This is the first post of “Weishang Knows Cosmetics”. In this post, we will explain the phenomena of weishang getting influential in the cosmetic sector, largely dominated by overseas cosmetic companies like L’Oreal, Amore Pacific and Shiseido. On our second post, we will give an example of a weishang based in Shanghai conducting marketing and making sales through WeChat.
Starting a business used to be quite difficult, even in China where making money is an almost spiritual pursuit. However, with the rise of the mobile internet, platforms to create and grow a business significantly lower many barriers. WeChat, with its amazing user base, has proven to be one place where entrepreneurs can be very successful.
Weishang (微商), or micro business, is one feature in WeChat that allows users to sell goods and services to their contacts, advertising them through Moments, the app’s status update function. As cosmetics sector is one of the fastest growing sectors in China, cosmetic weishangs are gaining more traction online.
Previously in order to create a cosmetics brand, it required a lot of investment. However, a weishang doesn’t have to build up offline shops or advertise their brand on offline channels saving a lot of money. In addition, WeChat provides business and marketing channels for individuals who want to launch their weishang.
“We have had a turnover of few million RMB this month,” says Niki Liu, CEO of UChange. “It’s because of the wanghong effect. Wanghong can easily attract followers and fans on their channels. A lot of my followers came to work with me.”
Niki, at only 26 years old, is the founder and CEO of a cosmetic weishang with 30,000 employees and 100 Internet celebrity (网红 wanghong) working for her company. She herself is an influential Internet celebrity. She started her Weibo account in the summer of 2013 and already has tens of thousands of followers. In February 2015, she launched her cosmetic brand UChange in her home city of Wuhan, one of the fastest growing second-tier cities in China.
Internet celebrities in her company post product photos on their WeChat moments. Interested customers based in China, as well as overseas countries like Canada or Australia, talk to them individually on WeChat to purchase the item. The sellers talk one on one with customers and manage them individually. All the Internet celebrities selling cosmetics use one WeChat group to communicate Niki says UChange provides professional training to all their sellers, very different from other companies.
The cosmetic sector is one industry greatly benefiting from WeChat. Over 70% Chinese consumers cosmetic searches online are non-brand terms, according to China Internet Watch.
“Chinese sellers largely depend on viral marketing, and that’s why they like weishang. The catalyst of this phenomena is the easy payment method using WeChat pay,” Eunhee Kim, marketing representative at Beauty Technology Cosmetics. The Korean OEM company plans, manufactures, and supplies cosmetic products to its clients who range from big cosmetic companies to weishangs specializing in cosmetics sales.
According to Ms. Kim, there are two kinds of weishangs in China. The first is the top cosmetic distributors and agents in China. These companies used to be part of the logistics or sales chain. The second ones are post-90, who are mostly Internet celebrities or KOLs (Key Opinion Leaders) in China.
As Chinese consumers tend to go for products with natural ingredients, weishangs have a higher demand for cosmetic products than bigger-size cosmetic companies.
“They would ask us to put in all the natural ingredients to the cosmetics and ask us to take out all the artificial dyes and components,” Ms. Kim says. “Rather than considering how they can differentiate from other weishangs, they all want the eco-friendly components.”
In order to attract more employees, a post-90s weishang CEO usually posts about how much money they have made on their Moments. Niki and her colleagues fill in their WeChat Moments with selfies holding their product, screenshots of their customers making over 2,000 yuan purchases through a WeChat conversation, and pictures of their office piled with cosmetic packages ready to be delivered. To raise brand awareness, cosmetics weishang sometimes collaborate with the other big corporations. UChange is currently partnering with media companies to do cross-promotions.