Australian cosmetics house Adore Beauty in online Chinese push

Adore Beauty will announce its expansion into China by selling products through Alibaba’s online retail platform.

Supplied Editorial Adore Beauty

One of the nation’s largest online cosmetics businesses — backed by retail giant Woolworths — will today announce its expansion into China by selling products through Alibaba’s giant online retail platform, Tmall.
Adore Beauty’s Tmall offering will feature 50 products, including six popular Australian brands that are currently not available in China, including evo, Lanolips, asap, Alpha-H, Skinstitut and ELEVEN.

While a host of Australian companies such as Blackmores, Bellamy’s and Murray Goulburn were hit last week by the Chinese government’s moves to tighten its grip on cross-border e-commerce, cosmetic imports are set to be a big beneficiary of the regulatory changes. The tax rate on cosmetics if the value of the purchase exceeds 100 yuan will now be 32.9 per cent, compared to 50 per cent previously.

“We are taking a test and learn approach. We are starting shipping out of Australia first before we look at shifting stock over to a bonded warehouse in China,’’ said Adore Beauty founder and CEO Kate Morris.

“We are assuming it is going to take a little while to get going ... But if we can go in there and offer a product that is better than the local brands, all the tax stuff becomes less important.’’

China is the world’s second-largest cosmetics consumer market, second only to the US. But it is highly competitive with more than 4000 cosmetic manufacturers, both foreign and domestic.

Ms Morris said Adore already had a number of Chinese and Asian customers in Australia and would be launching Alibaba’s payment system Alipay on its Australian web site soon.

“The Chinese market itself is pretty exciting and pretty huge. Particularly given the demand from Chinese consumers for high quality Australian products, we think it has great potential,’’ she said.

The expansion into China, Adore’s first offshore move, also coincides with the company’s 16th birthday.

It is now projecting revenues of $15m-16m this year, up to 70 per cent higher than last year, from a product range that is now 10,000 strong, compared to 6000 products a year ago.

Mobile traffic has increased by 140 per cent in Australia, overtaking desktop traffic last year for the first time.

Last year Woolworths acquired a 25 per cent stake in Adore Beauty for an undisclosed sum and the rest of the business was retained by the founders.
At the time it said Adore would become the number one online premium beauty retailer in Australia.