Stéphane Wilmet, a highly accomplished executive in the consumer beauty industry, joins our show today. With over 30 years of experience, Wilmet has held prominent positions in both the United States and China. Notably, he served as the Chief Consumer Officer at L’Oréal China, where he oversaw consumer strategic branding, insights, foresight, and M&A activities, playing a crucial role in shaping the company’s brand strategies and understanding the Chinese market.
During the pandemic, Wilmet returned to the United States and worked as the Senior Vice President, of M&A, at L’Oréal USA in New York. He works as an advisor to private equity firms and shares his expertise as a guest lecturer at various business schools.
1. Off-topic, but any interest in buying a motorcycle?
2. We know that the beauty business in China is big, but are market nuances that the world can learn from China regarding how business is run here? (Hint: scale and speed)
3. How did L’Oreal stay vigilant with new product development?
4. How do we continue to build brands in a deep discount live stream environment?
5. Livestream help cast a net to recruit new consumers, but how do brands deal with high returns?
6. Will Western and Chinese beauty shopping behavior converge? Are shopping patterns becoming the same as digital ecosystems become similar?
7. Do beauty brands need an offline presence given the power of online?
8. Will we have a time that Chinese beauty brands will go global?
9. Any amazing Chinese beauty brands that you have your eye on?
10. How do young people get into the beauty industry?
11. Are men welcome in the beauty industry?
12. A/B Test: Authentic/New York/C/K/J-Beauty – what’s C-Beauty’s role?/ Virtual KOLs
Stéphane on Linkedin: https://www.linkedin.com/in/st%C3%A9phane-wilmet-2121452/
For everything ShanghaiZhan: http://zhanstation.com/
ShanghaiZhan Theme Music: by Bryce Whitwam
https://soundcloud.com/bryce-r-whitwam/bad-cough-syrup?si=cfb30a6e0c0e459da78b912bf60825ac
Bryce on Linkedin: https://www.linkedin.com/in/brycewhitwam/
Ali on Linkedin: https://www.linkedin.com/in/alikazmi/
Transcript
Bryce: [00:00:00] Welcome to Shanghai Zhan, A raw and lively regular debate about China Tech advertising, creativity platforms, and the intersection of it all. Join us each session for timely and relevant discussions on all things China marketing. We will also be joined by an entire spectrum of China experts, and you can learn more about Shanghai on at our website, john station.com.
I’m Bryce Whitwam and I’m Ali Kazmi. And we’d like to thank all of you for your continued support. Ali, we’ve hit over 240,000 downloads as of today. That’s pretty good, right? It’s
Ali: amazing. Congratulations. Yeah,
Bryce: most of it is my mother who’s been listening over and over again to the episode. No, no, she doesn’t.
She’s listened once. But if you like the show share it with your friends, or better yet, give us a five star review on Apple Podcast or Spotify. [00:01:00] Well, I guess the big news before we get into the podcast is your new motorcycle, Ali. How How’s the new
Ali: motorcycle? The new motorcycle’s amazing. It’s for, for anyone that enjoys veg writing, it’s a seven 50 gs.
It’s a, it’s a triple black, so it just comes in not three different shades of black. I haven’t done any modifications to it. I look forward to to writing it whenever I visit Spain next. So it does, it doesn’t sit with me. It’s, it’s in Shanghai. It’s in Spain.
Bryce: Oh, wow. A bmw, right? It’s a, that’s correct.
I’m very jealous. Yeah. No, I, I, I,
Ali: you, you gotta get one. Yeah,
Bryce: that’s right. I definitely found the way, just, just don’t tell the wife. Yeah, I know. I’m waiting for her to, to, I’m waiting for a, a moment when she’s not around, so I can go and get one and surprise her when you come home. But more on the motorcycle stuff.
Our show today we have Stefan Wilk to talk about beauty and the beauty business being beautiful in 2023. Stefan is a highly accomplished [00:02:00] executive with extensive experience in the consumer beauty industry across both sides of the Pacific, with a career spanning over 30 years. Willett’s notable roles including serving as the Chief Consumer Officer at L’Oreal China, where he is responsible for overseeing consumer strategic branding insights, foresight and m and a activities.
He played a crucial role in shaping the company’s brand strategies and understanding consumer preferences in the China market. Then he moved back to the US during the pandemic. And worked as Senior Vice President of m and a for L’Oreal USA in New York where he had worked previously. Wilma’s successful career completed three acquisitions that have made top 10 beauty brands for Chinese consumers.
As we all know, success in China is what makes the company L’Oreal the. Undisputed number-one beauty group in the world. And I always tell that to my students. I always give them the quiz. What’s the biggest market, for L’Oreal? Someone will say France. Someone [00:03:00] might say us. But now they’re learning it’s China, and we’ll get more into why that is.
Wilma recently left L’Oreal. He’s been working as an advisor to PE firms and a guest lecturer at different business schools. His experience extends beyond the beauty industry as he’s also serves as a board director for Toys R US Asia. A role that gives him insight in the consumer and retail sectors across the Asian region with extensive industry knowledge.
Strategic mindset and a track record of accomplishments. Stefan is a respected leader in the consumer beauty industry. Stefan, welcome to Shanghai. John. Thank
Stephane: you Bryce. Nice to be on on Shanghai. John, nice to meet you,
Bryce: Ali. A Any, any any plans to get a motorcycle soon, Stefan? Just we’re on that subject.
Stephane:
I have an e-bike that I brought from China and a scooter, and I think I’m gonna limit my. Rides in the city of New York with these two wheels two
Bryce: appropriate transportation devices for, for [00:04:00] New York City. Definitely.
Stephane: How does your, does your motorcycle come with a helmet in Spain?
Ali: I do, I do wear a helmet.
I’m a. I have a number of helmets actually, and I have another motorcycle. I, I used to have a Tang Young seven 50 which I got in Beijing many, many years ago in 97. And I’ve shipped it off to, to, to Spain as well. So anything that with two wheels or three wheels and lots of helmets, everything’s, my wife isn’t happy at all, but it’s all, it’s all stationed in the garage in Spain.
Stephane: Okay. Stay safe, Ali.
Bryce: Yeah, stay safe. So, Stephane, we know that the beauty business in China’s big. But you know, there are a number of market nuances that the world can learn from China as far as how businesses run there. I mean, that’s the one thing that’s always fascinating to me is like from our experience, what are certain elements of China that you think in the context of the beauty business will actually move from China to the West?
I mean, it could be like sustainability. Compliance, education, digital [00:05:00] transformation. What are those things that are the building blocks that you think are necessary to, or that made China the number one or made L’Oreal the number one beauty brand around the world?
Stephane: As you said just before when you talked to your students about the beauty business, the, the first thing is that the beauty business is a global business.
It’s very interconnected. So maybe before I talk about China, just to say that, You’re always learning from all markets all the time. There’s always something new somewhere, and it’s kind of like the famous or maybe the infamous butterfly effect, but applied to beauty. The, the idea that one smaller trend somewhere can have a non-linear impact on the global beauty world.
But yes, when it comes to China, there’s so much to learn from, from China at the big picture level and. The two of you, Annie and Bryce, you, you know this from your own experiences in China. In in China, you learn scale and you learn [00:06:00] speed. And there’s no other market where you can learn how to scale in beauty at such a speed.
And for our beauty business, you either catch the The, the Chinese high speed train, or you stay behind. So you learn about e-commerce at scale, you learn about digital at scale. You learn social commerce at scale. You learn influencers at scale, but it’s not just online. It’s all forms of interaction points with the consumers on their online and offline journey.
And with regards to the nuances that, that you mentioned, and of course we all know that. China is aging quickly. There’s a lot of talk going on about this aging phenomenon these days in the, in the China focused world, but the beauty business itself is still very much driven by young consumers. Therefore, it’s infused constantly by a youth culture that that permeates every aspect of the business.
So for [00:07:00] instance, You were asking for what, what can we learn in, in some western markets when it comes to skincare? For instance, consumers will start using anti-aging products for correction for corrective purposes, to correct some aging skin concerns that they may have. But in China, consumers, as you know, start using anti-aging products.
For prevention at a very young age, maybe when they’re 16, 17, 18. So 10, 15 years before their counterparts elsewhere would, would start using them. You, you mentioned sustainability like many big transformative trends that are constantly shaping and reshaping consumption in China. And, and have you heard the two of you talk about this with other guests?
You, you’ve had, but these, these trends, they don’t exist. They’re not there. And then the next day they’re there, [00:08:00] but they’re there and scaled. And sustainability today, it’s a major concern for consumers. It, it’s what you marketers call a a table sake. It wasn’t necessarily at the table as a critical attribute before, but now it’s a given.
And if you’re not working on sustainable, Solutions that improve the, the beauty world, and you’re out of the consideration of of consumers. This being said, and there are many experts working in the field of sustainability who, who would know so much more than I do, but sustainability in China will be with Chinese characteristics as, as we say in China.
They will reflect the cultural dimensions that preexist and that predate the Western-based sustainable movement. And then it will help sustainability globally. And this I think is where we can learn from China this fundamental cultural link. That ties what you eat or drink with your health, the [00:09:00] inside and the outside, how you treat the environment and how you live in your own body.
And of course, it provides a cultural frame for this sustainability discussion that brands can have with their consumers. You mentioned transparency, and transparency is very much linked to this point about sustainability. Knowing that in China, consumers have a very high level of expertise when it comes to ingredients.
So understanding what goes into a formula, what concentration for what output is a big educational critical step needed not only to connect, but also to help consumers. And what you learn in China, you can apply elsewhere. You, you ask Bryce about the, the building blocks. I’ve heard. The two of you mentioned this many times in China and on your podcast.
I, I think change is a constant, it’s a given in China. I don’t know if if HIRA was thinking about China when he [00:10:00] famously remarked that the only thing that is constant is changed. But that’s clearly what is at stake for the beauty business in China. Every, maybe every three years, four years, maximum five years.
A new generation of consumer comes up like, like say a, the equivalent of a universe, four year university cohort. And they have very new beauty aspirations, new beauty dreams. They, they have a new beauty culture. They use platforms, either new platforms or existing platforms differently. They have new beauty codes, and I, I know you’ve, you guys have heard it already many times.
You, you’ll have these new hires, freshly graduated, join the company, and then they say they don’t understand their younger siblings. I mean, not they’re real siblings, but they, the younger Chinese consumers who are four years younger than them. And, and so the, the building blocks. They need to be both super solid to [00:11:00] withstand these changes, but they also need to be super flexible so they can integrate these changes as new foundations.
And so there are many of those building blocks. I, I would say in beauty there’s a few like trust. And trust is linked to education and it’s measured by reviews, and it’s measured by ratings, and it’s measured by what consumers and non-consumers say about your brand and your products. And trust, of course, is linked to results.
It’s linked to efficacy in beauty, efficacy rules to a certain extent. So if you have a skin or a hair concern, whatever it may be, you want performance and you want results. So I think the first. Building block to answer your question is trust. Another building block is maybe we can call it aspiration.
You want your brand to be aspirational. You want your brand to be inspirational to consumers. Because consumers change all the time, their preferences and viewpoints. [00:12:00] So you need to work to ensure that you remain relevant and aspirational. They, they trust the solutions you, you bring to them. So, so that requires a constant vigilance when it comes to brand equity, and it’s a world, and it’s a requirement, and it’s an expertise that the two of you know know very well.
And maybe the third building block. I think it’s also linked to trust and aspiration. They, they help themselves explain it is in beauty is premiumness, which is often misunderstood for just a, a question of pricing that has nothing to do with pricing. It’s about the service. The better service, the better experience, the closer communication, the bonding with the consumers, the sharing of the values, the, the.
How the brand joins the world of the consumers whilst remaining aspirational. So these are three of many [00:13:00] building blocks that have helped. In my understanding that I’ve helped L’Oreal and its many different brands, be so successful
Bryce: in China. On one part you mentioned youth on the agency side, that was also the case where I would go to one of my, my colleagues and say, listen, you know, I’m, I’m 50 plus.
I have no idea about this and my. Colleague would respond to me why I’m in my late twenties or or early thirties. I’m already over the hill in the context of what Chinese young women want. And I’m like, wow, that is just crazy. I
Ali: have a question on, you mentioned beauty codes and you mentioned how every well, I wouldn’t say every generation, but within a gap of four to five years, you know, the expectations of consumers obviously are different.
How do you as a company stay vigilant, or how did you as. You know, as with L’Oreal, stay vigilant on what needs or what expectations consumers had and, and how did that affect product innovation for the company,
Stephane: because especially in [00:14:00] China, I worked in different markets, but in the beauty market of China, because there’s this constant change, the most important is to not miss the train.
To use your, your words, you want to be at the station at the right time, at the john at the right time and, and see what train is going by and join them. And so I, in, again, I don’t speak for, I don’t represent L’Oreal. And L’Oreal does many things. But my observation is that you listen to consumers and in China we’re lucky that consumers want to express their point of view.
They’re on many platforms, many social medias sharing their feedback about the products they’ve used and, and they bought it for this, but they used it for that. And it show, then post pictures, and then there’s discussion. So there’s a very rich world of. Consu real consumer usage [00:15:00] that’s there to be analyzed and thought and discussed and discussed with these consumers.
What, what do you mean and what is this? And you can go very deep into the understanding. You know, you come out with a product and you think it’s gonna do this, but then you realize in China that it’s used for this, but also for that. And, and so I think that’s how you stay vigilant and how that’s how you stay relevant.
And it’s not difficult per se. It just requires a daily discipline of keeping up with what people say. Yeah,
Bryce: that’s, that’s fascinating. I listened to an interview you did for nyu and you talked about the importance of building brand. Affinity and brand connections and building that connection, whether that’s any of the portfolio brands from L’Oreal or any brand, you know, urban Decay, or Helena, Rubenstein, any of those.
Andi, you know, any of the brands we’ve kind of noticed recently, and this is not a [00:16:00] post covid thing, it’s actually a pre covid thing where it seems that. There’s this dilemma or this paradox where beauty brands are using deep discounts on livestream shows to drive sales. There’s less, and I know this from an agency perspective, as being they’re spending more time on live shows, dropping prices, and they spend less time on the emotional driven communications.
Is there a balance or. Is the pendulum swing too far to the deep discount livestream model? It’s
Stephane: a fundamental question that anyone working on a brand has to face every day. So, again, I, I’m not here in, in a capacity representing what L’Oreal does or did in China. I, my observation is that, first of all, Bryce, you see this tension between the short term sales gains and the longer term.
Brand building in many markets across many different industries, [00:17:00] not, not just in China. Consumers everywhere want good deals at certain moments when they’re shopping. The reality about Covid is that markets. Experienced different forms of covid related restrictions at different times. And so there were other markets outside of China that helped pick up business opportunities for, to cover for periods when consumers in China were under some forms of of lockdown.
But to your point, to your question about, you know, these deep discounts. You’re asking about livestream. Livestream is actually a very interesting moment to recruit new consumers. So if, if you view it as a moment when a consumer meets a brand, a moment to engage with new consumers about something they don’t know about your brand or about a product.
And you see this as the first [00:18:00] of many steps to come in the relationship, then it’s not about the discount and it’s not about the short term sales deep discount. It’s about connecting with a consumer that you would not be able to connect with. In this kind of form because consumers trust their live streamers and they know at what time of the live stream, the live streamer will be talking about what product.
And so there’s an element of education, there’s an element of fun, there’s an element of building your own beauty expertise for the, for the audience, for the watcher that is at play. And so I would say that if you have the big picture of you want to build a relationship with your consumer, then. The, the discount is less of a, of an issue with regards to livestream and with regards to the way this plays out,
Ali: I’m just gonna build on something that you just said and I wonder if there is some truth to it.
I also [00:19:00] remember one of the big things that happens when people buy product during livestream, and this is an open discussion by the way Bryce, feel free to interject as well. But remember and I don’t have an exact fig figure, but I remember during let’s say double 11 7 18, there’s also a number of products that are returned to a, a seller or an advertiser.
I actually completely agree with you. It’s an amazing opportunity to recruit new consumers. Livestream perhaps gives you an opportunity, if I can summarize, to cast the net really wide. So that you can recruit new consumers, and I guess even, even with the offset of whatever it is, 50% return products return, or 30% products return, it’s still, you know, it’s still a worthwhile tactic or a method to recruit new consumers.
Would you agree to that?
Stephane: I, I would agree. I, I don’t remember that high of a return rate. But what I do recall is that the live streamer, [00:20:00] he or she puts his or her credibility at stake when he or she chooses the product that will be featured in the live stream. And so if you do your work well, why this, for instance, this product and what to say about this product?
And it’s not what the brand says about the product, it’s what the live streamer understands and wants to communicate to his. Or to her audience if you do that job well in the selection of the product at the right time with clear takeaways for the audience watching, because again, it’s fun and it’s educated.
If it’s just about sell, sell, sell, then yes, I, I would agree with you Ali, but the way I see it is this is a unique educational moment that’s fun. Between a live streamer and his or her audience. Nothing to do with the brand, but the, the live streamer endorse by selecting your product, [00:21:00] endorses that product, and so that helps reduce the return.
If you’ve done if the brand did its job correctly, that, that’s how I
Ali: view it. Or in our case, the agency,
Stephane: you’re kind of course the agency. Yeah, of course, course many actors involved.
Ali: Yes. No, you were kind enough not to, to say it’s a brand problem. But then I kind of thought to myself, I was like, oh, this makes a lot of sense.
It was probably the agency, the fault.
Bryce: Good one. One of the things you mentioned at the start of the show was about the, the nuances and differences about how Chinese consumers shop and what the, their, the process that they go through. I, I have a hypothesis about this, that this is not necessarily cultural, but an evolutionary, and that as digital channels become more developed to the way they are in [00:22:00] China, that western.
Women will shop in a similar means as to the Chinese consumers do. Yeah. I worked on Helena Rubenstein, and I swear that it was the most challenging Chinese lesson I ever had because the terminology was so sophisticated. I swear I could have gotten a degree in dermatology. It was unbelievable how much stuff, how much science and information they put into their, into their products.
Do you see this as. That Chinese women tend to be more systematic and that they’re very science driven and, and you, and obviously everyone’s looking for benefits and results, whereas Western women tend to be more emotional. They’re looking more for, oh, if the Kardashians recommended at, they’re looking more for heuristic type of connections.
Is there a difference or is. And this is a cultural difference or is this an evolutionary path? And maybe someday Western [00:23:00] and Chinese consumers will shop in the very similar means.
Stephane: I w I look forward to your to reading your complete thesis rice on this because that’s a key key question. I, the first time I was in China as a student was in, in the early 1980s.
And so I look a little bit to the, this question of evolution versus cultural with a bit of hint insight. I think when the beauty industry in China developed, that’s when the digital. Ecosystems developed concomitantly, and so it, you can speak about evolution, but it’s also the amount of information available and, and the sharing that these platforms enabled, led to something very unique in China.
Could deploy some at some point elsewhere in other markets. But at the moment I, I, I find it very [00:24:00] cultural to, to China, which is, and you’re right with your point about Helena Rubenstein is the level of expertise of a Chinese consumer when it comes to skin, hair. Beauty cuz what, whatever is unparalleled.
The knowledge of what goes into a formula of the ingredients, why the ingredients, and what concentration and what does it do when it’s at 2% versus at 3% and when it’s formulated. This kind of formulation or that kind of, I’m, I’m not gonna get technical here, but they actually help our formulators, our chemists, our scientists, our researchers up their game because these beauty companies are marketing to consumers who are not there for the simplistic, blah, blah.
They really wanna understand what does this ingredient. Why was it chosen and what will it do for my skin? And I, you’re, you’re [00:25:00] asking about culture rise. I tie this. In a way, and some people, some people simplify it too much, but I tie it to what can be summarized as the culture behind the traditional Chinese medicine.
What you eat determines your health at certain season, depending on your body’s needs, and. And what you drink or what you don’t drink, and if it’s cold or warm. And then, and there’s so many different cycles throughout the year, and so I e, even if they’re not TCM experts, there’s this cultural dimension that ingredients are critical and we see it in many aspects, but we see it in In beauty, you talk to a skincare user in China and you think you’re talking to a, a very well educated, researched scientist.
But when it comes Annie was mentioning livestream, et cetera. You know, the, in some western market, there [00:26:00] were, what was it called? They were TV shopping. TV shopping, you know, QVC. QVCs and HSNs and, and, and so maybe in terms of evolution and convergence, so maybe some Chinese consumers went straight to the most, the most definitive phase of, of that kind of interactive, fun, educational shopping, but, Enabled by online tools, by digital tools.
So they, they skipped some of the intermediary phases. We, we’ve, the three of us have seen this in other industries also, where they just go to the, the, the most developed latest version and they skip everything in between. So I think I’m, I’m French, so there’s a expression in, in French in Norman. Sorry.
It’s a bit of both. I would say a bit of. Cultural and a bit of evolution [00:27:00] for sure. I played in the beauty business. That’s great.
Bryce: E-commerce business now in the beauty business in China is about 50% online and it’s probably growing it, it is probably more growing more than that. It’s probably beyond 50% now.
That was, that was a, that was a few years ago. I always wonder is that, do beauty brands need offline? Do they need an offline presence or can they build a complete digital only beauty brand? I know we saw a brand, like, like Perfect Diary. They started to launch flagship stores in key cities. I know, I know.
One, the one in Shanghai. It wasn’t nothing, nothing very impressive. But is offline presence still necessary here or. We, we’ll eventually go beyond that, where we don’t even need to go to the counters anymore and we can have a total online experience
Stephane: here. It’s a question of evolution. There are many Chinese D two C brands that started online and scaled very quickly at [00:28:00] online.
The need to answer your question, the need to, to have online and offline, in my understanding is, Linked to not oh two oh, but oh plus. Oh, it, it’s linked to the journey of the consumer and you, you see it every day with consumers in stores, online or offline. You can have a consumer in a physical store, but checking reviews online as they try the product, you can see consumers buying online, but trying offline.
So it’s not one or the other, or it’s not from one to the other? It’s both because the consumers. In beauty, they don’t oppose or they don’t see one as a precursor to the other, or one as a [00:29:00] sequel to the previous one. But the answer is what is the role that the brand allocates or defines for their store?
What is, what is the experience and the usefulness of a store online or offline? If they’re both the same, then they’re not gonna be successful. But if there’s a reason to go online and a reason to go offline and both participate in the building of the brand, Then yes, I do think that beauty brands need an online and an offline presence.
And maybe when it comes to to a perfect diary had a very excellent start and success and there was a lot of talk about it. Maybe at some point they didn’t really think through the role of their offline stores versus. What they were doing online. That’s my hypothesis. I,
Bryce: I tend to agree. I think that they were primarily focused on [00:30:00] the online component and they got to a point where they realized that they needed to have that offline experience.
I mean, the validation of online purchases through online offline experiences in China is huge. It’s. 60, 70% people still go to counters and will try products. They’ll spend that time and then they’ll just sit and open up their app and, and buy the product from, from Tau or, or Jing Dong. It’s, I remember at one time in China that, that the counters, the brands hated that because the way that the distribution model was set up it took a while to become O plus O.
That was definitely where, remember that time where the online, offline groups were competing against each other and, and you go to client meetings and the, and the e-commerce people were like in a different room. And we were always wondering like, why? Don’t we have the e-commerce people come? Oh, it’s a different department.
Bryce. Don’t, don’t bother them. So but yeah, it’s obviously the successful ones are, are combining the two together. I
Ali: I was gonna just [00:31:00] the Maybelline is also part of the L’Oreal family of
Stephane: it is France. Yes. Ali. Yes.
Ali: I I saw a case study the other day, and in it they talked about how they built experience stores for Maybelline.
Offline, and I think those stores have since closed. But I think one of the big takeaway for them was that they were selling a lot more product through the offline store because there was a lot more experimentation within that environment. So when you have lipsticks, and especially for women, they have a tendency of trying more things or trying more colors.
And so when they left, the basket was a lot more full. Versus online where it was kind of, and this is going back to your point around role where online it was kind of. Or at least this is how we deduced it was you know, the color that they would continue to use over long time, but over longer term.
But when it was, you know, do I want a new color for, you know, for a different occasion? And that’s something that they would rather do within an ALINE environment. [00:32:00] And I think, to your point earlier on the O plus o, I think, and the, and the role that both channels play, I think that’s that, that’s, that’s what came.
To mine when you mentioned that that resonates, well,
Bryce: we first met Stefan when you were working on U SSI and which I think is a great product. I think after my brief exposure to it, I actually bought it for quite a long time. That’s the only other great thing about working on beauty brands as a, I start like going to all these sign these meetings and listening to all the product benefits and I’m like, God, that really makes a lot of sense.
Why don’t, why aren’t I not using sunscreen and why am I not moisturizing enough? And I start doing it myself and, and. Believe it or not, people especially come back, leave China and people come back and says, wow, your skin looks great. I said, yeah, because I buy the bullshit. You know, it’s not, it’s this, there’s some truth in this man.
Are, are you using sunscreen? You know, like, no. Should I, well, okay. Are we in a moment where we’ll see Chinese brands exported out of China? Do you think that like brands like USI or which has [00:33:00] obviously got Chinese, you know, Chinese herbal ingredients, but are there other brands. That you think that will start to export?
Is there an ability to go global? And if it’s not, maybe not a L’Oreal acquired brand, maybe somebody else that you think, wow, this brand has definitely got, or is it too early for Chinese brands to compete
Stephane: globally? I sincerely hope that you continue on your beauty journey Bryce, and feel free to contact me if you have any questions.
But, but you’re right, there’s a lot to learn in China and there are many Chinese brands that are. Phenomenal. And the brand Sai that was started by Madam Sai, who herself is a phenomenal lady very successful and very daring, and a pioneering entrepreneur. She saw the opportunity of beauty in China before anybody else, and she saw the opportunity of bringing the best of the West and the best of the east together to help.
Chinese women best explore and best express their, their unique [00:34:00] beauty. So I think once a Chinese brand is strong in its home market, definitely it has an opportunity outside of China. If we forget the beauty industry for just a, a few minute, and you look at other industries, cars phones entertainment like TikTok, you, you see Chinese brands that are winning outside of China.
I think in beauty. Maybe the path will be through Southeast Asia and other Asian markets. And then at some point outside of Asia into possibly Europe or the us. Obviously there’s the elephant in the room of, especially these days of how China as a country, I’m not talking about a specific brand, but China as a country is perceived or misperceived or misunderstood.
Because of maybe political you know, discourses, I don’t want to get into that, but that obviously plays a role in shaping perceptions of brands. [00:35:00] So, so I, I, I see that coming. I, I see it already for some brands. That have successfully navigated markets outside of China. And I think for beauty, there’s a lot to learn from these Chinese beauty brands.
Definitely. They don’t have
Bryce: to be they don’t have to be a part of your past portfolio of companies, but what are the three top Chinese brand beauty brands that you love? I mean, you just think that there, there’s awesome, I worked on, I, I got exposed to this one brand called Kaleidos. They are, An export Chinese brand.
Just a fantastic product, great messaging, beautiful product all developed in China. Ba mainly for the Western market, but that’s mine. What are your favorite, if you had a couple ones that you got exposed to through your m and a jobs, you say, God, these guys are amazing, and what are they and why are they so amazing?
Stephane: There’s. Bryce, so many, even when you’re in China, you don’t always perceive it. But there’s so many Chinese beauty brands and they’re well known to Chinese consumers. [00:36:00] They’re totally unknown. Outside of of China. I’ll, I’ll answer your question, but I was in, in China a few weeks ago and it was the Odo Mobile show.
The Odo show. I was dumbfounded by the same realization that there’s so many Chinese car EV makers that nobody knows about that are so powerful when it comes to design. To all the functionalities. They, they provide that they, they’re way ahead. And so in beauty, there’s many brands. I think recently a lot of creativity is in the perfume space.
In the fragrance space. So maybe in traditional beauty cosmetics, skincare. There’s a brand called Prolia, P R O Y A that I’ve known has nothing to do with m and a I’ve known for many years. That’s A fast learner of of Chinese skin and Chinese hair. And then there are many new brands in makeup and also in more recently in fragrance that [00:37:00] are amazing.
One of them is a brand called Documents. It’s English name. I mean, they all have Chinese name. They may or may not have an English name, but. But really every day you see new brands and it, and, and I’m not kidding, every day you see new brands in beauty in in China. But do
Ali: they stay, I mean, do you see them over a long period of time or is this, is this kind of the I I’ve heard of Pya as well.
I. Herber, no, not herbalist is another one. But but do you see, do do, do you see them lasting as well? Or, or is this kind of here today, gone tomorrow,
Stephane: so, so that’s why I am, I mentioned proja because that rain’s been tested over time. And it’s been around and it is around and depends on what they do, but it should be around for many years.
And then you’re right, there are some brands that come and go. I think, and that could be an interesting discussion, Bryce for after this podcast, but I, I think it’s many Chinese brands start with a product. They don’t [00:38:00] start with a brand. They start with a product or a hero product that. We will work with the algorithms of the, of the different online platforms.
And so some of these brands, Very early on realized that it can’t just be about the product, it has to be about the product and the brand as a halo. And, and for those brands that intentionally work on building the equity of the brand, not just the awareness of the product. Then yes, they have a chance to, to be sustainable over time if they don’t miss the next generation of consumers who come and say, that’s, that’s not a brand for me.
Cause I’m from a very different generation and we’re talking four or five years here, not talking 20 years. And then there are some Chinese brands that do a really good job at the project level, but for whatever reason, may not pivot early enough to explaining to consumers. Why this brand is there, what is this [00:39:00] brand doing as a brand?
Not what is this product doing in within the beauty regime of the consumer, but what is this brand doing? And if, if that’s the case, then I think they come and go.
Ali: Yeah. The, the question was really born from cars as well, and the experience that you had at the Shanghai Auto Show. I think there’s an expectation that not all of the ev.
Car brands that you saw will continue to exist, but there certainly will be a handful that will. And then I was trying to draw a connection with beauty and, and skincare and cosmetics and I guess, you know, that is probably true for this category as well. Those some that are just gonna be, you know, they’ll have, there’s, they, they have brand trust, they have purpose they have product innovation.
They understand the
Stephane: platforms in cars. I learned that there’s an entry, there’s a. Really a high entry barrier, which is the cost of developing a platform which is measured in billions of r and b or dollars. And so if, if [00:40:00] the funding community, if the bankers and VCs are not funding, there’s gonna be a consolidation.
Obviously in, in beauty, we’re not talking about the same entry levels. But the, the bearer that I see is at the brain equity level. Are you clear about what, who, what you stand for? You mentioned Ali purpose. Why are you here? In my beauty world, if I’m a consumer, I understand you as a product. I need to understand you as a brand.
I think that’s where the jump is. The jumping step is for some of these Chinese brains.
Bryce: This is a question I get asked all the time and we know that. Through our amazing algorithms on this platform. We know that a lot of young people listen to our podcast. So we know from your experience in, in the beauty business and the fact that You know, you worked at one of the most top five most attractive companies to work for.
What [00:41:00] advice do you have for young people looking to start their career in the beauty industry?
Stephane: My advice would, would be a question, and my question would be, is beauty your passion? And if yes, why? And in the beauty world, and it’s a very diverse world across different categories and. So many different beauty needs.
What, what do you aspire to change? Because it, it, it can’t be a job. It can’t be applying for a job. It it, it’s about being passionate to make beauty even more beautiful, to helping consumers who have different understandings of what beauty means to them. Achieve their goals. And so, but if that’s your passion, then yes, apply it to L’Oreal because indeed it’s the best global beauty company and it leads the industry.
It, it drives change. So my advice is a question, and that question is, why are you passionate about beauty? [00:42:00]
Bryce: Hmm. Great, great point. I, I like the, the fact that you mentioned passionate about beauty, which I would say, now you’re gonna say no, this is not the case. But I’ve been to a number of marketing meetings at Beauty Brands and I’m the only guy in the room.
It’s a female industry. I’ve always told my students that from the day one, because I signed them beauty brands. As case studies, and I’d always get a male student to come to me and say, professor. I do not have any interest in this category, and I respond to him to say, then don’t be a marketer. If you are not interested in women’s marketing products, then your, your scope of brands is very small on the consumer side.
So what makes you passionate about the beauty industry?
Stephane: So answer is yes, yes, yes, and yes to all these questions. First of all, I think there’s a lot of [00:43:00] men male colleagues in, in the beauty industry. First of all, because in some of the big markets, especially China, but other North Asian markets also the men beauty business is bake.
That’s what we don’t necessarily realize, but it’s big growing and very specific. But it’s not about being a man or about being a woman and understanding men or women needs. It’s is if you’re passionate about beauty, which means. Beauty is linked to so many different, if I ask you, Bryce, what does beauty?
And I ask you, Ali, what is beauty? I ask somebody else, what is beauty? I’ll get different answers. So, so beauty means very different things. And so why am I passionate about beauty is because it’s, you’re constantly having to ask yourself this project, this campaign, this brand, this whatever. How will it fit into the beauty needs of my targeted consumers?
[00:44:00] And they’re always changing. You can’t say the Chinese consumers all have this beauty need that that doesn’t exist. And I don’t. Know of many other industries where there’s such a diversity from the confidence aspect to your exterior or your inside to whatever you’re, how you’re feeling, the, the season, the age, your body.
There’s so many, so many different parameters I play. Cultural and yeah, it’s, it’s exciting cuz every day is a different day in the beauty business, every day is a, is a different day because consumers have. And, and you can’t define one consumer, one beauty need. And think of yourselves and your better halfs or the women who, who, who matter in your, in your lives.
And the men also think of their beauty needs. How about
Bryce: you, Ali? Passion for beauty. I like
Ali: beautiful things. My wife keeps undermining me [00:45:00] to dress up and just be better groomed. But I’ve taken a liking to being groomed actually, and this is something very recent. So this morning I shaved, I cut my hair short.
I’m losing a couple of pounds. I think there’s fitness for me and just, you know, feeling good is beauty, feeling, feeling good and feeling young. Yeah. Are we ready for the AP test? I think we are. Stefan, are you ready? Absolutely. Number one, ethical or authentic? Authentic. Paris or New
Stephane: York? New York today for sure.
Resilience
Ali: or
Stephane: persistence? I like
Ali: persistence. Online or
Stephane: offline. Then I’ll say end offline and online.
Ali: Skincare or hair care? Skincare. This is the first time we’re ever doing three in, in one. Ask a J. Beauty, sea Beauty. Or K Beauty
Stephane: today, it would be Sea Beauty for me because Sea Beauty feeds off J Beauty and K beauty and goes so much.
Beyond that. [00:46:00] And there are many reported instances, for instance, of Japanese consumers looking at sea beauty as an inspiration today, which would’ve been unthinkable a few years ago. So definitely sea beauty, that’s really fascinating.
Bryce: To think that maybe because. Yeah, it’s true that I mean, we all agree that Koreans are much better at, at, at exporting pop culture than the Chinese but, but the sea beauty will be more about the ingredients and formulations, more the science will be the, their contribution to c to the global
Ali: beauty business.
Is that something that you think international beauty brands are also looking at exporting sea beauty to the rest of the world?
Stephane: Yes. Because sea beauty is very deep. In, as we discussed, both from the scientific formulation ingredient level, but also cultural. So countries like Korea of course have perfected the art of [00:47:00] exporting Korean culture.
But definitely when it comes to beauty, sea Beauty is something that will be, is and will be exported.
Ali: I’ve got four more to go. Red Book or TikTok
Stephane: Red Book. You learn so much on Red Book
Ali: AI or metaverse
Stephane: ai. And here I’m at the start of my AI journey. But ai, yes.
Ali: Hydration or anti-aging.
Anti-aging. U C C or ii
Stephane: e I love U C C. Who are these people?
Ali: Ali? These two people are. Great question. So as the world of, I guess, live streaming and KOL marketing moves away from physical, real celebrities virtual KOLs seem to be a lot more reliable and delivering a consistent. And very persistent, authentic brand message on online and offline environments.
I was trying to cover up as much [00:48:00] as I could, and they pay their taxes and they pay their taxes on time. They don’t get thrown out into, into the slammer. Yeah.
Stephane: Ali, the poet. Very good.
Bryce: That’s great. Well, Stefan, thank you for being on the show today and for amazing insights that you’ve shared with us on the beauty industry and your experiences both across China and the us.
We really appreciate it. Fantastic. Fantastic discussion.
Stephane: Thank you for having me, Bryce. Thank you for having me, Ali. It was very interesting. Thank you.
Bryce: And thank you everyone for being on today’s episode. Join us in a few weeks. For another exciting show and to all our listeners. Until then, have a great day.