L2 Think Tank conducted a study to quantify the digital performance of 84 global and local beauty brands in China. Here, some of their key findings:

1. The Chinese beauty market grew 13% in 2013 to $26.4 billion, down from 17% growth in 2012. Global multinationals Procter & Gamble, L’Oréal and Shiseido dominated in 2012, but in 2013 Chinese and other Asian brands, including Amore Pacific, made an impact in the region. Domestic brands entered the luxury space, too, culminating in competitive pressure that forced Garnier and Revlon to cease operations in the region in 2013. In contrast, local beauty company Shanghai Jahwa expects operating profits to increase by 15% in 2014.

2. In 2012, online accounted for 20.1% of color sales, 7.2% of fragrance and 18.7% of skin care, significantly higher than in the U.S. About 67% of Chinese online shoppers purchase personal and beauty care products online, averaging 32 purchases a year and spending $184. The top three reasons Chinese beauty consumers shop online are for lower price, ease of shopping andthe ease in comparing product and price.

3. Tmall remains the dominant B2C channel in China, accounting for nearly half of market share. Beauty sales were $85 million on Tmall, up 61% from 2012. About 68% of the brands of L2’s index offer DTC e-commerce in China, on par with their U.S. counterparts. Without DTC, brands are more vulnerable to discounting via the gray market.

4. Mobile now accounts for 49% of beauty brand term searches on Baidu, a Chinese web services company. However, less than one third of beauty brands maintain a mobile optimized site.

5. Of the brand’s on L2’s index, Lancome, Estée lauder and Sephora are ranked gifted in China. The bottom three brands are Kenzo, Davidoff and Coréana.

6. Successful brand sites in China require local technology, language and content. More than half of global beauty brands do not host their brands in China, resulting in slower load times. Six global fragance brands do not maintain a Chinese language site.

7. China beauty sites lack basic functionality and content common in the U.S., resulting in higher than average bounce rates. Watching streaming video is the most popular activity for Chinese online shoppers but just 45% of beauty brands offer video content vs 81% in the US. Chinese consumers rely heavily on peer-to-peer recommendations and product reviews. Only 39% of brand sites offer user reviews and rating in China vs. 64 % in the U.S.

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