e-commerce - what strategy for health and beauty cosmetics?

Any firm which is strong on its original market has to define a strategy for its international development. The question of this development has to be addressed at two (parallel) levels: the first one is to find the most appropriate local channel of "traditional" distribution in each new country where we want to start, in line with the worldwide strategy. The second challenge is to find the most appropriate digital marketing strategy in these new countries - still in line with the worldwide marketing strategy and with the image of the brands.

My company is selling Cosmetics and Hair-Care products. It was created fifty year ago by a pharmacist in France, and our quote is “from Health to Beauty”. The first market is the 22,000 French pharmacies. These pharmacies are independent, privately owned, the products are sold on the shelves but any sale person is very well educated in order to provide strong advises - there is even a legal obligation to get anytime a pharmacist in the store. No comparison with the big drugstores chains in the US where you can find chips and diet Coke next to prescription drug corner. So we had to address the strong question of our distribution strategy when we decided to launch the business in the US. We decided to sell to the Dispensing (Dermatologists) market and we convinced the headquarter to sell as well to the retail/ mass market through “upscale” and urban drugstores like the new Duane Reade with their Look Boutiques.

Very soon the US team understood the tremendous potential of e-commerce in the US since this market is growing fast and can be very profitable - if the additional margin we take from the traditional retailers more than offsets costs of the B to C distribution. The challenge is to convince the top management in Europe, since there the strategy is to develop the proximity with the pharmacies. The Group try to limit in Europe the sales of our products online arguing the lack of individualized advices to the consumers. So we are in front of two different strategies in two main continents which can hamper each other business.

A good plan for our US affiliate would consist in launching first the e-commerce for our most “mass” hair-care brand, and launch as a second step the more “technical” Cosmetics line. In the meantime the team in Europe will see all the advantages of doing e-commerce.