China Market Becoming a "Sweet Pie"

On August 18th, the high-end Japanese brand Tatcha announced it has officially launched on the Tmall International, which means it has officially entered the China market.
On the same day, at a private conference "Meeting Classic, Forever Beauty" held in Shanghai, Tatcha stated that it will attach great importance to the China market and maintain close relationships with consumers in China.  Consumers will be able to experience Tatcha's classic Japanese skin care theory, balancing and healing the skin, body and mind.

Headquartered in the United States, Tatcha launched its products internationally in 2009. It enjoys a good reputation among overseas consumers for its classic Japanese skin care theory and rejuvenated skin care effects.

On its 10th anniversary, the emerging brand Tatcha chose to enter the China market, illustrating the potential the market holds.  The decision to select TMall International as the way in, shows its understanding of the China’s market.
Currently, Tatcha has a total of 20 products on Tmall International, including hot items such as makeup remover, cleanser, foundation primer, and plans to release a variety of new products and exclusive customized gift boxes during this 11.11 shopping festival.
In recent years, especially starting this year, more and more overseas niche beauty brands like Tatcha have begun to target the China market and are seeking new opportunities online to enter China quickly, including Fenty Beauty、Sunday Riley、Natasha Denona、Farmacy etc.
Data shows the retail sales of cosmetics in China fell by more than 10% in the first quarter of 2020, but after the epidemic was effectively under control, growth resumed in April, increasing by 3.5% year-on-year, or about 24.4 billion RMB. Since then, the China beauty industry is well on its recovery.

According to the report, the impact of the epidemic on the global beauty industry released by McKinsey in May, global cosmetics sales in the second quarter decreased by approximately 50% compared to the same period last year. It is expected that the annual sales will continue to fall in the range of 20% to 30%.

During the epidemic, the risk management of the China beauty market surpassed nations worldwide. Consumption power also took the lead compared to foreign markets. Since then, the China market has become the solution for many brands to promote their business.

In addition, with the increased purchase of imported beauty products by Chinese consumers and the rise of consumption power in China due to its population, China’s market on the global stage is once again being highlighted as an important strategic move. 

Therefore, cosmetics’ market worldwide, which has suffered tremendously from the pandemic, urgently needs to expand into China.  Variety of overseas brands are more willing to invest in the China market and look for new development opportunities. What’s more is that these overseas cosmetics brands can often quickly gain consumers’ trust with their high-quality products and emerging brand concepts.
The pandemic in 2020 has put traveling on restriction and caused many borders to be closed.  Chinese consumers being a major influence on the global cosmetics market were not able to go abroad on purchasing sprees, causing many foreign brands to take a big hit on their revenue and cash flow.

During the pandemic, buying habits of Chinese consumers took a U-turn, from being offline to totally online. Even as things returned to normal, online shopping is here to stay and the future will see a combination of online and offline co-existing. 
Thus, online international e-commerce has become the "pilot program" for overseas cosmetics brands to explore the China market and a new source of growth.
According to data from Tmall International, more than 120 overseas cosmetics brands entered the China market in 2019. On April 23, 2020, Tmall International also launched a "creation" project for imported cosmetics: Introduce 800 new overseas beauty brands in the next year and accelerate the introduction of overseas trending brands and niche brands.
The potential China market holds has gradually become the primary key market for international beauty companies. In the future, more international brands will enter the China market in the form of international e-commerce and traditional offline. Tatcha also revealed that it will enter the offline channels when the time is right.
Sources: Tmall International, McKinsey