How to become a market leader in China in 4 years

The last four and half years have seen the rise from nothing of a new cosmetic beauty market leader in China. Perfect Diary captured Gen Z’s attention quickly and became the leader of online sales in cosmetics.

How did it manage to do so? 

The first ingredient was to understand its target market: the famous Gen Z everybody writes and talks about. This generation, as it is abundantly documented, is a generation that wants to explore the many possibilities beauty offers.

Gen Z doesn’t buy into the concept of a unique standardized vision of beauty that society sometimes tries to impose on women.

Perfect Diary understood this and delivered this message in the right tone to a younger target audience. Unlike Dove in China, it didn’t make serious militant campaigns promoting diversity in beauty with its global self-esteem concept. On the contrary, it made light, playful campaigns and collaborations with unexpected brands such as Discovery and the British Museum, the Met, and so forth. Their approach was spot on, art and nature being two of Gen Z’s key interests. 

These collaborations were also the opportunity to launch new innovative trendy products such as the eye-shadow series for the Discovery Channel collaboration, which attracted attention and got people talking. The 12 shades eye-shadow palette inspired by wild animals played perfectly on the taste for uniqueness of the Gen Z target. It sold out on Tmall the day it launched and quickly became the category number one seller.

These collaborations for product launches are also the opportunity to nourish the image of a high-profile brand. A result of a series of events regularly organized every two to three months and combining creative themes and a very appealing spokesperson, generally males (a preference for this target group). Together with premium packaging, these collaborations allow Perfect Diary to sell itself as a brand with all the qualities of a hot premium brand, only five times cheaper than Estée Lauder or Lanc?me.

Price combined with a premium image is a key factor behind Perfect Diary’s success. Cutting margins is always an option in a highly profitable category.

Another key reason for this success was the particular use of digital media. Perfect Diary is permanently present on the platforms where its target market gathers: Douyin, Bilibili, Weibo, and the Red. The Red was key. Rather than using top KOLs whose data and efficiency can be sometimes questionable, it chose to go for quantity and stickiness. Perfect Diary focused on medium-size KOLs, which often have a more loyal follower base and ordinary users to surround the consumer with notes. The conviction process was as follows: attract attention with a star colour and get KOLs and KOCs to test the colour to generate the will to buy, be it in an article or even better in a video. This is where the sale takes place these days.

The buying process’s experience step is by far the most important in the decision making, whether it be an experience in a physical store or a digital one.

Make-up tutorial videos on Bilibili complemented its presence on Red. Bilibili offers the advantage of being the favourite platform of Gen Z, with high fan loyalty and the ideal place for affordable brands.

Beauty Diary leveraged Douyin with a combination of generic KOLs for brand exposure and smaller beauty and make-up KOLs for product evaluation, colour testing, and direct selling. This combination of KOLs allowed to build both the brand and stimulate sales in parallel.

The integration of e-commerce was also crucial. E-commerce is always embedded in any marketing action Perfect Diary undertakes. Almost all articles and videos drive traffic to an e-store, whether on WeChat, Douyin, Red, or Weibo. Brand building and sales are constantly combined.

One last thing that became key as success started building up was the approach to the private domain. It isn’t a secret in China that the cost of marketing in the public domain (inside the platforms) is high. It is vital to channel public traffic into private traffic that is free (i.e., on the media that you own), such as an official WeChat account. 

Brands often make the mistake of spending a lot of money on advertising to recruit followers and try to convert them into buyers.

Perfect Diary saw official accounts for what they are: tools to build loyalty and generate repurchasing.

This is why it only focused on recruiting buyers from marketplaces by adding a promotional card with every purchase, incentivizing them to join its official account with “lucky” money. This allowed Perfect Diary to recruit followers at a fairly low cost. 

Nevertheless, another barrier needed to be lifted. WeChat official accounts show some limitations, and as years go by, consumers often lose interest in them as they are not personal enough and lack interactivity. Perfect Diary overcame that barrier by offering followers to follow the official account as well as a personal account called Xiaowanzi.

Xiaowanzi is a virtual imaginary KOC with a personality close to the Perfect Diary target: lively, positive, beautifully dressed, and with many hobbies. Personal accounts have a reduced number of people and allow interactivity which allowed Perfect Diary to engage in a conversation with its customers in a friendly personal way. Xiaowanzi provides information on products, tips, customer service, and exclusive promotions based on the group’s interests. Today Perfect Diary has hundreds of personal accounts with no more than 3,000 members, each managed by one person.

To sum it up, seven ingredients were key to Perfect Diary’s success:

1. A deep understanding of the Gen Z target market,
2. An original positioning as a high-profile brand at a low price,
3. Buzz products,
4. Collaborations,
5. Clever use of digital media and KOLs all across the consumer journey and particularly during the experience phase where it matters most,
6. A permanent integration of e-commerce, and
7. An innovative, cost-effective, interactive and personal approach of the private domain.

If you're interested to learn more about E-Commerce and consumer insights in China, check out our Full Jet Webinars. Our latest Episode covers an overview of E-commerce strategies in China focused on how public and private traffic can complement each other to help you tackle the challenging and competitive Chinese e-commerce ecosystem.

To tune into this episode featuring Aurélien Rigart, Co-founder and VP of IT Consultis, you can go here.

To continue sharing our knowledge with as many people as possible, this and all future episodes will be in English and continue featuring guest experts on each topic.