Case Study
In particular, in 2005, the brand ranked first in sales, and in 2006, it took third place in sales as a stand-alone brand, continuing to show good growth. The Face Shop was founded in December 2003 and has designed all of its products, packaging, and store decorations with natural ingredients under the core concept of “The Story of Nature.” Since its inception, The Face Shop has succeeded in delivering high-quality naturalistic cosmetics at a competitive price. Additionally, it has succeeded in introducing the boutique idea and enhancing the distribution system, integrating quality, service, and cost. Since LG Lifestyle Health acquired it in 2010, the company has experienced rapid growth with a 20% annual growth rate, holding its position as Korea’s top single-brand specialty shop from 2011 to 2015. This growth has been attributed to the company’s decisive distribution innovation and innovative marketing strategies. The Face Shop began doing business in China in 2006 and today has more than 250 locations. The corporation actively began to extend its operations in China after the establishment of a Sino-Korean joint venture in 2013. Among other items, “Baek Ginseng Collagen Pearl Essence Cream,” the anti-aging series “The Therapy,” and “CC Cream,” the emblematic item of Korean beauty, are well-liked by Chinese consumers. All products have an average price range of $30 to $100, which is mid-range and frequently advertised with 25% off deals, making the pricing more tolerable. The Face Shop has recently concentrated on growing its online business, establishing a direct flagship location on Alibaba’s Tmall, and actively partnering with e-commerce networks like Jumei and VIP for cooperative marketing.
Strategy to enter Chinese Market
(1) Offline to online marketing The Face Shop began an offline commerce marketing plan with Tmall, the mall of China’s largest e-commerce business Alibaba, in February 2016 over the Chinese New Year period in order to target Chinese tourists, a crucial demographic for consumers of cosmetics. The Face Shop, a Korean cosmetics company, performed an O2O marketing campaign with Alibaba for the first time ever in the sector. The significant number of travelers visiting the Face Shop Myeongdong store, where the majority of the employees speak Chinese and other languages, is due to the fact that Myeongdong is one of the most well-liked shopping districts for Chinese tourists. Eleven stores in Seoul’s main shopping areas, including Myeongdong, Hongdae, Sinchon, and Dongdaemun, give Chinese clients special discounts on their purchases. For instance, when Chinese consumers scan the QR code in the store and sign up for the Face Shop Tmall flagship shop, they will all receive a free 3-piece set of “The Therapy” products worth the equivalent of 10,000 KRW. Additionally, the CRM campaign for the China market is still going strong with a variety of offers, like member discounts at the Face Shop’s Tmall flagship store. In order to concentrate on the Chinese market, The Face Shop is getting ready to launch a shop-in-shop model and a direct website for the internet reverse direct shopping group.
- New product introductions The Face Shop and Jumei, a popular beauty site, collaborated to present a limited-edition collection of their adorable The Face Shop and Kakao Friends crossover collection on August 2012. To introduce the new items and advance the marketing campaign, more than 100 members of the Chinese media and internet celebrities were invited. The W Hotel on Chang’an Street, in the center of the city, hosted the launch ceremony. It had a lemon yellow color scheme with cute and funny Kakao Friends pictures that appeared in numerous parts, including a photo booth, a trial area, and a product showcase. In order to develop a limited edition product line and introduce the new products, the event was staged in partnership with Kakao Friends, one of the most well-known cartoon characters in Korea. This helped to immediately attract the public’s attention. The Face Shop has finally succeeded in reaching Chinese consumers by actively utilizing two marketing tools: media platforms and online celebrities.
- Marketing for KOL
The key phrase in Chinese advertising and online commerce right now is, obviously, which the term “internet celebrity,” or “KOL,” refers to a person who has gained popularity online and is followed by internet users. Millions of 20 to 30-year-olds follow netizens online, and they have significant marketing influence in a variety of industries, including fashion and cosmetics. The KOL sector, which includes e-commerce, advertising, paid content, and services, reportedly reached RMB 100 billion in 2016 and is expected to grow at a CAGR of 29.4% from 2015 to 2018. This information comes from a 2016 research report on China’s webcast industry. Three things make KOL marketing advantageous: it is simple to increase brand awareness; it does not easily adapt in response to changes in Chinese policy; and it directly affects sales growth. Because its admirers will eventually become potential customers, the beauty business has recently concentrated on KOL marketing. KOL marketing is more influential than TV advertising, according to William Lauder, president of the global cosmetics business Asterisk, while discussing the possibilities of the KOL economy. Five internet personalities, including “Little Black” and “Little Piggy,” who each have more than one million Weibo followers, were invited to the Therapy beauty concert in April 2016. The event and its content were live-tweeted by the five celebrities, earning The Face Shop posts more than 2 million views. The Face Shop will secure its position in the Chinese market in the future by concentrating on online marketing, particularly “viral marketing,” which aggressively utilizes netizens.
Reflections:
The Face shop is advocated to be healthy, beautiful and refreshing as its co-value, and pursuing the natural lifestyle of its cosmetic products. However, in the marketing campaign, it is less focused on the promotion of its ingredients while more focuses on the channels of sales cooperation.