Beauty and the East

Olivier Auroy on why Western companies need to learn the language of Eastern beauty.

As the financial crisis continues to test the Western world, big beauty brands are investing more in the emerging markets of the East. Beauty companies such as Beiersdorf, L’Oréal, Nivea and P&G are setting their eyes on the promising BRIC (Brazil, Russia, India and China) market and its Asian neighbours.

We cannot blame them. The research company Euromonitor revealed that by 2014 BRIC will account for over half of the anticipated $43 billion growth in the global beauty industry. India’s cosmetic market is growing at an annual rate of 15-20%, which is as fast as the US and European markets. In India and China this is largely due to the emergence of a wealthier middle class and the rise of a young urban elite population.

A decade ago, farmers made up over 60% of China’s total population; today, this figure is around 30%. The exponential growth of cities like Shanghai has forced brands to adapt to these markets. Recently, Estée Lauder opened a research centre in Shanghai to create products tailored to the needs of Chinese and Asian skin types. The French cosmetics company, L’Occitane, is also moving fast and has opened 60 new stores within a year in the BRIC countries.

The success of beauty brands in the East is bolstered by the fact that consumers tend to spend more willingly on brands they trust. However, this is not enough. Well known brands advertising on main street billboards will not do the trick. The message from India and China is clear: “Don’t sell us what you think is good enough, give us what we need, give us the best.”

In the Kingdom of Beauty, the princesses have changed. The faces of beauty now come from the East. On the red carpet of the Cannes Film Festival, stars from the Orient such as Aishwarya Rai, Freida Pinto, Gong Li or Zhang Zilin are redefining the paradigms of international glamour. Coming from a different culture, proudly representing the women of their country, they are showing beauty brands a different approach to beauty and personal care. In a recent interview, Meesha Shafi, the ambassador for L’Oréal in Pakistan, said that for her beauty was defined by “grace and dignity”.

Her comment, reminded me of my past branding assignment for Pakistan International Airlines’ (PIA) business class experience, where we questioned the apparent ‘sadness’ of the air hostesses.

A senior PIA marketing executive told me: “In Pakistan, beauty does not smile.” I guess that in Brazil, the definition of beauty would be different as well.

This presents an important challenge for international cosmetics companies. How can you convince local consumers that your brands suit their needs? Why would they trust you more than local products?

L’Oréal’s success story in India offers a good example of how brands should approach emerging markets. When L’Oréal’s Professional Products Division decided to enter India in the late 90s, the hairdressing industry was not well developed. There was little education and training. Hairdressers only used domestic brands or prohibitively expensive foreign ones. In response, L’Oréal invested massively in hairdressing education and training. Today, L’Oréal has a presence in the top 100 cities of India and Indian consumers buy its products to take the salon experience home.

What do these stories tell us? They prove that cosmetics brands need to do their fieldwork and translate this into a more customised approach. Beauty products can no longer be marketed on the basis of catchy slogans or flashy in-store promotions. Brands must engage with consumers on a higher level of intimacy. Consumers of beauty products want to get closer to the brands through a relationship that is being defined by new channels of communication. We could summarise this by saying that consumers want to explore online and experience in-store and emerging markets are no exception.

Recent events in the Arab world have shown the power of social media. I always like to remind people that in a country like Afghanistan there are over 200,000 people on Facebook. For such countries the web is a window to the outside world and an opportunity to be exposed to new ideas and products. Cosmetics brands have understood that the web is emerging as one of the most important touch points in the customer journey. The mission of these companies is to create an interactive beauty care experience, using both real and virtual platforms, and the more innovative the brands are, the greater their point of differentiation from their direct competition.

Mobile phone applications, for example, are becoming extremely important. L’Oréal has released an ‘instant beauty’ app which allows consumers to scan the barcodes of brands and access reviews and tips on how to use products as well as any type of makeup advice. Try-before-you-buy apps are an essential part of the beauty care customer’s journey. Many studies have shown that consumers use the web extensively to check and explore; going on YouTube has become a reflex, like flipping though a dictionary or calling a friend for advice. Consumers inquire, evaluate, and investigate, before testing and experiencing. This is where the in-store experience becomes extremely important.

The new generation of consumers is more ‘touchy-feely’. They need to interact. This is even more relevant in emerging countries where there is a strong retail presence. In the UAE, shopping malls are more than points of sale; they drive the lifestyle. Therefore, going to the shop and trying the product is a must. Beauty care spaces in major department stores such as Harvey Nichols and Debenhams continue to be successful, despite the crisis. Visiting those spaces and trying the products are the main pastimes of most residents and tourists.

All brands offer their consumers more opportunities to try and ‘live’ the brand; the times of ‘watch but don’t touch’ are over. Recently, in Pakistan, L’Oréal Paris announced a new series of interactive expert mall experiences. In cities like Karachi or Lahore, visitors could enjoy personalised skin consultations or benefit from makeover services by expert cosmetologists. For L’Oréal and its brand Revitalift, this type of approach offers a special ‘rendezvous’, a chance to meet consumers and get their attention. As for consumers, these interactions leave them feeling unique and pampered.

The biggest cosmetics brands in the world have understood that consumers in emerging markets want dialogue and customisation. Every skin type is different and the philosophy of beauty has nothing to do with Western models. That’s a fact. But brands have a role to play in educating and training this new generation of consumers. Learn who you are, understand what you need. The canons of beauty have evolved. But something has not changed: revealing one’s beauty is an art. In that quest, cosmetics brands are the masters. As Confucius said: “Everything has beauty, but not everyone sees it.”

Olivier Auroy is Managing Director, Fitch Middle East. olivier.auroy@gsfitch.com

First published in the September-October 2011 issue of Aurora.