Our interview with Mr. Daniel Chen, an highly adept and talented Manager that has a very privileged perspective insofar as he can foresee the future development of the Chinese Cosmetic Market… and not only that.
Beauteville is an amazing new town created from scratch to be the ideal location to design, manufacture and distribute cosmetics for the Chinese Market. It is located in the beating heart of China, Zhejiang province, near Huzhou, just 200 km west of Shanghai.
Its mission is to provide the best possible service to the Cosmetics industry, both professional and retail, and to do so they have opened up their operation in order to collaborate with international brands.
One of the most focused and knowledgeable managers of the whole Chinese Cosmetics Industry is Daniel Chen, General Manager of the China Beautéville Supply-Chain Platform.
Here is what he told EsteticaExport about the post-crisis situation in the Chinese market:
How is your company facing up to the unsettling consequences of the Coronavirus outbreak?
“We have already been back to work for around 2 months, after 3 weeks work-from-home during the most serious epidemic period. The biggest impact for us is that our retail business was suddenly closed down, especially the off-line business. The on-line business was also impacted due to delivery issues, but not to the same extent as offline. Now retailers are gradually reopening but stock levels in the trade are still high. In China, January and February represent the peak season for cosmetics because of the Chinese Spring Festival. Normally, retailers would keep the sufficient stock for the big sale. But now, after reopening, the focus of the retailer is on running heavy promotions to reduce the stock levels and protect cash flow. As a consequence, they are much more cautious when it comes to buying new products.
We are therefore working on the following:
1. Invest in more on-line activities like live-streaming to keep our communication with consumers alive;
2. Provide more promotional support for retail customers to help them reduce their stock levels;
3. Adjust our plans. We believe the consumer still needs new, creative, high-quality cosmetics products; what we can do now is to be well-prepared for the imminent recovery of the market.”
What kind of support are you expecting for your Company from the likes of Public Institutions, Media Companies and Events Organisers at this moment of need?
“As you know, we are the supply-chain platform in China Beauty Valley. Our core business is to provide the multi-channel solutions & professional brand management services for foreign brands with our deep knowledge/experience and broad market resources. I believe that institutions should keep providing industrial information, such as new trends, new technology, new material, new brands, new design…. Despite the present pandemic situation that makes it hard for us to meet face-to-face, at least we still can communicate via tele-conferencing with the brands for their China market plan. I also think now is a good time for us to slow down and perfect our plans. I also think we will all benefit from being ready for the coming recovery. We’d very much like to provide our knowledge of the Chinese market to any brand planning on coming to China.”
How do they think the international markets will change after this crisis? Will it ever be the same as before? Or will something change forever?
“In the short-term, the market will face the impact of decreasing sales, shortage of supplies due to transportation restrictions and increases in cost. I think everything could quickly recover if Coronavirus is kept well under control. virus. Competitiveness could also become more intense. The winners will be the brands that really can offer high quality products with something really innovative, at the same time, as being able to understand the local markets. Actually, in the Chinese market, such competitiveness is always there, even without the impact of Coronavirus.
The sale and marketing channels could be changed e.g. the on-line live-streaming model becomes more popular. During the lockdown periods, people have more time to test this purchase model, for some of them it will become a habit, because it helps them to make the purchase decision easier.”
Beauty Fairs as other big exhibitions around the world are rescheduling. Somebody is trying to reorganise the exhibition model in a digital way. Do you think this can become the new normal in the near future?
“Exhibitions on-line can help us to more quickly and easier exchange brands and the market information, but for a deep understanding and a detailed business plan, I think face-to-face meeting meetings are fundamental.”
