As China retail and e-commerce rebound from the pandemic, it is clear that retailers are returning to a much-changed landscape, prompting some to reconsider their value propositions. Prior to the shutdown, research on digitally native Chinese brands discovered that even market leaders sometimes struggled to create multi-dimensional value propositions, particularly in some sectors like beauty.

Here we found that the market’s singular focus on visual marketing for eCommerce resulted in a plethora of products that were beautiful, but lacked depth. For instance, for some cosmetics, this has meant that smell has been overlooked in the quest for striking primary and secondary packaging. Some have sought to enrich their brand associations with licensing agreements, as Perfect Diary did with the Discovery Channel for colour palettes.

There are thus opportunities in the market for differentiated products with both striking form and functional excellence. As a result, there is a trend, and an opening for suppliers to go beyond their traditional expertise in product development, to engage in sophisticated marketing to generate an emotional response in the consumer, whether for other brands or for direct to consumer. This hypothesis is now being tested within a business unit of the Fung Group.
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Tags: Business Practices , Competitive Intelligence , Market Analysis , Strategy