Facing fierce competition in the booming domestic market, newly emerging Chinese brands are keen to meet consumer demand and develop their products. In the past decade, products made in China have made their mark in the domestic market and are no longer viewed as being cheap or inferior to foreign brands. Florasis, a Chinese cosmetics company that has gained popularity among Chinese and overseas consumers in the past five years, is a good example of the makeover that has taken place among Chinese brands. The company was launched in 2017 in Hangzhou, capital of Zhejiang province, with the aim of reviving traditional Chinese aesthetics and cultural practices. It has since launched a series of signature products, including its etched lipsticks and loose powder containing floral infusions and Chinese herbs. Meng Huo, Vice President of Florasis, said that “the company targets female Asian consumers with a variety of cosmetics to suit their skin, match their preferences with medium- and high-end goods, and catch their attention with elements inspired by traditional Chinese culture.” In 2020, Florasis launched a set of lipsticks to celebrate Chinese Valentine’s Day. The lipsticks, designed in the shape of a lovelock, feature the romantic story of Zhang Bi, an official in the Western Han Dynasty.
Today, members of the new generation of consumers want items that reflect their culture, rather than the foreign heritage and exclusivity that have been so popular in the past. Such demand has resulted in the emergence of the guochao trend – the rise of domestic brands that include Chinese cultural elements in their design or branding. “We want to create a brand that balances art, nature and science through our traditional recipes – infusing them in modern formulations using the latest research and development technologies,” Meng said. Florasis keeps in direct touch with consumers through its live-streaming room and other online platforms, not only to sell products, but to learn the type of products that consumers are looking for. The company’s Florasis GEM Program works in conjunction with 200,000 consumers, who help choose the right items to bring to the market.
“It usually takes about 21 months to complete the research and development of a single item, which has to pass tests among at least 1,000 product testers before it can be put on the market,” Meng said. Florasis’ total transactions reached more than CNY100 million just one year after the opening of its Tmall flagship store in August 2017. Last year, the brand’s gross merchandise volume rose to CNY5.4 billion, up from CNY3.3 billion in 2020.
In March, Florasis launched China’s first color, material and finish (CMF) laboratory in the cosmetics industry to focus on researching the use of sustainable materials, the relationship between female skin characteristics and makeup color, as well as color trends in Chinese fashion. In 2019, Florasis began planning its overseas market due to increased demand from consumers living abroad for products that feature Chinese culture. The brand entered the Japanese market in March last year, and two months later, it launched its global website. In January, Florasis released part of a makeup series that features the 24 solar terms on the traditional Chinese calendar. The series highlights Chinese makeup characteristics such as thin and long eyebrows, under-eye makeup and cherry lips, integrating the different solar terms and floral characteristics into the makeup by combining the shape and color of flowers. “Our growing popularity overseas has given us the confidence to continue our research and development of products that feature unique Chinese culture in their design and raw materials,” Meng said.
To cash in on the guochao trend, numerous Chinese brands are entering the market to meet the increased demand. The number of Chinese brands on Douyin, the popular streaming platform, rose by 508% in the 11 months from April last year to March, with domestic brands comprising 92% of the top-sellers. On the Xiaohongshu lifestyle platform, where users also share life experiences, as of the end of last year, the number of domestic brands exceeded 78,000. Users have searched for such brands more than 1.2 billion times. In 2019, Alibaba launched the New Chinese Products Program, helping the annual sales of each of 134 domestic brands exceeding CNY1 billion on the Tmall e-commerce platform. In April 2020, Alibaba announced the New Chinese Products Plan 2020 by launching upgraded digital channels for domestic brands in fields such as store live-streaming, cross-border fashion shows, offline exhibitions, and new product research and development (R&D). The aim was to add three Chinese brands to each consumer’s shopping cart.
Chinese brands achieved rapid growth in 2020, according to the 2021 Chinese Brand Consumption Trend Report released by the JD Research Institute for Consumption and Industrial Development in May last year. These brands’ transaction volume rose by 6% year-on-year, there were 5% more Chinese brands in 2020 than in 2019, while the number of consumers rose by 18% year-on-year, according to the report. Domestic consumers consider five factors – identity, belonging, value, tradition, and security – when buying Chinese brands, the report added, as reported by the China Daily.
In 2019, the market share of Chinese brands on Alibaba’s retail platform reached 72%, according to the 2020 China Consumer Brand Development Report by AliResearch. The annual growth rate for pharmaceutical health products reached 38.5%, beauty and personal care products saw 36.7% growth, while the food industry witnessed annual expansion of 31.5%.
