Cosmetics giants brush off any talk of slump in China

Shiseido has also recently expanded its sales channels into specialty cosmetics stores that are more popular in lower-tier Chinese cities, selling mostly its Urara and Pure&Mild brands.

It now has contracts with more than 5,900 stores.

"It gives us a convenient way to have contact with consumers, especially in smaller cities," Yang added.

"I think one very important concept that can explain the success of a brand regardless of its origin, is its sales channel strategy.

"Currently, the bulk of our sales are still being made in department stores or retail outlets such as Sephora.

"Asian brands are more focused on all-natural products that enhance appearance, for example, with hydrating lotions or skin-whitening creams, which are very attractive to younger consumers in the 15-30 age group who are less focused on maintaining their youthful appearance."

But Mary Kay, the direct cosmetics seller, takes a different approach to building sales in China.

It emphasizes customer service instead of simply expanding sales channels.

"We are arriving in homes to provide a service for each customer," said Paul Mak, president of Mary Kay in China.

"Faced with the burgeoning online retail market, we are competing with other companies on the one-to-one, face-to-face basis."

Mary Kay established its first overseas factory in Hangzhou, Zhejiang province, in 1995.

It is now working on the second phase of its manufacturing center in the city, believing that China will surpass the US to become its biggest market next year.

Mak said that China has become Mary Kay's largest overseas market, adding that its sales force is crucial to its direct sales.

The company's sales volume in China increased 55-fold between 1999 and 2011 and its workforce tripled.

Though it is sticking to its direct sales channel and developing the strengths of its salespeople, it is also introducing innovative products to the market.

"Targeting big cities, we launched the higher-end product line TimeWise Plus in July, as we realized that consumers in Beijing and Shanghai are paying more attention to premium goods as they trade up and enjoy higher incomes," Mak said.

In smaller cities, Mary Kay's marketing strategy sees it sending out distinctive fleets of pink buses to introduce its product lines to consumers, which allow them to try out the products onboard.

Wang Jiajun from China Market Research Group said customer service remains crucial to the cosmetics industry,

He added that a big part of that involves staff training, and that cosmetics giants need to train their salespeople, or beauty assistants, in how to recommend products, and push sales.

"Many purchases are still impulse purchases, and many consumers want to learn more about products," he added. "They will simply walk away if staff cannot inform them."

Xu Junqian contributed to this story.

yaojing@chinadaily.com.cn

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