CHINESE COSMETICS MARKET AND CONSUMPTION HABITS
China is the worlds second-largest cosmetics consumer market (after the United States), and is expected to reach RMB 62.6 billion ($8.9 billion USD) by 2022 (PR Newswire, 2019).
Demographics have shifted towards a younger, more affluent segment with an increased appreciation for luxury (Statista, 2019) and consumers are more independent, gathering information through internet and social media channels (Daxue Consulting, 2020). Chinese women favor established cosmetics brands from American, French, Japanese, and South Korean companies, and these major producers are progressively challenged to adapt their products to the increasingly demanding Chinese consumer. Despite the dominance of established international brands, domestic brands’ market share is gradually growing in China, offering new competitive challenges to foreign brands (Mordor Intelligence, 2020).
As the independence, power, and sophistication of female Chinese consumers grows, they are increasingly looking for brands that strongly resonate with their individual and social identities. Hence, Western innovations ignore Chinese culture and Chinese womens beauty codes at their own peril. In this scenario, how can Western companies maintain their competitive advantage and attract new Chinese consumers? How can these companies gain credibility and cultural fit with a market that seems so diverse, unknowable, and complex? As companies seek to expand into China—or appeal to Chinese women who reside in communities across the globe—they require a deep understanding of the intricacies of the Chinese consumer market. In the next section, we discuss the context, aims and design of our netnographic research project for ArtCosmetics. Then, we reveal the key methodological procedures that enabled us to generate meaningful revelations and insight generation for their innovation process.
NETNOGRAPHY OF BEAUTYSCAPES
ArtCosmetics is a world-class B2B contract manufacturer that specializes in color cosmetics. Creativity is at the heart of ArtCosmetics’ competitive advantage, along with flexibility, skill, and speed to market. Ultimately, the depth of the cultural insights that underpin their understanding of a marketplace is what enables them to engage in successful innovation for their clients around the world.
In 2018, ArtCosmetics turned to Netnografica to help them explore Chinese consumers’ notions of beauty and perceptions of cosmetics. Founded in 2007 as a boutique research firm, Netnografica is committed to applying Robert Kozinets’ netnographic procedures to help solve for-profit and not-for-profit clients’ practical problems. The goal has been to custom create projects that reflect the highest degree of social science rigor and precision with uncompromising attention to client satisfaction. The research team at Netnografica worked in close partnership with the executive team of ArtCosmetics. Together, they identified the need for the company’s Milan-based executive and marketing team to develop a deep understanding of Chinese consumers’ notions of beauty and how these get reflected in their conceptions, tastes, and desires for skin care and cosmetics products.
To do this, the project needed to understand contemporary Chinese female consumers living in China and in other locations around the world. It also needed to understand the influences of contemporary media that surrounded them, particularly those of skin care and cosmetics related social media. We designed a netnography that included data collection from social media and cosmetics-related mobile apps, depth interviews, and the use of immersion journals.
Sampling concerns are crucial to netnography. Our research was concerned with understanding both (1) a particular kind of consumer, the Chinese female skin care and cosmetics consumer, and (2) the media influences that reflected and also transformed
Figure 13.1 Research Design of the Netnography Study.
their cultural tastes and behaviors. Netnographic research design requires both an investigative (in our case, social media and mobile app observations) and an immersive component (immersion journals). These were complemented with an interactional element (depth interviews). Data collection was followed by data integration that combined analysis and interpretation. For details, please see Figure 13.1.
Social Media and Mobile Apps Observation and Immersion
The first two elements, investigation and immersion, involved our development and implementation of a transnational social media and mobile apps observational project, undertaken with an international team of 11 people. The aim of this phase was to reveal deep cultural insights about Chinese female beauty meanings, beauty culture, and cosmetics use. We achieved this through searching, scouting, selecting, and then saving data from a range of social media platforms and applications from China and the United States. It also involved following influences and topical areas or specific conversations via hashtags. Beyond the focused searches and targeted immersion periods, research team members engaged in reading cosmetics-related news and in activities such as duty-free shopping, studying inflight magazines and perusing e-commerce sites. The research was designed to reveal future market opportunities and the specific research questions evolved continuously through exchanges among the research team members and regular meetings with representatives from ArtCosmetics. Figure 13.2 provides an overview of the data collected and analyzed in this phase.
Figure 13.2 Type of Data Collected.
As Figure 13.2 reveals, observations and analyses focused primarily on Chinese language applications, in particular Weibo, WeChat, and Little Red Book, as these emerged as the most important platforms. In particular, Little Red Book (Xiao Hong Shu in Chinese language) is a mobile app that combines an e-commerce platform with features commonly seen on social networking sites such as reviews, ratings, discussion, and content creation and sharing. The study also used some English language sites such as Instagram and YouTube.
Because none of the Netnografica researchers are Chinese speakers, we relied on an international network of qualified female Chinese qualitative researchers specifically recruited and trained for the project. All team members collected data and kept immersion journals. After several training sessions, we began a process of weekly online debrief meetings in which they reported on findings. At each debrief with our Chinese researchers (who were debriefed individually), we would ask further questions and direct inquiries for the investigation of the week ahead. We constantly probed for insights into media, technology, algorithms, and practices—as well as our central focus: culture. These topics would be discussed in our biweekly meetings with our ArtCosmetics liaisons in order to guarantee applicable findings. Gradually, interfacing with ArtCosmetics and our Chinese teams and adding our expertise to the process, we began peeling back the layers on meanings, products, retail patterns, trends, trend-setters, KOLs, and other important elements of Chinese cosmetics consumers’ current taste regimes and their trajectories.
The interactive netnography element involved our development and implementation of depth interviews. With input and approval from the ArtCosmetics executive team, we carefully designed an interview guide to query Chinese female consumers about their internal images, tastes, current interests, skin care and cosmetics rituals, social media habits, and other pertinent matters. We used projective tasks in order to gather meta-verbal and subconscious meanings about beauty and self. The interviews were recorded and transcribed as well as reflected upon in the immersion journals.
Along with us, our native-speaking Chinese research team recruited and conducted the personal and video chat interviews on a sample of ten female Chinese cosmetics consumers.
Figure 13.3 Socio-Demographic Characteristics of Interview Participants.
Participants in the research ranged in age from 18 to 45. All of them regularly use make-up and skin care products, buy Western luxury brands, live abroad or else live in China and travel abroad at least two times per year. Participants were financially compensated for the interviews. Figure 13.3 provides some socio-demographic details of the research participants. As we conducted the study, we constantly compared social media data with interview findings, allowing one to inform and interrogate the other, revealing and then resolving gaps in our understanding of central topics such as the dynamic interplay of Eastern and Western beauty images.
Integration involves a tacking back and forth between analytic coding operations and interpretive hermeneutic procedures. We conducted data integration through a combination of deductive and inductive coding as well as through the ongoing interpretation of emergent cultural insights from all of our researchers, including those on ArtCosmetics’ executive team. All of the researchers involved in the project shared their immersion journals that reflected upon and sought to integrate the analysis and interpretation process across sites, topics, and researchers. Given the highly symbolic nature of a large part of the investigative social media data collection, analysis was visual, audiovisual, and ongoing. We had to explore and sort through large amounts of visual and audiovisual data, constantly reducing it by recording it in immersion journals and saving the deepest data for further interpretation. Our data triangulation deployed a “within methods” approach that relied on multiple techniques to interpret data (Jick, 1979, 602-603), including social media investigation, interactive interviews, and immersive journaling and writing operations (Kozinets, 2020, 313).
Although specific findings remain confidential and protected, we use the following sections of this chapter to present a critical methodological reflection. In particular, we show how adopting a penetrant understanding (based in large part on a combination of historical research and interview findings) enabled us to grasp and communicate the interrelatedness of consumer identity, beauty concepts, and cosmetics routines.
Figure 13.4 Chinese-American Beauty Social Media Stars in Influential Poses on Instagram.