SEPHORA DEEPENS ITS FOOTPRINT IN CHINA BY BUILDING "THE MOST POPULAR BEAUTY COMMUNITY" | INTERVIEW WITH BENJAMIN VUCHOT, PRESIDENT OF SEPHORA APAC

Benjamin Vuchot, the President of Sephora APAC, told Luxe.Co that "Our goal in China is to build the most popular Beauty Community, which will include consumers, brands, KOL, business partners, etc. Sephora hopes to be the most trustworthy partner of its community members."

After being in China for 14 years, Sephora is now seeking to strengthen its influence in the Chinese market by deepening the all-channel social retail experience, investing in its own brand line, and striving for more exclusive cooperation rights of beauty brands.

Connecting online and offline
Creating an all-channel social retail experience

1. Channel layout: "where consumers are, we are."

Sephora entered the Chinese market in 2005, and opened its first store in Shanghai. So far, it has 235 stores in 74 cities, all located in medium and high-end department stores and shopping centers.

There is no doubt that the Chinese market plays an important role in Sephora's international landscape because, as Benjamin Vuchot stressed in the interview, “Sephora is currently the only high-end vertical beauty retailer in China.”  However, Sephora is also facing new challenges; for instance, Chinese consumers are keen on multi-channel shopping, social media has changed both the source and speed of consumers’ access to information, and the younger generation of consumers is more individualistic.

Therefore, Sephora has now formed a "diversified online community". In addition to its official e-commerce channels (including official website and app), it now has a presence on T-mall and JD, the two major e-commerce platforms in China. Last year Sephora also launched its WeChat Mini Program. It not only intends to reach a wider range of high-end beauty consumers by cooperating with third-party e-commerce and social platforms, but this is also part of Sephora's active attempt to embrace Chinese social culture.

2. Retail experience: integrating beauty shopping, education and entertainment 

According to the "China New Generation Fashion Consumption Report 2018” released by Luxe.Co, "Shopping experience and service" have become the most important factors for a brand to create a good impression with the new generation of consumers, whereas the offline experience is crucial for cultivating the brand awareness of the post-1995 generation.

Last September, Sephora opened its first concept store in Asia on Nanjing East Road in Shanghai, which represents a comprehensive upgrade of Sephora's retail stores. Its most significant feature is the combination of physical and digital retail, thereby creating a retail closed-loop system with seamless online and offline all-channel links. It is equipped with high-tech devices such as cloud shelves, where users can "place orders in store and receive products at home", a Beauty Studio area that provides exclusive make-up trial services, as well as AR virtual makeup trial and virtual interaction between fans and idols.

This concept store is a trial of the Sephora retail store concept in China. Benjamin Vuchot says, "We will open more of these concept stores in future, and we will use this concept to upgrade our existing stores, but this will take a little while."

The logic behind the concept store reflects Sephora's response to current Chinese consumers’ demand and changes in shopping habits. Benjamin Vuchot has observed that Sephora's Chinese customers expect to experience beauty shopping, beauty education and entertainment, all within one community. In fact, Sephora has been working on beauty education for years, and it hopes to share its expert knowledge on trends and skin care with consumers via teaching and sharing.

According to the "China New Generation Fashion Consumption Report 2018”, released by Luxe.Co, personalized customization and styling services have become the greatest demand of young consumers. Daily make-up trials and make-up classes have become an important way for Sephora to deliver beauty make-up education, and the Beauty Advisor program has become its key driving force.

Benjamin Vuchot regards Sephora's Beauty Advisor as the core of stores and experience retailing. "A lot of young consumers spend on beauty products for the first time at Sephora. Sephora is a great educational space. For example, many Sephora clients come in and consult a beauty advisor for the latest product or make-up look for a particular occasion before buying it. It's all part of experience retailing, not just a business transaction.”

Strengthen its own product line

Introduce more high-value exclusive brands

1. Exclusive brand -- the backbone of creating differentiation

In the face of increasingly fierce competition in the beauty make-up market, Sephora continues to strengthen its own brand product line and attract more and more beauty brands to enter an exclusive partnership. Currently, Sephora's exclusive brand and products basically cover the whole category of skincare, make-up and other products, for both male and female consumers.

As Benjamin Vuchot said in the interview, "The new generation of Chinese consumers is more knowledgeable and sensitive to beauty trends." Therefore, beauty make-up retailers must invest in differentiation to capture this more sophisticated generation of consumers. Exclusive brands are becoming the backbone of Sephora to create this differentiation, and deepen its emotional connection with consumers as a result.

Skin Inc., a Singapore-based customized skincare brand officially entered the Chinese market through Sephora in 2018. The Head of Skin Inc. told Luxe.Co that, as an exclusive brand, the products sold by Sephora are not available on other channels.

It is worth noting that the proportion of Chinese local beauty brands in Sephora is increasing. In addition to the high-end lines of WEI (蔚蓝之美), Marie Dalgar (玛丽黛佳) and Color Studio, a number of new Chinese local brands, such as LEANON (两两) have also settled in recently.

2. Own brand Sephora Collection -- A source to attract new customers + innovation testing ground

Sephora's own-brand Sephora Collection consists of a full range of diversified products, covering skin care, make-up, body care and various tools. In terms of pricing, the Sephora Collection is more user-friendly than other brands.

Analysts say the entry-level price of the Sephora Collection is designed to attract more new customers, and as new customers become loyal customers, they will gradually shift their focus to other Sephora brands, seeking alternatives with a higher positioning than the Sephora Collection.

Another major role of the Sephora Collection is as Sephora's testing ground for innovation -- "product development tends to incorporate the latest innovative technologies."

In terms of category layout, skin care, make-up and perfume are still Sephora’s core categories. According to Benjamin Vuchot, "China has become the most important market for skincare. Our Chinese consumers are skincare experts. They think that skincare is the most fundamental and basic requirement, and our make-up helps them to be more confident and bright."

When asked about other potential growth categories, Vuchot mentioned hair care and perfume. He sees perfume as an important trend in China's beauty market and wants Sephora to be a pioneer in this field.