According to Tao Beauty & Cosmetics Chamber of Commerce (TBCCC), one of the biggest chambers of commerce for the beauty industry in China, GeoSkincare, a new emerging skincare brand in China, completed its E-round of financing, securing 350 million yuan. [1] So far, GeoSkincare has received a total of 600-700 million yuan financing. [2] This figure implies the capital market’s strong confidence in this brand.
What is GeoSkincare
GeoSkincare’s identity is complex. The company claims that it is a skincare brand from New Zealand. Indeed, it was founded by a New Zealander, Penny Vergeest 20 years ago and has manufacturing factories in New Zealand. GeoSkincare also has its official store on Tmall Global, a cross-border e-commerce platform, a proof that it is an imported brand.
However, the president, the CEO and the whole group behind the brand are all Chinese. Therefore, GeoSkincare is more like a niche overseas brand introduced to China by a Chinese group. This group redesigned the whole brand to make it fit in China’s market while utilizing its country of origin as one of this brand’s selling points.
Nevertheless, this brand still achieved great sales in recent times. From January to August 2020, it recorded a 3.5 times growth rate in sales. During this time, the sales in Cosmetic Store (CS) channels increased 3.2 times while the sales in E-commerce channels grew 5 times. [2] Needless to say, its market performance was amazing. How did it achieve this?
GeoSkincare’s road to success
Looking upon GeoSkincare’s strategy in China we can conclude four aspects to their business operations. They are divided up into four parts, products, channels, marketing, and market.
- Products
After this Chinese group introduced GeoSkincare into China, they upgraded its product lines on three fronts, including natural skincare products, functional skincare products, and beauty enhancement products. Natural skincare products are regular skincare products, affordable and mainly sold on e-commerce platforms. Functional skincare products are cosmeceutical, with higher prices. These products’ main distribution channels are Watsons and single-brand stores (GeoSkincare’s self-owned offline stores). The third product line, beauty enhancement products, such as Nano Chip Beauty, is the high-end product line, only sold in CS channels. These three product lines cover as many consumers as possible and allow GeoSkincare to quickly occupy the market.
Nano Chip Beauty from GeoSkincare
- Channels
The unique distribution channel system is GeoSkincare’s ace card. Unlike most other new brands that view E-commerce platforms as their top priority, GeoSkincare thought that online channels and cosmetic store channels were equally important, so it simultaneously set up both channels.
In online channels, GeoSkincare built its own operation team to cover almost all mainstream e-commerce platforms, including Tmall, JD, Vip, and Pinduoduo. Comparing with cooperating with e-commerce operation companies, this self-owned team can have direct control over the brand’s e-business and get direct access to consumers, beneficial to developing popular products and getting feedback quickly. Because of this team’s successful promotion, its new product, Spring Water Bomb Facial Mask, became the first product to achieve monthly sales of one million units in 2020 on Tmall. [3]
As for the CS channels, GeoSkincare opened a certain number of single-brand cosmetic stores covering most of the big cities in China. In these single-brand cosmetic stores, GeoSkincare mainly sells beauty enhancement products and also provides spa services. This store is like half cosmetic store, half beauty salon. Now, these stores have about 200,000 to 400,000 yuan sales every month. [3] GeoSkincare’s products also entered many other cosmetic stores, such as Watsons, Suning Jiwu. In these cosmetic stores, GeoSkincare usually has its own special section to display its most popular products. This section’s sales usually can account for half of the total sales of GeoSkincare in that store. Because of this unique offline distribution system, GeoSkincare’s offline sales kept growing even during the pandemic.
- Marketing
GeoSkincare also places a huge importance on marketing.
First, it invited a well-known actress, Zhao Wei, as its spokesperson. Zhao Wei has been famous in China for about 20 years, and most Chinese people know her. In particular, middle-aged consumers like her. Meanwhile, GeoSkincare invited another young pop star, Hou Minghao, as the brand ambassador since most consumers in the e-commerce channel are young consumers. This double-spokesperson strategy enables GeoSkincare to cover consumers of different age groups.
Two spokespeople
GeoSkincare is also good at following the most popular marketing trends in China. Live streaming and Douyin vlog were their main marketing platforms in 2020. GeoSkincare is one of the first to cooperate with live streamers on Taobao. After it collaborated with almost all live streamers on Taobao Livestream, it chose to strengthen its cooperation with Viya who now has been a top live streamer in China. Since then, GeoSkincare has become the regular face in Viya’s live stream. Douyin was another main marketing platform for GeoSkincare in 2020. This brand’s average daily investment in Douyin Cosmetic category reached 1.5 billion yuan. It was a huge investment but the ROI was pretty good, exceeding 2. [4]
Besides Taobao Livestream and Douyin, GeoSkincare also invested 30 to 40 million on TV reality shows and elevator advertisements to further promote products. [4]
- Market
While performing excellent in the Chinese market, GeoSkincare is also actively expanding its business overseas. New Zealand is the second-largest market for GeoSkincare. It also has expanded its business to Australia, Germany, Singapore, and Canada.
Future plans
After securing the latest investment, GeoSkincare has planned to build a new manufacturing site in Shanghai and also invest more in R & D. Also, the brand is going to strengthen its overseas supply chain to support its expansion in the international market. Its parent company, Shanghai Youcui Biological Technology Co.,Ltd, want to establish an IPO on the Chinext in 2022 if all goes well. Only time will tell if they can achieve that but considering their track record up until now it’s difficult to find reasons for doubt.
