After finding success at home through Alibaba Group’s Southeast Asian e-commerce service Lazada, one of Malaysia’s leading halal beauty and personal-care brands is reaching beyond its regional base and jumpstarting growth in new markets, starting with China.
Beauty brand Safi, which has been a mainstay in Malaysia for over three decades and sold predominantly in retail stores in Southeast Asia, last week launched a store on Alibaba’s Tmall Global aiming to reach consumers in the world’s largest and most-attractive online retail market.
Safi’s push into the China market is its latest effort to expand its e-commerce footprint, after kicking off online sales in its home market on Lazada, then in Singapore and Indonesia two years ago. By going online with Alibaba’s Lazada platform, Safi was able to bring its Halal products, which adhere to Islamic law from production and packaging to storage and distribution, to wherever demand was.
Its online store on Lazada Indonesia was a real awakening about the power of e-commerce. It now has 56,000 followers in Indonesia and has become one of the fastest-growing source of sales for the company in the country.
“In Indonesia, e-commerce sales contribute to almost 15% of total sales. That really opened our eyes, and we’ve been much [more] active since. We’ve managed to scale up as consumers have become more willing to shop online because of Covid-19,” said Krishnamurthy Sriram, chief executive of Wipro Unza Malaysia, Safi’s parent company.
Naturally, the brand embraced e-commerce again as its first touchpoint in China, and it’s doing it again on an Alibaba platform.
“Halal consumers in China are limited in number but distributed widely in geography. The constraint was how to reach and communicate with them. That’s where e-commerce has a big role to play,” Sriram said. Safi is the latest brand to benefit from Lazada’s “Sell to China” initiative, which kicked off last September with the goal of helping Southeast Asian brands make inroads into the Chinese market through the Alibaba ecosystem. Brands like Singapore’s snack maker Irvins, Indonesian hair-care brand Ellips and Filipino cosmetics company Sunnies Face have since opened flagship stores on Alibaba Group’s cross-border e-commerce platform Tmall Global through the initiative, which provides participants with access to market insights and dedicated fulfillment warehouses as well as Cainiao’s logistics services to fast-track their shipments to Chinese consumers.
Entering the China market through cross-border e-commerce, through specific marketplaces like Alibaba’s Tmall Global and Kaola, allows international companies to sell certain goods to consumers online at preferential tax rates and without a license to operate a business in the country. Global retailers seeking to enter China for the first time can use this model to test the waters and see how consumers respond, before deep-diving into the market. It has been particularly popular among cruelty-free cosmetic brands, as this route provides a workaround to avoid animal-testing requirements.
Safi also received go-to-market support from the Alibaba-backed Electronic World Trade Platform, which helps connect global businesses with new markets via simple and straightforward regulations, offering easier access to the resources and technologies available to reach consumers in China. First proposed by Alibaba Group founder Jack Ma in 2016, the multi-stakeholder initiative has been recognized by the G20 and has built virtual free-trade hubs in China, Malaysia, Belgium, Rwanda and Ethiopia.
To mark its debut in China via Tmall Global, Safi brought some of its most popular items, such as its micellar cleansing water and Rania Gold face serum, to the new store and tapped Alibaba’s livestreaming platform Taobao Live for the first time to directly engage Chinese consumers. It also held lotteries for e-vouchers and half-price offers as part of Alibaba’s monthlong 6.18 Mid-Year Shopping Festival, a campaign that’s set to become China’s largest sales event since the outbreak of Covid-19 and a prime opportunity for brands to recover growth.
“Tmall Global provides a massive commercial opportunity for international brands to reach the growing middle class in China,” said Chris Wang, who heads up Tmall Global’s business development in Southeast Asia, Hong Kong, Macau and Taiwan. “Especially now as we battle Covid-19, we will continue to work with Lazada to contribute to economic recovery by helping businesses benefit from demand in the Chinese market.”
Leo Chow, CEO of Lazada Malaysia, echoed the commitment to help brands big and small succeed “not only in local markets but also beyond the region, including by partnering with our sister companies in China and other markets,” he said.
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