The Dividend of Offline Channel still Exist

Accumulate as much as possible but to release a little at a time.

Editor’s Note

As the leader in global economic growth, China’s beauty market is booming. The market breaking through trillions of dollars in volume will soon become the top in the world. Looking into the future, international beauty giants prepare for the competition while domestic enterprises are following. Whether the big ship proceeds smoothly without a hitch, the helmsman is responsible for an important mission. CHAILEEDO holds a column “CEO on Trends” and we interview CEOs from well-known cosmetic companies at home and abroad to discuss the future increment and trends of the Chinese market.

Since its entry into China in 1997, ALBION, as a brand promoted by many KOLs, has a large number of loyal fans but keeps a low profile. Why? With the consensus that “the Chinese market is in a decisive position”, how will ALBION enhance its competitiveness in China’s high-end beauty market? In an exclusive interview at the 4th China International Import Expo with Shinichi Odabe, General Manager of ALBION China, he explained ALBION’s philosophy of “slow is fast”.

Original skincare model “Lotion first, then Toner”

Public information shows that Hideo Kobayashi founded ALBION in Tokyo, Japan in 1956, which has been designated as a high-end Japanese beauty brand since the day of its found. In 1997,  ALBION entered the Chinese market and was one of the first Japanese cosmetic brands to enter China. At that time, Guangzhou Aozhimei Cosmetics Co., Ltd. was the sole agent of ALBION in China and its main channels are beauty salons and cosmetic stores.

In 2011, ALBION’s parent company, ALBION Group, established a subsidiary in Shanghai, ALBION (Shanghai) Cosmetics Trading Company which is the fourth subsidiary of ALBION Group in overseas markets after the US, UK and Hong Kong, China. It is mainly responsible for ALBION’s operation in the department store channel.

From the history of ALBION in China, it is easy to see that the brand has been in the Chinese market for 24 years. However, it is only in the last few years that the brand has started to make its presence shown out, why is that? At the outset, CHAILEEDO threw out this question to Shinichi Odabe that puzzled many industry professionals.

In response, Shinichi Odabe said that there are four main reasons: first, when ALBION first entered the Chinese market, the brand chose to do the same as it did in its home country of Japan, which is to work with local cosmetic specialty stores. We are currently working with nearly 400 cosmetic specialty stores for 5 to 10 years and have gained a group of loyal consumers. Second, on the basis of the above, the brand opened its online Tmall international flagship store for the first time in 2018 and its official flagship store in 2019. The opening of the online channel has led to a significant increase in the number of brand consumers. Third, before the pandemic, many consumers go to Japan to buy our products as as a daigou, a freelance retail consultant, which also accumulated a brand impression in the minds of consumers. Fourth, the rapid development of the high-end cosmetics market in China in recent years has also played an important role.

In Shinichi Odabe’s opinion, ALBION’s route is a process of accumulation and development unlike some brands that “become popular in one day”.

It is worth mentioning that the most widely known brand differentiator of ALBION is that the brand was the first in the cosmetic field to introduce the unconventional skincare step “Lotion first, then Toner”. The brand believes that as the first step after cleansing, the penetrating lotion can be the first to repair the barrier and awaken the skin’s deep energy, creating clear, transparent and supple skin. The ALBION Toning Essence is the brand’s star product, which is loved by the market. It is reported that there are more than 20,000 notes related to “ALBION Toning Essence” and 60,000+ notes related to “ALBION” on Chinese social platform Xiao Hong Shu.

Better service, slower expanding stores

As we all know, most foreign beauty brands have been settled in Tmall, Jingdong and other online platforms as early as around 2015 to seize the first trend of online dividends in China’s Internet era. However, ALBION only entered the online channel for the first time in 2018. Is this a missed opportunity?

According to Shinichi Odabe, it is not. This is because it is closely related to ALBION’s consistent brand philosophy. “We attach great importance to the consumer’s sense of experience with the product and always believe that consumers will only buy after they have used the product in the offline store so that they will become loyal customers of ALBION.”

He further explained that the fundamental reason why 2 online stores were later opened in the Chinese market was also based on the characteristics of the Chinese consumer market, and not for performance. “The Chinese market is so big that it is difficult for us to open stores in every city in a short period of time. Therefore, online sales can better facilitate consumers to buy products.” It is worth mentioning that Shinichi Odabe added “until now, ALBION has not entered the online channel in Japan itself.”

As of now, it is reported that ALBION has opened 10 special stores in department store and cooperated with nearly 400 cosmetic specialty stores in the mainland China market. In terms of numbers alone, that’s not much for a brand that has been in China for 24 years. But Shinichi Odabe says that ALBION has no intention of “opening many stores at once” to ensure the quality of service at each store. He said, “On the one hand, the brand’s requirements for BA service is very high, but BA training needs process and time. On the other hand, ALBION’s requirements for department stores are also more stringent. The department store must be the most popular, the best location and first-class in the city.”

However, Odabe Shinichi also said that ALBION has plans to set up special stores in Hainan duty-free stores. “In addition, we will also strengthen cross-border e-commerce activities to increase the contact with consumers.”

Slow is fast

In summary, it is easy to see that, unlike most brands’ “rapid expansion”, ALBION has always conveyed a “slow and careful” pace to public. In fact, this tone is reflected in all aspects of the ALBION, especially in product development.

Shinichi Odabe said that ALBION has always put the quality of its products in the most important position. He took ALBION Toning Essence as an example and said, “The raw material of health water comes from the barley in Hokkaido. The reason why we choose to plant the raw material there is because the environment in Hokkaido is not polluted and the raw material grown is not easy to mutate and is very pure. Only good raw materials can guarantee good products.” What’s more, he also introduced that all the products of ALBION will be tried by senior employees of the company before they are launched in the market, “Only products approved by our own employees will be commercialized by us. We believe that product efficacy has a scientific basis and good sense of use, one without the other.”

Not only that, in the product sector, ALBION has also done to the perfect. It is reported that ALBION has 6 series of products nearly 120 SKUs into the Chinese market and three of these series is divided into seasonal use. Its degree of segmentation is evident.

ALBION’s 24 years of deep cultivation in China has also ushered in the best time for the development of beauty in China. As we all know, China has become the world’s second largest beauty sales market and the size of the cosmetics market is expected to exceed 500 billion yuan this year. At the same time, with the upgrading of consumption, China’s high-end cosmetics market has also grown rapidly in recent years. As the backbone of the emerging consumer force, Generation Z is also maturing. Compared to the previous generation, this generation in the demand of “beauty” is more vigorous. This is an opportunity for ALBION to grow in China.

Shinichi Odabe told CHAILEEDO that China is already the largest overseas market for ALBION. With the Chinese market currently accounting for about 20% of the brand’s global market performance, its importance is self-evident.

However, not only ALBION, “the Chinese market is important” has become the consensus of almost all foreign brands. So, how will ALBION ensure its competitiveness in the crowded Chinese market?

“The answer is products, research and development and service.” In the conversation, Shinichi Odabe stressed the importance that ALBION attaches to research and development, raw materials and talent training. He said the brand will continue to strengthen its investment in these areas. “All of that needs accumulation and development through a long time. Our goal is not to grow numerically by 2 digits per year but to achieve steady growth by constantly increasing the number of customers who recognize our brand. We believe in ‘slow and steady’ more than running at a fast pace.”

A handy tool makes a handyman. This is also the truth of “slow is fast”. In the exchange with Shinichi Odabe, the degree of importance ALBION places on research and development and brand value was revealed and this is the core reason why the brand has been standing in the world of cosmetics for 65 years.



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