SK-II is undergoing a brand-new transformation.
Recently, in the heart of Shanghai’s core commercial area, the New World City Mall on Nanjing West Road, where vintage and modern elements intersect, the newly upgraded SK-II counter officially opened, marking the beginning of a new chapter for SK-II in the “Magic City”. The debut of the new counter not only attracted numerous onlookers at the scene but also served as a direct message to the outside world: offline channels and the Chinese market remain crucial battlegrounds for SK-II.
Indeed, SK-II is currently facing skepticism in many markets. However, a thorough exploration of the upgraded SK-II counter reveals that this high-end skincare brand, which has dominated the market for nearly 40 years with its flagship ingredient, still maintains considerable innovative vitality and is “winning in China”.
Counter upgrade, continuous deepening of offline layout
The phrase “Ten miles of Nanjing Road, a new world” vividly depicts the historic commercial center of Shanghai’s Nanjing Road, the “New World Mall”. As early as the last century, this area was a well-known commercial hub in Shanghai. Today, the New World City Mall remains a classic commercial landmark on Nanjing Road, housing over 20 top international beauty brands’ counters, truly earning its title as a large-scale “lifestyle center” in Shanghai.
Due to this, the New World City Mall has become a high-quality window for brands to strengthen communication with consumers. Even in Shanghai, where the beauty market is relatively mature and saturated, the massive foot traffic and upscale positioning of the mall help brands continuously build deep connections with new users. This is one of the reasons why SK-II chose to upgrade its counter here.
In fact, with its prime location and excellent customer service, the SK-II counter at New World City Mall has long been one of SK-II’s top-performing counters in terms of sales and customer acquisition in Shanghai. It has helped SK-II establish a high-quality, immersive product experience environment for consumers in the ‘heart’ of Shanghai. This upgrade is a crucial step for SK-II in continuing to deepen its brand image and market strategy.
On-site observations by CHAILEEDO revealed that this counter upgrade not only involved adjustments to the existing counter structure and optimization of product display layout, providing customers with a more convenient and comfortable shopping environment but also featured brighter counter colors to better and more comprehensively showcase flagship products. Additionally, SK-II relocated the counter to areas with higher foot traffic, making it more likely to attract consumer attention and increase brand visibility, thereby enhancing user engagement frequency and customer acquisition opportunities.
Furthermore, SK-II upgraded the SK-II Skin Radiance Mirror Analyzer on the counter, allowing consumers to receive more comprehensive skin condition reports without makeup removal or physical contact, through skincare trend selection and AI facial recognition technology.
It can be said that this upgrade is SK-II’s response to the continuously evolving consumer demands, indicating a new round of offline brand strategy adjustments for SK-II. According to information from the brand, CHAILEEDO learned that SK-II is currently implementing a new round of counter-renewal plans to further enhance service experiences and deepen its offline presence.
As Endy Wang, the Vice President of Global Sales and Head of SK-II Greater China, expressed at the event, “We hope to bring the best retail experience and the best products to every consumer.”
It’s worth mentioning that at the ribbon-cutting ceremony for the counter upgrade, SK-II’s brand ambassador, Amber Liu, also made an appearance. Together with numerous consumers and fans, they tried SK-II’s classic products, witnessing the beginning of a new chapter for SK-II in Shanghai.
For SK-II, this upgrade is not just a retail space iteration but also a signal: SK-II will continue to prioritize the Chinese market in the long term.
Half of the business comes from new customers
From the current perspective, the rise of online e-commerce platforms has led many brands to focus on expanding their online customer base. Even though many brands that have risen online are gradually expanding into offline channels, their focus remains primarily on flagship stores, with only a few scattered across first-tier cities.
However, the rise of online e-commerce does not imply the decline of offline channels, especially for established high-end brands like SK-II that have deep roots in offline department store channels. Offline channels still hold an irreplaceable advantage.
According to information obtained from the brand, in the over thirty years since SK-II entered China, it has consistently improved both online and offline experiences, deepened its multi-channel layout, and innovated channel operation methods to win over consumers. Currently, close to 50% of SK-II’s business from department stores comes from new customer growth, and by continuously enhancing the loyalty of new customers, SK-II has increased customer trust, making department store channels a strong driving force for SK-II’s performance growth.
So, where do new customers come from?
CHAILEEDO discovered during on-site visits that the service experience at the counter is a crucial factor. Taking the SK-II Skin Radiance Mirror Analyzer (MMS) mentioned in the previous text as an example, almost every SK-II counter is equipped with two or more devices to provide free skin analysis services for all new or existing customers.
It is understood that the SK-II Skin Radiance Mirror Analyzer utilizes AI facial recognition technology, with an algorithm library containing over 1.2 million skin samples, rigorously selected from Procter & Gamble’s massive database, accounting for only 19.7% of the total database. Additionally, the device utilizes color balance calibration algorithms and is equipped with two LED light sources to ensure that skin color is presented closer to its natural condition during skin analysis.
In addition, this technology utilizes contact-based detection, requiring only 5 seconds to accurately capture and analyze the overall facial skin condition within a distance of 40cm. It not only detects skin age but also provides personalized skincare recommendations tailored to the user’s skin condition.
After completing the skin test, SK-II beauty consultants assist users in experiencing SK-II’s classic products, including Facial Treatment Essence, the SK-II Skinpower Advanced Cream, and the GenOptics Spot Essence, among others. Through hands-on experience, they reinforce the offline experience of the products, establishing deeper trust with users. The brand also informed CHAILEEDO that this counter upgrade is aimed at guiding users from the digital experience online back to the present, intuitive, and highly interactive experience.
Products in the left hand, service in the right hand, SK-II is still the same SK-II
The Chinese market is vast and teeming with brands, and while one brand may decline, many new ones will rise. SK-II’s ability to maintain its position in the high-end skincare market for over 30 years in China, traversing several market cycles, is naturally attributed to its unique advantages.
Taking the core ingredient PITERA™ as an example, this ingredient was discovered by scientists in a sake brewery by chance. An elderly sake brewer had wrinkles on his face, yet his hands remained smooth and youthful, thanks to the yeast encountered during the brewing process. SK-II then isolated and researched one of the 350 types of yeast, leading to the creation of the classic PITERA™ in its fermentation component. SK-II’s core flagship product, Facial Treatment Essence, contains 90% PITERA™ in high concentration.
Over the past 40 years, while maintaining its classic formula, SK-II has continuously innovated its product range around the core of PITERA™. It has introduced various flagship products, including the SK-II Skinpower Advanced Cream, and the GenOptics Spot Essence. Last year, SK-II also underwent a comprehensive upgrade of the GenOptics Spot Essence, enhancing its whitening, anti-darkening, anti-yellowing, and antioxidant effects.
The classic ingredients and flagship products have helped SK-II maintain a significant market share in today’s era dominated by single-product trends. Procter & Gamble also stated in its latest earnings conference call that overall sales performance in the Greater China region is gradually improving month by month. However, in the current skincare market in China, where new products emerge constantly, SK-II is often criticized for its slow product iteration speed and long product launch cycles.
It’s important to note that brands are always long-term thinkers. The ability of a flagship product to help a brand navigate numerous market cycles demonstrates its enduring long-term value. On the other hand, only by earnestly conducting research and development, and meticulously crafting products to ensure that each one becomes a market-leading flagship product, can a brand successfully pursue a long-term strategy.
It’s worth mentioning that CHAILEEDO learned from the brand that SK-II is also adapting to market changes and continuously providing freshness to consumers. In addition to the recent offline service-based counter upgrade, SK-II will soon bring new surprises to consumers in terms of products.
It can be said that this brand counter-upgrade is just the beginning of a new journey for SK-II in China. “Change Destiny” is SK-II’s brand philosophy and long-term mission vision. SK-II is continually demonstrating its determination to optimize service experiences and deepen its presence in the Chinese market. The prospects of SK-II continuing its success and delivering skincare results and service experiences beyond expectations remain highly anticipated.
