NEW YORK/BEIJING: Estée Lauder, which last week reported sales in China went up 40% in the fourth financial quarter, has attributed much of its success to its efforts on Tmall, where the beauty company’s brands have established a number of stores.
Over the year, growth in China was up 19% and online sales almost doubled. But the fourth quarter delivered “outstanding growth”, noted CEO Fabrizio Freda during an earnings call. It was in those three months that the MAC brand was launched on Tmall, “and it was the platform’s largest prestige beauty launch”.
Estée Lauder also claimed to have been the top prestige beauty company on Tmall for last year’s Singles’ Day.
“Tmall is where our brands shine,” Dennis McEniry, President of ELC Online, told Digiday. “We control our sales in Tmall – the storefronts are branded, we do the creative, merchandising, marketing, traffic driving, etc.
“The dedicated e-commerce team in China handles all of that, and we have the control over those storefronts in a way that lets us present our brands in a prestige way.”
The company also runs separate e-commerce sites for its top three brands – Clinique, Estée Lauder and MAC – which include localised shipping offers, marketing campaigns and payment via Alipay. But, in common with other upmarket and luxury brands, which have tended to avoid China’s online marketplaces because of the presence of counterfeit goods, they are going where most customers are shopping – on the likes of Tmall and JD.com
Having branded storefronts, McEniry suggested, eases consumer concerns about counterfeit goods. In the past, Alibaba, owner of Tmall, has been sued by luxury brands which have accused it of profiting from the sale of goods that infringe trademark laws, but it has acted to reassure brands that its online marketplaces are safe from counterfeiters, recently unveiling several significant enhancements to its Intellectual Property Protection (IPP) Platform at its Brand Holders Day.
“We look for brand-building distribution, with partners that exercise key drivers of prestige beauty, including High-Touch services [the company’s personalised advice],” explained Freda. “So we distribute to channels to where those standards are fully respected, like Tmall.”
Data sourced from Digiday, Seeking Alpha; additional content by WARC staff