The new e-store will give WBA access to more than half-a-billion consumers.
WBA Executive Vice President Ken Murphy said in a statement, “Our collaboration with Tmall Global complements our presence in wholesale and retail pharmacy in China with a new, fantastic channel, through which we can distribute our beauty brands in a market with almost endless possibilities.”
“We are thrilled to be partnering with Walgreens Boots Alliance as they continue to build their brands in China, engage a new audience and meet the evolving lifestyle demands of the Chinese consumer,” said Michael Evans, President of Alibaba Group,
Small but targeted launch
WBA said in its press release that it will begin it run in China with three brands of its top brands: No. 7, Soap & Glory, and Boot Cucumber. The company’s strategy was to intentionally start small, said Murphy.
Sharing more about the strategy, Murphy told Tom Brennan, Managing Editor of Alizila, in an video interview that the company chose to lead with the three brands as they appealed to a diverse set of consumers.
The company thought its flagship brand No.7 would appeal to Chinese consumers for its “world-leading innovation” in skin care, especially in its age-defying products.
With its quirky names and eye-catching packaging, Soap & Glory targeted younger consumers looking for high-quality product that is also fun.
While Boots Cucumber is not a very popular product in the UK, Murphy said that the company’s extensive research found that it was extremely popular with Chinese consumers.
Even though colour cosmetics has experienced rapid growth, Murphy explains that the company chose to lead with skin care products as the skin care market in China is almost five times larger than make up.
In 2017, total retail sales of skincare and make-up products in China reached RMB 186.7 billion ($27.26 billion) and RMB 34.4 billion ($5.02 billion) respectively, according to data from Euromonitor.
Compared to the previous year, skin care grew 10% while sales of makeup made a 21% increase.
Room for expansion
Best-selling beauty brands on in WBA’s portfolio include Liz Earle, Sleek Makeup and Boots Botanics, which the Chinese consumers can look forward to seeing on Tmall.
The launch of the three brands is just the beginning for WBA, Murphy shares. “Today’s announcement is the first step on a path we believe offers both of us incredible potential for the future.”
“We have a huge portfolio of product in skin care, cosmetics, some in hair, but really also a huge range in healthcare products which we believe will be very interesting for the Chinese consumer in the future.”
Evans added, “We look forward to building on the relationship with WBA to continuously expand the range of product selection to better serve the more than half-a-billion consumers on our marketplaces looking for quality international beauty and cosmetics product.”
Tmall Global allows for the sale of select imported products, such as some beauty and personal-care goods, in China that have been granted preferential trade treatment by the Chinese government.
As such, many international brands have been using the site as a point of first entry when choosing to extend their business to China, said Alibaba.
According to China’s Ministry of Commerce, cross-border e-commerce grew 80.6% in 2017 to 90.24bn yuan ($14.32 billion). It observed that the growth rate has been over 50% for three consecutive years.