For global cosmetic companies, China is no longer just an “emerging” market; it has become the place to be. With the highest growth rate in the world, China promises big opportunities -­ but also big challenges. More and more Western brands are trying to understand the desires of Chinese consumers;; which products will appeal to their needs and tastes and which are the best and most relevant ways of communicating with them? Chinese consumers love Western brands. However, they are beginning to seek out local cosmetic brands because these brands have a deeper grasp on Chinese needs and culture. It therefore becomes a necessity for global cosmetics companies to develop a localized approach to the Chinese market. This paper examines how online co-­creation can help engage creative Chinese consumers with Western brands. As a result, Chinese consumers can assist foreign cosmetics companies in localizing and developing more relevant products for their own markets.

1. Using Co-­Creation
to Conquer the
Chinese Cosmetics
Market

2. Contents
Executive summary 3
+ Methodology 4
China: a complex market for the cosmetics 5
industry
+ Skincare is everything 6
+ Health and beauty: 2 sides of the same coin 7
+ A new consumer group: cosmetics for Chinese men 8
Using co-­creation to engage local consumers 9
with brands and products
+ What is online co-­creation? 10
11
+ The Chinese participative spirit – a catalyst for co-­creation 12
5 rules to make online co-­creation work in 13
China
The authors want to thank Liz Grubow, Johannes Hartmann, Guillaume Legay, Kenneth Simonsen,
Stéphane Courqueux, Oleg Curbatov, Sam Flemming, Frederique Covington, Stéphane Wilmet,
Marie-­Claire Thao, Nourite Eladan for their contribution to this white paper.

3. Executive summary
For global cosmetic companies, China is no longer just an “emerging” market;; it has become the
place to be. With the highest growth rate in the world, China promises big opportunities -­ but also
big challenges. More and more Western brands are trying to understand the desires of Chinese
consumers;; which products will appeal to their needs and tastes and which are the best and most
relevant ways of communicating with them? Chinese consumers love Western brands. However,
they are beginning to seek out local cosmetic brands because these brands have a deeper grasp
on Chinese needs and culture. It therefore becomes a necessity for global cosmetics companies
to develop a localized approach to the Chinese market.
This paper examines how online co-­creation can help engage creative Chinese consumers with
Western brands. As a result, Chinese consumers can assist foreign cosmetics companies in lo-­
calizing and developing more relevant products for their own markets.
Co-­creation opportunities in China
UNDERSTAND -­ The online co-­creation approach enables to embrace the creative, sensorial and
emotional potential of Chinese consumers that is not always explored through traditional means
of research. Brands can better understand consumer needs, expectations and motivations -­ and
avoid serious communication risks related to launching a new product in China.
INNOVATE -­
consumers (not only traditional end-­users), so that the results coming from co-­creation projects
provide more innovative insights. This strategy can naturally lead to the invention of new product
categories rather than improving existing ones.
ENGAGE -­ Chinese consumers are some of the most active consumers in the world and are very
vocal users of social media. Thanks to its participative and engaging approach, online co-­creation
enables brands to create a long-­lasting relationship with Chinese consumers by becoming more
familiar to them.
5 rules to make co-­creation work
1. Involve Chinese consumers at the early 4. Use collaborative platforms
stages of new product development
5. Continue the conversation
2.
3. Start with creative consumers
3

4. METHODOLOGY
Co-­creating with Chinese consumers
Just as you would have expected, this White Paper was co-­created with the participation of Chinese
creative consumers. We decided to involve the eYeka community in this project by asking them to
share their personal beauty-­care experiences. In order to gather deeper insights, we used a projec-­
tive technique: our creative Chinese community was encouraged to imagine an American tourist
who is travelling to China and wants to better understand what Chinese women (and men) do to be
considered beautiful. Thus, the community was asked to share its “Chinese beauty secrets” with this
Community Brief
Kate is a young American woman who has decided to spend a month in China as a tourist. She is
curious about everything Chinese – people, nature, culture, cities… but as a woman, she is par-­
ticularly interested in Chinese women’s beauty habits.
-­ Do Chinese woman use the same products than in the West?
-­ Does “make-­up” means the same as in her country?
-­ Is personal grooming related to Chinese traditional medicine?
-­ Are there some differences between Chinese cities/regions?
-­ She would like to learn more about your beauty routine!
-­ Share your beauty secrets with Kate: What are you beauty rituals, beauty moments and favorite
products (make-­up, hair care, skincare…)?
-­ How do you feel after your self-­care moment?
By the way, men, you are also welcome to participate! You can ask your mothers, girlfriends or sis-­
ters about their beauty experiences or share your own self-­care experiences.
Experts’ interviews
To nourish our understanding of the Chinese beauty market, we decided to conduct interviews with
several experts. People who agreed to participate in the development of this paper are representa-­
tives of global cosmetics companies, market research experts and academics. Their experience
study. Surprisingly, even though the co-­creation with the Chinese creative community was conducted
independently of our expert interviews, we found a strong correlation between the results.
4

5. China: a complex market for the
cosmetics industry
“Chinese consumers are demanding and discerning. They are looking to brands and
products that understand their skin needs and issues and will produce results.”
Liz Grubow, LPK Beauty
As the second largest cosmetic market in Asia While global cosmetics brands must take all of
this into account when approaching the Chinese
global companies, yet it presents a huge chal-­ market, Asian brands already possess the lo-­
lenge: understanding the Chinese consumer. cal knowledge needed to connect with Chinese
consumers: “Brands from Korea and Japan are
It is a common mistake – especially in the cos-­ competing with Western brands to communicate
metics market – to consider China as one entity:
“it’s really wrong to think that what works else-­ consumer”, says Liz Grubow (LPK Beauty).
where, will also work in China”, says Stéphane
Wilmet (L’Oréal). The path to sustainable success for global
cosmetics brands is the ability to quickly im-­
Not only are climate differences evident be-­ plement localized communication and prod-­
tween regions, but the market is also develop-­ uct innovation solutions in China. Misunder-­
ing unequally – there are still large economic,
social and cultural differences between cities in can lead to failure – that is spending a lot of
China. According to Kenneth Simonsen (GfK), time and money to grow brands and products
“In Europe it is common to speak of China as that don’t resonate with Chinese consumers.
one entity, but it is important to know that there
are huge differences between cities in China”.
So “you can’t communicate with everyone in the
same manner”, concludes Stéphane Courqueux
(IFOP Asia).
Consumer voice
“ ”
“I think it’s Shiseido, the Japanese brand. As their commercials are quite good,
they always give you a feeling that their products are specially for Asian con-­
Winwin520, 26, Shanghai
5

6. Skin is everything
The perception of beauty and beauty product consumption are shaped by culture.
When it comes to beauty, skincare is the primary concern for Chinese consumers. “They are heavy
users of skincare products, which represent around 70% of their beauty consumption”, stresses Liz
Grubow (LPK Beauty).
Whiteness is the main feature of an ideal skintone in China and cosmetics companies constantly of-­
fer whitening products as well as products with strong SPF protection.
According to Guillaume Legay (Sephora), “each region is very different. So the approach of selling
beauty products should be different too. For example, Asian clients ask for skincare products, then
in Europe.” Since Asian consumers use many skin creams each day, they are interested in larger
product offerings. Furthermore, Chinese consumers are very demanding when choosing products
Consumer voice
“
“Step 1: wash my face with warm
water and cool water alternately
Step 2: toning lotion with cotton pad
Step 3: use eye cream: I will use my
-­
der the eye, just like playing piano
Step 4: Moisturizer: I will warm the
If make up, I will have 2 extra steps:
Step 5: If make up, I will use sun
screen block and make-­up base.
Step 6: use lip care stick. After using
”
the lip stick, I will put a tissue to my
mouth and rub a bit so that it looks
more natural.”
Eryu, 23, Guangdong
6

7. Health and beauty : 2 sides of the same coin
The concept of beauty in China is holistic. It is a marriage between external appearance and internal
health. Beauty-­care has a more preventive, internal function in China than in the Western world.
An example of the synergies between external beauty and health is the renewed interest in traditional
-­
ed in traditional Chinese medicine: “this is not just about the product. This is an entire concept, a phi-­
losophy, a culture. Herborist is based in a truly different approach”, says Guillaume Legay (Sephora).
Throughout the ages, traditional Chinese medicine has always been an essential part of Chinese
consumers’ lives -­ be it for health or beauty.
Cosmetic companies that understand the role that traditional Chinese Medicine plays in Chi-­
nese beauty perception and beauty product consumption can build more relevant Chinese
brand identities.
Consumer voice
“
“According to traditional Chinese saying, “use our inside to nourish the outside”,
”
which means you need to have enough sleep, balance incretion, and regularly
clean all the toxin out of our body etc. if we can have all these, your skin will be
good.”
Bigchenxi, 23, Beijing
7

8. A new consumer group: cosmetics for Chinese men
When it comes to skincare, one of the biggest differences between China and the West is that men
are increasingly active skincare consumers in China: “in the foreseeable future, men will be the
source of the next growth in the Chinese skincare market” (IFOP study)
Taking into account that there will be more young Chinese men than women in the near future, global
skincare brands will have new opportunities in product line extensions for men.
There is much less cultural resistance regarding the consumption of male skincare products in China:
“The younger Chinese man is looking for skincare expertise and does not look to traditional shaving
Foreign cosmetics brands have a unique opportunity to tap into the skincare market for Chi-­
nese men by offering them products that appeal to their needs and attitude towards beauty.
Consumer voice
“
“I don’t usually stay up late as it’s really bad for the skin, so I will avoid staying up
too late if I don’t have anything that is urgent.
I also drink plenty of water every day to make sure my skin has enough water.
Before sleep, I will give my feet a hot bath: it’s the immersion of both feet and an-­
”
kles in hot water. I usually do that for 10 minutes.
This can help improve blood circulation and it’s good to our body! This is a very
traditional Chinese way.”
Rainzeye, 22, Shanghai
8

9. Using co-­creation to engage
local consumers with brands
and products
“In the 21st century, “going local” is the ticket to success for multinational brands”
Jing Wang, Brand new China
The best way to bridge the knowledge gap in China for cosmetic brands is to directly collaborate
with Chinese consumers by using an online co-­creation approach. This approach refers to a deep
collaboration between a brand and its consumers to innovate marketing, products and communica-­
tion so that the resulting output would fully connect with consumers while conveying the brand in a
manner that best resonates with them.
The co-­creation approach has three principles:
UNDERSTAND
The purpose of the co-­creation approach is to better understand consumer needs and motivations.
It allows brands to minimize communication risks related to brand or new product launches in
the Chinese market.
INNOVATE
The online co-­creation approach is about engaging creative consumers (not only traditional end-­us-­
ers) so that the results of co-­creation projects provide more innovative ideas that are pertinent to the
consumer. These will naturally lead to the invention of new product categories or more engaging
communication rather than merely improving what already exists.
ENGAGE
By involving consumers in the creation process, co-­creation enables brands to create a long-­lasting
relationship with consumers based on trust and familiarity. This strategy then increases their pro-­
pensity to buy and recommend the brand and its products.
9

10. What is online co-­creation?
Co-­creation is an active, creative and social process based on collaboration between
producers and consumers.
Frank Piller & Christopher Ihl, 2009
There are many ways to collaborate with consum-­
ers. Yet, one of the most effective ways is via online
co-­creation. Unlike more traditional methods, this is
not about conducting focus groups or seeking con-­
sumer feedback on products already developed. In-­
stead, co-­creation is about involving consumers in
the early stages of development and acting on their
feedback throughout the innovation process.
While involving consumers at the right time is im-­
portant for any co-­creation process to be truly suc-­
cessful, pin-­pointing the right type of consumers for
the project is absolutely key for any results worthy
of the effort. Who are the right consumers to target?
Only a tiny fraction of consumers have the creative
capability that can deliver innovation breakthrough.
These people are called “creative consumers”.
Unfortunately, most market research, “crowdsourc-­
ing” initiatives or innovation-­related consumer en-­
gagement takes place within the 90% of consum-­
ers who only display “average” creative capability.
Therefore, the information provided often does not
deliver the game-­changing results or breakthrough
innovations companies need in order to stay com-­
petitive.
and engage this 1% of consumers that display
exceptional creative abilities. These consumers
can “help brands gather innovative insights,
entire new business opportunities.” (Forrester
Research, Co-­creation Vendors 2011)
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11. Rapid engagement
Online co-­creation is the quickest way to engage with Chinese consumers.
Traditional surveys can take months -­ even years -­ to deploy in a country as big as China.
As international cosmetic brands set-­up shop in T2 or T3 cities, they quickly realize that they do not
Thanks to the Internet, there are currently more than 400 million Chinese consumers accessible on-­
line. According to the Boston Consulting Group, China has the most active digital population among
the BRICI (Brazil, Russia, India and Indonesia) countries.
With the increased importance of the Internet and word of mouth communication in China, online co-­
creation is the best way to quickly become a part of consumer’s daily life.
Creative understanding
Online co-­creation taps into consumers’ creative potential and innovative insights.
Co-­creation is a collaborative task that is more enjoyable than simply answering questions.
By using traditional research techniques companies may often get results that do not reveal any new
information. Co-­creation approaches make it is easier to gather deeper and more innovative insights
and uncover less-­evident consumer needs.
Since creativity is a means of self-­expression and self-­realization, people are naturally more engaged
in creating something. And when creating for a brand, consumers build familiarity with it.
According to experts, public self-­expression is not as widely accepted in China as it may be else-­
where. For example, the need to answer to a question correctly is seen as crucial as the wrong
answer could lead to a loss of “face” (mianzi) or shame. As a result, verbal communication is less
important than visual communication. The online co-­creation approach uses projective and creative
techniques lets Chinese consumers save face and is better suited to Chinese culture than other ver-­
bal/face-­to-­face research techniques.
Relevent authenticity
Online co-­creation enables companies to enter the homes of Chinese consumers.
Observation is one of the best ways – even better than focus groups -­ for understanding Chinese
consumption habits. Nevertheless, it can be time-­consuming and the presence of a researcher can
observation while eliminating the biases of the researcher.
Online co-­creation means that creativity is no longer framed by space. Creative consumers create
when and where they want. This results in more authentic, context-­based information.
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12. The Chinese participative spirit -­ a co-­creation driver
Chinese consumers are massively online
400 million Internet users in China
The usage rate is the highest among all the BRICI countries
More than 80% of digital users use instant messaging, read news online, and stream or
download music
73% of China’s online population are aged 35 and under
Chinese Internet users spend 2.7 hours a day online
99% of young professionals are Internet users
Source: Boston Consulting Group, 2010
Chinese consumers are highly participative
UK = 50M CH = 400M
41% have uploaded photo 55% have uploaded photo
15% have uploaded video 34% have uploaded video
7% have used microblogging 23% have used microblogging
Source: Harvard Business Review
Motivation drivers for Chinese participation online
Represent my perception of a product and
show personel ways of using products.
Being recognized by the community for the
quality of my craeations
Having fun by creating something for brands
Improve my creative skills
Being rewarded for my creations
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Source: eYeka Chinese community survey, march 2011

13. 5 rules to make co-­creation work in China
1.Involve Chinese consumers in the early stages of new
product development
It is important to involve consumers in the early stages of the product development process in order
-­
product will fully satisfy his/her needs.
It is not only important to involve consumers at the right time – but also involve the right type of con-­
sumers in the co-­creation process. According to Professor Oleg Curbatov, companies should focus
on Knowledge Marketing by drawing on the skills and competencies that their consumers have.
Companies can then apply this extra knowledge by involving consumers in the brand or product
experience. According to Forrester’s taxonomy of participative consumers, the most valuable for co-­
creation initiatives are: (1) Hyper-­Engaged Customers – fans of your product or brand with whom
co-­creation is “more likely to elicit more and more useful, responses”, (2) Creative Consumers –
whose primary interest is to apply creative thinking and are thus “a prime source of innovative ideas”,
and (3) Experts – who provide brands with their “experience with the particular topic” as they are “
very familiar with a product, service, market, industry, or technology”.
3. Start with creative consumers
When one uses traditional market research methods to ask consumers what new products or ser-­
vices they would like, the results are often very limited;; they translate to suggested improvements
of existing products rather than the creation of entirely new product categories. This is because this
type of approach addresses the masses rather than working with a target audience. Innovation
comes from creative minds and we think that the co-­creation approach is the best way for Chinese
always explored enough through other means of market research.
4. Use collaborative platforms
With the increase in Internet use in China, a consumer’s involvement in a brand’s development is
now becoming more relevant than ever before. Online collaborative platforms offer brands the ability
to quickly engage with socially active Chinese consumers. Once the product has been co-­created
with the most creative consumers, these collaborative platforms make it easier to validate it with cer-­
tain types of participative consumers, like experts and the hyper-­engaged consumers.
5. Continue the conversation
Co-­creation between brands and consumers requires openness and trust. It also needs to be dura-­
ble. Therefore, to build sustainable relationship with local consumers, global cosmetic brands should
really important in the Chinese market comparing with American or European ones is that Chinese
consumers need to be accompanied, they need to feel that brands really look after them”,
says Kenneth Simonsen (GfK).
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14. About eYeka
eYeka is the global market leader in online co-­creation. eYeka leverages an international community
of creative consumers that helps companies generate creative insights, unlock innovation opportuni-­
IP protected environment. eYeka serves more than 100 leading brands such as P&G, l’Oreal, Coca-­
Cola, Unilever, Danone and Microsoft and is present in France, Singapore, UK, USA and China. For
more information: http://en.eyeka.net
The contributors to this paper:
Indre Liepuoniute, François Pétavy, Alexandre Olmedo, Maette Caudal, Joël Cere, Yannig Roth,
Xuan Long, Garance Boutrit, Claire Vandenberghe
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