E-commerce in China
Three questions for Hagen Wuelferth, Chief Digital Officer of L’Oréal China.
How does ecommerce fit into omnichannel retail strategy of L’Oréal China?
At L’Oréal, the consumer comes first, which is why we have crafted a set of digital consumer centric strategies for all of our brands. The Chinese consumer is becoming more and more sophisticated and living in what you could describe as a “phygital” world. In this world, the boundaries between physical and digital are blurry. She can start a decision journey basically anywhere, whether it is online or offline. For this reason, our unique love brands are finding new ways to connect with our consumers by creating O+O consumer experiences or online and offline experiences that are breaking physical and digital boundaries. For example, you could be booking online services and redeeming them offline or buying online in offline public stores. In any case, e-commerce and the integration of online and offline are becoming pivotal for our continued success in China and indeed we have been the leaders in this field. For example, last year in 2017, more than one quarter of our sales in China were online.
What are the main drivers for Chinese people to buy beauty products in ecommerce channels?
Ecommerce is really disrupting beauty in China rapidly and we’re riding the wave of change! China’s total ecommerce in fact has already grown by a factor of 100 over the past 10 years and has surpassed the total of the US and Western Europe combined. What’s more? Is that in beauty actually over 90% of ecommerce is through mobile phones and not PCs which means China is basically mobile only.
There are both demand side and supply side reasons to explain this phenomenon why Chinese people are actually buying online. On the supply side to start off with: China exhibits truly innovative consumer centric Internet players who have formed an ecosystem with strong logistics that can deliver cheaply and rapidly, often within just several hours. This has helped to deepen penetration reach even to lower-tier cities and region. And we are partnering closely with these kind of players in order to strengthen and fulfill our vision of beauty for all.
Moreover, on the demand side, it is especially the younger consumers who we find that are digitally savvy and who really have a strong beauty affinity and growing spending power. They tend to spend about one or one and a half hours more on their mobile than their counterparts in the United States and for them, ecommerce is often the channel of choice for various reasons. In my opinion, perhaps the most prominent one, is when ecommerce provides an exciting retailtainment experience. And we, L’Oréal, we are the leaders in this field for beauty providing immersive content from our aspirational brands in many ways such as live broadcasts, virtual makeup try-ons, augmented reality games, AI power personalization and many more.
Double Eleven was a phenomenal success for L’Oréal in China, how can you explain this phenomenon?
We feel deeply honored that millions of consumers across China chose to celebrate China’s Singles Day on November 11th with us. In fact, we were the number one beauty group on multiple platforms on Double Eleven such as Alibaba’s T-Mall or JD.com.
On Alibaba’s T-Mall, we beat our 2016 record in just 1 hour and 8 minutes and we served around 5 million orders in just one day. If I had to highlight 3 factors that contributed to this success:
First of all I would mention that we have built the most aspirational love brands and innovative products.
Second, we have also created breakthrough consumer experiences in many ways that delivered a retailtainment to make Double Eleven a really fun and engaging day as such a shopping festival for our consumers. We did this in many ways for our portfolio brands, for example, for L’Oréal Paris and Balmain’s limited edition of lipsticks, we brought the Paris Fashion Week to Chinese consumers through a 360-degree live broadcast. Wherever you were, through virtual reality on your phone you were suddenly immersed on the Champs-Elysées in Paris, standing in front of the catwalk and when you rotated your phone you could see the people standing beside you in Paris in real time. Another thing we did was that we extended the Double Eleven online sales festival to offline as well. For example, 6 of our brands had setup popup stores offline with virtual magic mirrors and other innovations.
Third, we have highly energized teams with a very diverse tone of mix. For Double Eleven, we mobilized our teams all across the country from Shanghai to Guangzhou to fight together for our consumers. For me personally, it’s really a true pleasure and privilege that I got the chance to work with these best people here everyday, as we together invent beauty in China to help with Sharing Beauty with All.
Thank you very much!
