Channels Sponsored by
Source: Euromonitor International
The Internet goes through fundamental changes every three years or so, and each change presents whole new opportunities for beauty businesses in terms of how products can be marketed and how consumers complete transactions. In the early days of the Internet boom, Yahoo! was considered the uncontested leader; Google then took over as the world’s most popular site for both businesses and individual users—and the wide availability of fast connections has enriched the Internet. Skype has offered a new way for us to communicate, for example, and YouTube and social media has provided a borderless ground for all people to create and share each other’s content and creations.
That has shifted people’s perception of opinion leaders in many fields. With social networking sites such as Facebook and Twitter gaining popularity and use globally, the concept and pervasive use of “sharing” and “liking” has compounding effects of the original posts or marketing messages.
Similar to what UNT Skincare has found in Taiwan, its largest markets of France and Brazil also have a strong blogger culture and active use of social networking sites. UNT has experimented with similar social-based marketing in these seemingly different societies, and the return on marketing spending has performed far better than marketing solely with banner or text ads.
The beauty industry is finding the Internet a vibrant place to operate. The potential for growing sales and the opportunities to reach ever larger numbers of consumers mean that there are plenty of opportunities for new brands online. In fact, in the current state of the Internet and social media, new players in the beauty industry have a favorable environment and the tools to stand out from and compete with the long-dominating multinational brands, to circumvent hard-to-break-into retail channels and centralize management to control costs. Young labels are now able to grow into robust, global competitors due to the multinationals’ legacy channel strategies, which might gradually become a burden in online markets.
Few major brands have an online presence stronger than their traditional retail channels, and no major global brand aggressively sells online internationally. The majority of beauty products are currently sold through traditional retail channels, with supermarket ranking as the top channel with 46% of total sales revenue generated in the U.S. The traditional distribution channels include:
But if online sales are so viable, why do the large global players sell primarily through the above channels?
These channels require long-term investment in capital and human resources on such a large scale that it is rarely an option to redirect or to reallocate a significant portion of resources to promote sales online.