping mall at 9:40 am, 20 minutes earlier than its opening time, just to squeeze into the first batch of visitors to the store," said Chen.

When they arrived, they found that the shopping experience was worth the wait, she recalled.

[Photo provided to China Daily]

"Inside the store, there was a collection of hundreds of cosmetics brands, including Japanese, South Korean and Thai names. I no longer need to shop overseas, and the prices are quite reasonable,"Chen said.

"Besides, the store itself is like a wonderland," she added.

The lighting and layout immersed them in a pleasant atmosphere.

"Checking out the dazzling goods, trying on makeup, discussing with my friend about what to buy and finally making decisions－my whole shopping experience was amazing," Chen said.

Despite contagion challenges affecting physical stores, one expert weighed in on how new makeup shops are still managing to prosper.

Huang Cuifen, an analyst at online cosmetics portal mztoutiao.com, said that apart from the decorations, store employees also provide visitors with a comfortable shopping experience.

"Unlike traditional cosmetics stores, shop assistants in the new ones don't oversell the products. Normally, they don't actively approach customers, leaving them enough space and liberty to make their own decisions," Huang said.

"I feel comfortable with self-service shopping experience. We had a great time in the cosmetics collection store, where we could try as many colors of lipstick and eyeshadow as we liked and gave each other advice. The shop assistants didn't bother us. They only approached when requested," Chen said.

In addition, Huang said that new makeup collection stores specifically target millennials and Generation Z customers, deploying precise marketing strategies.

For example, stores like The Colorist, Wow Colour and H.E.A.T tend to use bright and bold colors, trying to catch youthful eyes.

Meanwhile, Beijing-based makeup store Harmay adopts a minimalist industrial style in its decor, shaping its own unique characteristics to attract young consumers who are pursuing novelty and independence.

Furthermore, taking advantage of star power appeal, The Colorist signed on Chinese Gen Z rapper Wang Linkai to be its celebrity spokesman.

"Consumers who visit the offline store and post pictures online can get a poster of Wang. As a super fan of the male hip hop artist, there is no reason for me to refuse to visit," said Liu Yan, a 22-year-old college student who paid a visit to The Colorist's store in Wuhan and received a free poster.

"New makeup collection stores are good at keeping up with youth demand, accumulating deep insight into their preferences and totally debunking the trope that 'e-commerce is overtaking physical stores'," analyst Huang said.

Shi Qiwei, founder and CEO of H.E.A.T, believes offline consumption creates value, and that offline consumption is critical to brand upgrades and user experience enhancement.

"COVID-19 won't change the fact that offline retail enjoys rigid demand. Besides, the pandemic will eventually go away," Shi said.

[Photo provided to China Daily]

"This is why we are opening offline stores and putting efforts into the sector."

For the cosmetics sector, offline experiences are especially importable. According to a report issued by China Insights Consultancy, the country's retail cosmetic sales will surpass 450 billion yuan by 2023, with a compound annual growth rate of 11.6 percent. The retail market driven by the offline user experience still has great growth potential.

A Reuters survey showed that in 2019, although online cosmetics consumption expanded rapidly, 86 percent of those surveyed still preferred immersive offline shopping experiences, and brick-and-mortar retail was their first choice as they were able to see what the cosmetics really looked like and actually try them on.

Peng Yao, CEO of The Colorist, attributed the company's success to the integration of offline and online channels.

"While using bright and bold patches of color to bring consumers into physical stores, we apply online smart operation systems into our brand selection and supply chain management, warehousing and logistics to achieve higher operational efficiency," she said.

With their recent success, industry experts worry over whether new cosmetics collection stores will be able to retain traffic volume and maintain long-term development.

Wang Peng, an associate professor at Renmin University, said:"New makeup collection stores now doing well have first-mover advantages.

However, their business modes are easy to copy. Companies should think of how to further cultivate resources, raise brand recognition and leave a deeper impression on consumers. They may try out methods to better reach young consumers, like digital marketing, group buying and cosmetics blind boxes, said Wang. "Related resources and a professional team are needed to better promote brands more broadly and deeply, and make brands distinguishable from rivals," Wang added.

Source: www.chinadaily.com.cn