The way Unilever PLC's fortunes diverged from a much smaller
Chinese rival highlights some of the reordering in the Chinese
retail market.
Bai Queling was founded in 1931 and is now run by a cosmetics
company implausibly named Shanghai Daily Chemical Co. Pecholin.
Selling some of its creams in packaging unchanged from the 1930s,
Bai Queling is much smaller than Unilever, ranking 27th among
beauty and personal-care brands by market share, compared with No.
4 for Unilever.
But Bai Queling, which means Hundred Birds, enjoyed a rush for
its skin-care products last year after it designed lotions and
creams for China's first lady, Peng Liyuan, to give out on official
overseas visits.
The company also marketed itself by sponsoring "The Voice of
China," one of the country's highest-rated TV shows, and by selling
creams online that weren't available in its stores. It also sold
more premium, higher-profit products online, often in decorated
bundles.
Unilever generally sells its products all the same way, though
it rolled out its Dove men's skin-care series online months before
it hit Wal-Mart store shelves and last year did the same with a
line of Lux body wash. But industry insiders say it has been too
wedded to its buy-one-get-one-free promotions at grocery stores, at
the expense of e-commerce strategies.
The result came into stark relief on China's biggest Internet
shopping day last year—known as "Singles Day"—when search volume
for Bai Queling via e-commerce giant Alibaba was about eight times
that of Unilever brands.
Singles Day, started by Alibaba Group Holding Ltd. in 2009 and
marked with big discounts on Nov. 11, or 11/11, also illustrates
the e-commerce dominance of Alibaba, which accounts for around 80%
of online transactions, according to Beijing research firm
iResearch.
Write to Laurie Burkitt at laurie.burkitt@wsj.com
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