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the country or the regions targeted and that it is Cosmetic Valley member views on…how to enter and expand in China hard to secure deals with distributors interested • Target frst-tier cities frst. in long-term collaboration. However, most were happy with the number of and quality of • Be careful about choice of distributor. Make sure the company is competent enough to tackle contacts made at the show. “There was good the thorny issue of product registration and regulations. traffc and we made a lot of contacts with small • Target niches: babycare, natural products and environmentally friendly items were singled out as distributors,” explained skincare company segments with high potential. “The baby market will not be impacted by any slowdown in China Laboratoire Rivadis export manager Lucie because of the softening of the birth policy,” explains babycare company Babyderme Laboratories Retail. Natural ingredients expert Alban Muller president Jean-Marie Lardeyret. The fragrance market is also said to be seeing strong growth. president Alban Muller added: “This is a unique • Look for an original approach to distribution, rather than just saturated channels, such as place where you can meet many potential department stores. This can include beauty institutes, pharmacies and fashion boutiques. partners in a short time, and this is particularly • Focus on the web and on local social media in particular. Organic skincare company true this year. The market has matured and Laboratoires Téane founder Agnès Ducrocq comments: “We will work a lot with social media in people are here for serious business.” China, as the consumer is very connected and we can reach more people more quickly.” Other challenges include building brand awareness, keeping the interest of Chinese • Overcome any slowdown in the market with more innovative products. Skincare company consumers whose tastes and shopping habits Actigold Stéphanie Le Briseur managing president comments: “We have to be more original, offer can change very quickly, and coming up with more qualitative packaging and be more creative.” a sound retail strategy. In terms of distribution, some companies expressed the need to take Cosmetic Valley member views on…challenges of doing business in China a different approach and look to new retail • The biggest challenge is product registration. “Registration is more complex than expected and formats that are not dominated by large it takes a long time,” comments Laboratoires Ineldea chairman Nicolas Cappelaere. multinationals. “We will sell through the fashion • Increased competition. Essential oil producer Lac Biossentiel founder and ceo Nelly Grosjean boutique channel, rather than through big comments: “There are more competitors today, compared to even fve years ago. Before, anyone malls and department stores. It is too diffcult to could sell anything at any price, but today, the market is starting to structure itself more normally.” position ourselves and position our brand beside • Adapting price (which can be higher in Europe) to the local market. “Our product technology is the big players,” comments Everity’s Vannier. quite expensive, so the biggest challenge is to design the right commercial offer, in line with the market,” says formulating company Capsum marketing and communication manager Joël Leon. Unraveling regulations One of the main challenges remains regulations. • Keeping the interest of the rapidly changing Chinese consumer. Product registration in China is a long and • Ensuring teams work fast. “Reactivity and product availability can be a challenge—when a complicated process and the rules are often Chinese company places an order, they expect delivery within a couple of weeks maximum,” says subject to change. Several companies in the fragrance company Payan Bertrand director fragrance division Jean-Claude Debieve. delegation said the process was much more • Counterfeits. Foreign companies still say they suffer from local copies of products. “Avoiding complex than they had expected, while others being copied is our biggest challenge,” claims sponge brand Cypréos France Eponges md. commented that it is imperative that a company • Coming up with an offer adapted to the local consumer. “The challenges are huge, from take regulations into account when choosing a product choice, packaging and brand name, although registration is the hardest part,” says distributor. A distributor may have retail contacts skincare company LSC Lyon Skin Care general manager Gilles Robert. and good knowledge of the local consumer, but many complain that they are often not equipped • Informing consumers about relatively new product segments, like organics. “One challenge is to to take on product registration. introduce Chinese consumers to cosmetics that respect the environment and educate them about going organic,” says skincare company Bio Secure export director Nicolas Gravet. The role of Cosmetic Valley is to help its n n n • Laboratoire Rivadis markets three brands: • Alban Muller is a formulation expert • Laboratoires Ineldea creates food Rivadouce, Saint-Gervais Mont Blanc, Milton. in cosmetic vegetable actives and also in supplements, organic skincare, bodycare and a Focused on skincare and baby hygiene. natural ingredients. natural hair coloring range. • Actigold markets anti-aging skincare. • Payan Bertrand formulates a variety of • Capsum creates encapsulation technologies. different aromatic ingredients, as well as • Lorcos markets three brands: My Provence, fragrance compounds. • Cegedis and Abo-Cosmétiques consults Secrets de Provence and Shamp’malin. and develops fragrance and skincare products. • Tulecos markets luxury certifed-organic • LSC Lyon Skin Care offers custom-made skincare specifcally dedicated to the Chinese/ • Cypréos France Eponges markets natural skincare products. Asian market. sea sponges. September-October 2014 - N°19 - BW Confidential 79