Unprecedented prosperity in cosmetics e-commerce

The improvement of life quality led to a rise in the demand for beauty and health care. Of the overwhelming demand, Cosmetics firms achieved the opportunity to launch their industry. In particular, the contribution of eCommerce has made a crucial step in the digital transformation of every industry, including cosmetics.

In an estimation made by CommonThread, the market size for cosmetics sold online is $483 billion in 2020 and expanded to $511 billion at a compound annual growth rate (CAGR) of 4.75 %. It is also speculated to exceed 716 billion USD by 2025 and reach 784.6 billion USD by 2027.

1. How eCommerce facilitates cosmetics firms?

Help them to keep up with the market trend

During the pandemic period, there was a drop in sales in many industries, including cosmetics. People have to diminish their social interactions while social distancing mechanisms are in effect.

The unpredicted changes of the pandemic sharply increase the need for skincare, hair care, and body care products to stabilize the insecurity inside people’s minds. 

Deploying eCommerce helps cosmetics businesses keep up with the market shift

Because people hardly can leave their houses, online shopping at the time had become a life savior for the purchasing demand of consumers. This change lay the foundation for eCommerce to bloom in other industries like fashion, grocery, wine, and even cosmetics.

The two above factors prove the promising potential of Cosmetics eCommerce. As a result, several cosmetic companies have swiftly implemented eCommerce for a revolution as well as sustainable growth in the long term.

Help to expand the business scale

Participating in eCommerce offers the cosmetics industry the opportunity to transition from traditional in-person sales to online sales, preventing a revenue standstill during pandemic-related crises. Additionally, in the age of digital transformation, creating a capable eCommerce website will enable businesses to appeal to customers who prefer online shopping.

Scale up the business by developing cosmetics eCommerce

Cosmetics is a highly competitive industry, so companies should not disregard the importance of launching online markets. Prominent examples such as Hasaki, LixiBox, Watsons, Guardian, etc,... have grabbed the trend early and currently rank top in cosmetic eCommerce.

Furthermore, the earlier a business develops its eCommerce, the more effectively its marketing activities will perform. This helps to broaden the economic opportunities for businesses.

Upgrade customers’ buying experience

All businessmen must notice customers’ purchasing experiences before building eCommerce websites, not just for the cosmetic industry. Thanks to the assistance of modern technologies such as 360-degree intuitive vision, virtual reality (VR), or augmented reality (AR) technology (AR), the purchasing procedure is processed swiftly and effectively and brings back satisfaction.

Building an eCommerce website to enhance customer’s online shopping experience

eCommerce helps businesses to save effort and time to adjust the customer experience by gathering, evaluating, and synthesizing the buying behavior of each target group. This is implemented with the features: Products have seen similar product recommendations, etc.

In addition, eCommerce provides clients with a seamless experience instead of an intuitive one across a variety of channels, such as social networks (Facebook, Instagram, Tiktok, Zalo, etc.), eCommerce platforms (Shopee, Laazada, Tiki, Sendo, etc.), eCommerce websites, mobile apps, etc.

2. The most outstanding eCommerce sites

Kylie Cosmetics

This is one of the most successful cosmetic brands that have a remarkable global media impact. Kylie is the youngest female millionaire in the US and has been applauded as a business genius on Forbe (a prominent publication) for her success in the cosmetics industry. When Kylie Cosmetics was established in 2015, it achieved an astonishing revenue of $ 420 million in its first 18 months. Her net sale is expected to reach $1 billion by 2022.

Besides the founder’s reputation, the business strategy of this firm is also to utilize the “gold mine” of eCommerce and launch social media marketing campaigns, which are the key factors that contribute to that bulk revenue.

In specific, the company used Shopify, specializing in creating websites for online retailers, to develop its eCommerce website. The website’s design is apparently clean and logical with its primary colors of pink and white. About the layout, this web focuses on demonstrating the company’s products. This is a part of Kylie Cosmetics’ business strategy, which includes releasing collections of cosmetic products like lipsticks, eyeshadow, and eyebrow pencils with limited design and stocks to appeal to customers’ FOMO effect (Fear of Missing Out). It is not surprising that Kylie’s new collections or cosmetics are continually “sold out” every time it is published because this is thought to be a very intelligent strategy of Kylie Cosmetics, completely different from other well-known cosmetic firms.

Kylie Cosmetics’ eCommerce website

Other social media platforms such as Instagram, Youtube, and Snapchat are also utilized to create content for branding and marketing activities and engage with a huge audience from these platforms before driving traffic to the eCommerce website and generating conversions.

Offline events also display the company’s creativity and innovation when drawing customers to free product samples. There, the company successfully persuades customers with reservations about the product quality and leads them to purchase.

Kylie Cosmetics started off quite wisely and achieved huge success thanks to grabbing the trends of building an online business model at first,  that is, selling through an eCommerce website and promoting the brand on social media.

Guardian

Guardian is currently a well-known and recognizable brand among consumers of cosmetics. This brand belongs to the Dairy Farm Group, a company specializing in health and beauty products in Asia. Since its start, Guardian has made ongoing improvements to encourage millions of followers to lead healthy lifestyles as well as offer a high-quality purchasing experience at the finest rates and services. With more than 100 stores “encompassing everywhere”, this retail chain is hailed as a cosmetics retailer for everyone who can purchase everything.

Guardian's success can be attributed to its effective business strategy and significant investment in successful marketing efforts. Upon entering the Vietnamese market, the company focused on expanding its business chain quickly, with a particular emphasis on cities with high purchasing power. The majority of its stores (80%) were located in Ho Chi Minh City, with the remaining stores in Hanoi and other major cities like Da Nang, Can Tho, Bien Hoa, and Vung Tau. At the time, online channels were not well-established enough for Guardian to rely on, so the company prioritized creating a direct point of contact with customers through its physical stores. This approach successfully raised brand recognition through extensive coverage from the Guardian orange and white wave, which was tailored to the cosmetics and beauty care industry's requirements for direct customer interaction and testing. In 2019, the company began its digital transformation journey by combining offline and online (O2O) business models and deploying Omnichannel simultaneously.

Due to the pandemic's impact on changing market trends and consumer buying habits, it is crucial for Guardian to diversify its sales channels by implementing various strategies such as marketplaces, applications, fast delivery services, and eCommerce websites alongside its chain of 105 retail outlets in strategic locations. Guardian's website has an impressive design with orange and white colors and quick page loading. The company offers attractive incentives in its shipping policy, including free fast delivery within four hours for orders over 349,000 VND, to encourage online shoppers. Guardian's eCommerce website prominently showcases its unique product catalog, featuring items such as shampoos, shower gels, and hand sanitizers, among others. To dominate the cosmetic retail market and make a lasting impact on customers, Guardian has deliberately invested in developing a multi-channel ecosystem.

Hasaki

As society advances and progresses, it brings with it certain invisible pressures that affect everyone's lives as they struggle to keep up with the latest standards. Despite this, the demand for beauty and self-care remains high and diverse enough to meet customers' expectations. Although Vietnamese women are considered some of the most beautiful in Asia, they often neglect themselves due to work pressure and family responsibilities. To address this, Hasaki Beauty & Clinic was founded as a trustworthy beauty and spiritual care destination for Vietnamese women. The company's retail chain, established in 2016 and currently with 76 locations across 29 Vietnamese provinces and cities, has become one of the top retail chains for genuine cosmetics. Hasaki's goal is to provide real cosmetics at discounted prices, consistent with their motto of "True Quality - True Value". In addition to expanding its physical store system, Hasaki is also developing an eCommerce website tailored to the cosmetics industry and continually improving the system to provide customers with the best possible online shopping experience.

Hasaki's eCommerce website and app system were built using the Magento platform, featuring an attractive interface with green as the primary color tone. Customers can conveniently check current promotions and lookup order details. The "handbook" section at Hasaki offers a wealth of knowledge on cosmetics and skincare tips, empowering customers to make informed purchase decisions and ensuring the safety and effectiveness of the beautiful restoration process.

Similarly to Guardian, Hasaki incentivizes online shopping through the NowFree 2h service and free shipping rules. Hasaki will offer free two-hour delivery to customers in 29 provinces and cities where it has stores, including weekends, for orders of at least 90,000 VND, and customers will receive free national shipping on orders of at least 249,000 VND. This approach has triggered a "green craze" among many beauty enthusiasts. The company is gradually competing with the country's top cosmetics brands by effectively utilizing a marketing mix strategy that recognizes market trends and takes a broad perspective. 

Currently, a multitude of local and global cosmetic enterprises engage in providing optimal shopping experiences for their customers by proficiently executing an eCommerce website, such as Kylie Cosmetics from the United States, Guardian, and Hasaki from Vietnam. Subsequently, enterprises can swiftly reach out to a broader range of online users and boost sales by employing effective marketing tactics. Nevertheless, it is crucial for business executives to thoroughly consider the increasing demands of customers and rapidly changing market trends, and articulate a well-defined and methodical business plan to make the most strategic decisions in both the short and long run.

Conclusion:

In conclusion, the unprecedented prosperity in cosmetics e-commerce can be attributed to the digital transformation of the industry. With the rise in demand for beauty and healthcare products, the cosmetics industry has embraced e-commerce to reach a wider audience and expand its business scale. The cosmetics eCommerce market size is expected to exceed $716 billion by 2025, and this trend has already been embraced by successful companies such as Hasaki, LixiBox, Watsons, Guardian, and Kylie Cosmetics. To upgrade the customer's buying experience, businesses need to pay attention to modern technologies such as VR and AR, which make the purchasing process smoother and more efficient. 

With the fast-paced development of the digital era, building an e-commerce website is an essential step for cosmetics companies to stay competitive in the market. As such, we encourage our readers to check out the "Websass" blog to keep up-to-date on the latest developments and trends in the cosmetics e-commerce industry.