NetEase Kaola signs up high-end Japanese brands

Chinese cross-border e-commerce company NetEase Kaola has signed strategic co-operation agreements with several Japanese high-end brands.

The agreements are part of the e-commerce firm’s “made in Japan” strategy released last year whereby the firm plans to spend ¥500 billion (US$4.5 billion) to roll out more Japanese products in China.

NetEase Kaola has signed with such brands as Belulu, Dokkan Abura Das, LuLuLun, Purevivi, Sastty, Shinyakoso and Tenga.

Shortly before last year’s Singles Day on November 11, China’s annual one-day online shopping event, NetEase Kaola CEO Zhang Lei revealed the “made in Japan” strategy during a business trip to Japan.

At the time she signed agreements with six major Japanese brands: Earth, Kirindo, Kobayashi Pharmaceutical, Naris and Spa Treatment.

As a result of significant sales on NetEase Kaola, professional beauty and skincare brand Spa Treatment expanded its partnership.

Japan’s Rakuten e-commerce platform reached an agreement with NetEase Kaola in June 2016 to make it easy for Chinese consumers to buy Japanese products at relatively low prices. Rakuten sells more than 400 Japanese brands on NetEase Kaola including apparel, maternal and childcare products, affordable luxury items as well as sports and outdoor recreational equipment and accessories. Monthly gross merchandise volume (GMV) has grown by 31.6 per cent.

Rakuten is especially popular among female shoppers, with its senior manager of cross-border trading business Michio Takahashi saying the similarity between the two platforms’ key audiences is one of main reasons behind the success of the partnership. Sales at Rakuten’s flagship store in China quadrupled last year.

Sales of Japanese facemask maker LuLuLun surged 300 per cent after being part of a promotion on the NetEase Kaola platform for just two days, and during the Japanese cherry-blossom season, a promotion by several Japanese brands resulted in a surge in sales across the board of more than 40 per cent.

Japanese high-end skincare brand Three has showcased its spring collections in the NetEase headquarters in Hangzhou, including energising skincare products, make-up and limited-edition peach blossom products exclusive to the Chinese market. Created by Acro founder Yasushi Ishibashi in 2009, Three set off a make-up craze in Taiwan, Hong Kong and Thailand. Ishibashi says Three chose to enter the Chinese market through NetEase Kaola because of its trust in the e-commerce site.

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