Over the past year, top brands such as Fenty Beauty, Drunk Elephant, Huda Beauty, and others have entered the large, lucrative China market by launching on Alibaba’s Tmall Global e-commerce platform. What’s so special about this platform and why are beauty brands lining up to open stores on it? We take a deeper look at the channel and discuss why it’s become the definitive launching pad for new beauty brands in China.

Tmall Global, Cross-Border E-Commerce, and Beauty Brands

Tmall Global is a subsection of Tmall, Alibaba’s B2C e-commerce platform for brands to sell directly to consumers. Stores on Tmall (sometimes referred to Tmall Classic) typically require the brand to have a China corporate entity. That means they are either domestic Chinese brands or larger Fortune 500 brands with established China offices and teams in major cities like Shanghai, Beijing, and Guangzhou.

But in 2015, Alibaba created Tmall Global, which operates under cross-border e-commerce guidelines. These guidelines allow international brands to ship items across borders and directly to Chinese consumers without having to register a local Chinese entity or undergo lengthy product registration processes.

For beauty brands in particular, it enables them to avoid animal testing requirements designated for cosmetics products imported through general trade channels. This “loophole” also enables them to test the market without having to invest in a China presence and team, which can be prohibitive for smaller brands. This is why the likes of Drunk Elephant, Fenty Beauty, and Huda Beauty have all set up Tmall Global stores over the past year.

Cross-border e-commerce and cosmetics are a great fit for each other for a few main reasons:

• Cosmetics products are light, easy to ship, and relatively high-margin products, meaning that the added customs and logistics costs can be covered. Other categories such as, say, coconut water or juice are too heavy to ship across borders and their low unit prices often do not cover the logistics costs.
• Cosmetics items are also more visual and easier to market through videos and livestreaming sessions than, say, health supplements; it’s hard for an influencer to demonstrate just how effective a vitamin pill is through a video.
• Cosmetics products are standardized products. This is in contrast to apparel items which can have many different sizes and colors; customers typically want to try on apparel items before they make a purchase because the sizes can differ from brand to brand. But in cross-border e-commerce, they cannot do so, and the physical nature of not having warehouses in China make it much more difficult for brands to process returns.

These reasons are partly why that in April, Tmall Global announced that it will grow its beauty category by US$200 billion over the next five years, planning to recruit 800 new brands in the first year. Tmall Global plans to help 50 of these brands reach 10 million RMB (US$1.4 million) in annual revenues by the end of the inaugural year. Last year, the platform introduced more than 500 new foreign brands, of which 13 reached over 100 million RMB (US$14 million) in sales and 33 surpassed 10 million RMB (US$1.4 million) in sales.

Top Beauty Subcategories Selling on Tmall Global

What are some other top brands that have launched businesses on Tmall Global in recent years? Below we divide them into four emerging subcategories: celebrity beauty, Instagram beauty, science-backed beauty, and clean beauty.

Celebrity brands: KKW Beauty, Fenty Beauty, Kora Organics

Kim Kardashian’s KKW Beauty and Rihanna’s Fenty Beauty are some celebrity-backed brands that have launched on Tmall Global over the last year.

Kim Kardashian made headlines during Singles Day last year when she appeared on a livestreaming session with top influencer Viya to promote her KKW Beauty brand, selling out 15,000 bottles within minutes.

And in May, Fenty Beauty made headlines for launching a co-branded makeup line with Hey Tea, a popular cheese tea brand in China. The new line offers different shades of makeup based on the different fruit drinks that Hey Tea sells; such a partnership helps Fenty Beauty to better connect with China’s younger consumers.

A Fenty Beauty x HeyTea ad. Source: Sina Weibo

Celebrity Makeup Artist Brands: Charlotte Tilbury, Huda Beauty

Celebrity makeup artist brands such as Huda Kattan’s Huda Beauty and Charlotte Tilbury have also surged in popularity; Huda Beauty launched a Tmall Global store at the end of March to much fanfare and launched a “Spring Eye” makeup challenge on Weibo with top influencers to promote the store opening. Huda Beauty had been selling through multi-brand resellers and gray-market daigou sellers for quite some time, and demand for its New Nude palettes have become increasingly popular.

Charlotte Tilbury’s pop-up collaboration stores with experiential retail store chain Little B employ makeup artists who can give customers on-the-spot makeovers. Customers can choose celebrity looks.

Instagram Beauty Brands: ColourPop Cosmetics, Morphe, Anastasia Beverly Hills, Huda Beauty, Ofra

Instagram beauty brands have also become popular in China in recent years. Many China beauty influencers started off as students blogging about beauty products while they were studying abroad, and gradually migrated to local Chinese social media platforms such as Little Red Book when they returned home.

One popular brand has been ColourPop Cosmetics, which earlier this year launched a Chinese New Year collection of liquid lipstick and other products. This commitment to Chinese customers indicates just how important this demographic is to the brand, and helps to improve engagement.

Colourpop Cosmetics Lux Liquid Lipstick. Source: Colourpop Official Website

Science-Backed Beauty

Filorga, Martiderm, ISDIN, Sesderma, A.H.C.

Science-backed cosmetics, also known as dermaceuticals or cosmeceuticals, emphasize the efficacy of their ingredients in enhancing one’s skin. They oftentimes come with claims that the ingredients have been tested by doctors and scientists in labs in Switzerland or elsewhere in Europe.

This category has become increasingly popular as customers continue to conduct intensive product research before making their purchasing decisions. It’s common for customers to search for certain ingredients in Baidu or Tmall when they’re looking to buy a skincare product. Many brand pages on Tmall are chock full of diagrams that detail how certain ingredients infiltrate and enhance skin from within.

Colgate-owned French brand Filorga and ISDIN are some of the more well-known science-backed brands in China. Filorga has even established VIP spa treatment centers in Beijing to help convey the premium-ness of its products, which can be found on Tmall Global at prices ranging from 250-500 RMB (US$35-70). Such offline centers help to enhance the brand image.

A Filorga spa center in Beijing. Source: Official Filorga China website

Clean Beauty: Drunk Elephant, Antipodes, Aesop, Tatcha, Pixi

Clean beauty is a concept that is relatively new in China. There have been many product-quality scandals in which customers have been harmed by faulty or fake skincare products, and so now clean beauty is on an uptrend.

Historically Japanese beauty brands under the umbrellas of conglomerates Shiseido and Kao have benefited from an emphasis on natural ingredients. “J-beauty” typically emphasizes holistic living and enhancing one’s skin from within. This is in contrast to Western brands that may emphasize using makeup to cover up blemishes. However, this is starting to change.

Clean beauty brand Drunk Elephant launched a Tmall Global store in September. Like Fenty Beauty, Drunk Elephant also launched an offline presence in Hong Kong by partnering with Sephora. Founder Tiffany Masterson also made an appearance at the brand’s two-day launch event last year.

UK-based Pixi, which is known for its citrus-based skin toner products, also launched a Tmall Global store in partnership with cross-border e-commerce enabler Azoya in September of last year. The brand partnered with top influencer Austin Li to promote its products during a livestreaming session for Alibaba’s Double Twelve promotions in December, making it one of the top-selling toner brands in that month.

Key Takeaways

• Many global beauty brands such as Huda Beauty, Fenty Beauty, and Drunk Elephant are launching cross-border e-commerce stores on Tmall Global to enter the China market.
• Cross-border e-commerce guidelines for Tmall Global enables beauty brands to bypass animal testing requirements, which are a no-no for most cruelty-free brands.
• Thus far, four popular subcategories have emerged on Tmall Global: celebrity beauty brands, Instagram beauty brands, science-backed beauty brands, and clean beauty brands.

To learn more about Alibaba’s Tmall Global platform, download Azoya x BeautyMatter’s 54-page guide, Getting Started on Tmall Global. BeautyMatter readers will get an exclusive look into how the platform works, options for brands to get started, and how one can drive traffic and sales.