Taiwan's cosmetics and salon industry has flourished
in the past 20 years and adds some unique elements
to the international market.
Like a missionary for a secular age, Tsai Yen-ping, founder of Natural Beauty International Group, is out to save Chinese women. "Natural Beauty has helped countless Chinese women in the past," says Tsai. "The thing I consider most now is the great social responsibility to our consumers and employees, who are as dear as my own family," says Tsai.
For Tsai, however, salvation comes about not through the abandonment of the temporal or the refinement of the soul, but through the beautification of the flesh itself--especially the skin. "As a woman, I felt sad seeing other women's skin ruined by harmful products containing chemical substances and by incorrect skincare methods," she says. "The starting point of my business is based on compassion for those women."
Tsai's zeal won her a place among CommonWealth magazine's top 10 most influential businesswomen in 2000 and placed her company on Asia Weekly's 2002 list of the top 500 Global Chinese Enterprises. Whether approached with a missionary's zeal or a hard head for numbers, beauty is big business in Taiwan. In 2004, the sales of skincare products and services in Taiwan amounted to NT$65.3 billion (US$1.9 billion), with salon services taking up 5 percent of the total sales. It is estimated that in 2008, sales will increase to NT$71 billion (US$2.15 billion).
These numbers have caught the attention of the central government. The Council for Economic Planning and Development included the skincare industry in its Challenge 2008 National Development Plan, a program intended to enrich the island and promote Taiwanese enterprises abroad.
Although the skincare industry is still dominated by Japanese and Western products, especially Shiseido, L'Oreal and Proctor & Gamble, local skincare entrepreneurs are creating cosmetics tailored for the Asian market--and finding devotees waiting at the altar of beauty.
"To Be Natural Is to Be Beautiful"
Twenty years ago, skincare in Taiwan was a minor service provided by hair salons. The whole enterprise generally consisted of just a beautician--Tsai herself started out as one--a facial chair and a mirror, often located in the corners of hair salons. Imported products and Western skincare techniques dominated the market. Tsai decided to change all that. She helped skincare salons stand on their own and introduced a seductive new creed among Taiwanese beauty practitioners, namely that local people need specialized treatments and products.
Tsai believed that skincare products were simply too limited in range to meet the needs of different skin types. From her research she determined that Chinese women's skin fits one of a hundred types, and she has set about developing products for each. "The heart of Natural Beauty is the research and development of our products," she says. Since the 1980s, her company has collabo rated with biochemists and pharmaceutical and medical experts from Australia, Europe, Japan and the United States. She claims that their latest breakthrough in skincare technology, based on human genome and stem cell research, contains bioactivities that help regenerate skin stem cells and increase the synthesis of collagen and dermal elastin.
As a pioneer of modern skincare products specifically for Chinese women, Tsai advocates preventive medical beautification, five-senses beauty therapy, as well as the integration of Western spa techniques and Chinese acupuncture and acupressure. "In order to find out why the skin of Chinese women is so different from that of Western women, I bought tons of books from the US and Europe, and then had them translated in Taiwan," Tsai says. She poured her theories on the subject into her own book, Natural Beauty: Principles and Practice.
Tsai is just as serious about training the staff for her salons, which have been up and running for two decades. Her beauticians attend at least 1,200 hours of training, lectures and hands-on practice. Potential spa managers must complete advanced business management programs.
The formula seems to be working. "There are many Natural Beauty beauticians whose husbands quit their jobs to help their wives' salon businesses," she says. Beauticians' loyalty to the company facilitated the fast expansion of franchise stores. "About 80 percent of our investors and beauticians were customers first," Tsai says. "Most of our customers and franchise stores have been with us for over 20 years."
Along the way, she created a worldwide business empire. Three decades ago, her business started with just a facial chair. Now there are over 2,500 Natural Beauty franchise stores worldwide. Today, her "To be natural is to be beautiful" slogan, which she herself proclaims in her commercials, is a well-known catchphrase in the Chinese-speaking world.
Natural Beauty, moreover, is the first Chinese brand to enter the international beauty product market. Its franchise stores, counters and spas can be found in Australia, China, Southeast Asia and the United States. In China, the company has over 30 subsidiaries, more than 800 makeover centers, and displays products at over 1,300 department store counters. In 2002, NB Biotechnology Ltd., a Natural Beauty subsidiary, was listed on the Hong Kong stock exchange.
Tapping the Wisdom of the Ancients
Other cosmetic companies and salons are finding similar success by breaking out of Western molds and in some cases looking for inspiration in ancient texts. The products of Bereb Enterprise Co., for example, are based on ancient Chinese medical theories.
Chinese literature more than 2,000 years ago was rich in herbal formulas for all kinds of skin diseases. Materia Medica of the Deity of Agriculture, the earliest Chinese pharmaceutical dictionary, composed around the time of the Qin (221-206 B.C.) and Han (206- B.C.220) dynasties, abounds with skincare formulas. Based on Chinese medical classics, such as the Yellow Emperor's Classics of Internal Medicine and I Ching, Bereb's products aim to restore normal skin cells. "Just as Chinese medicine emphasizes the harmony of viscera, it is impossible to have beautiful skin unless the skin is healthy," says Connie Lin, the president and general manager of Bereb.
Trained in Western medicine in Niigata University, Japan, Lin turned to Chinese medicine after witnessing its success in curing patients' skin illnesses. With a background in both Western and Chinese medicine, she and Bereb's R&D team develop safe beauty products from a preventive-medicine perspective.
Lin and her husband Li Jhih-cheng, also a practitioner of Chinese medicine, established Bereb 24 years ago. Like other local beauty-product companies, it was difficult to enter the market when most consumers had, and still have, the stereotype that Western cosmetics are better. While Western and Japanese skincare products that claim to contain Chinese herbal ingredients have won consumers' hearts in recent years, consumers might not know that Taiwan excels at adapting Chinese medicine for modern needs, whether medical or cosmetic.
She believes that skin "whitening" products, popular in Taiwan, provide a good example. "Many Western cosmetics contain petroleum derivatives and chemical ingredients, such as mercury and benzoic acid, which make your skin 'white' at first, but actually erode it," she says. "Skincare products made from Chinese herbs are 100 percent natural and, with no side effects, are much safer." According to Lin, there are many ingredients used in Chinese medicine that benefit the skin, such as ginseng, Chinese yam, angelica and licorice.
Lin has also applied a particularly Eastern approach to her chain of salons, Herbeauty, the first of which opened in Niigata, Japan, in 1997. Herbeauty's salon treatments are based on ancient studies and the concept of the five elements (metal, wood, water, fire and earth). "The I Ching teaches us that human beings are always part of nature, whether you live in the countryside or in a big city," says Lin. "The ways to apply Chinese massage methods should differ according to each person's physical condition, and be modified according to different moments of shihchen ," Lin says. Shihchen is an ancient division of time that indicates the circulation of blood and the flow of energy through the entire body.
The use of ancient treatments for modern ailments seems to be a success. There are over 20 Herbeauty salons in Japan, where the company averages NT$140 million (US$4.2 million) in profit a year. In Taiwan, there are over 30 Herbeauty salons and more than 200 other salons sell Bereb's products. Bereb has set up beauty centers in China and sells its products in New Zealand and the United States. "Beauty salons not only take care of women's skin problems, but also enhance women's spiritual and physical health by offering complete relaxation," says Lin.
Lai Mei-li , president of Beauty Style Art Interchange Association of the ROC, believes this marks a change in the industry. "Beauty salons nowadays emphasize the harmony of body, mind and soul," she says. "Imported beauty products accounted for most of salon sales 20 years ago, but what salons are really selling now are intangible products--the feeling of being comforted and direct human touch."
Lai's association offers professionals in the beauty industry a range of courses, including sales management, acupressure and aromatherapy. The association is finding that the appeal of these subjects is much broader than expected. Nurses, pharmacists and drugstore owners have found the subjects useful to their professions. "Nurses who work in hospice wards also come to our association to learn acupressure in order to ease their patients' pain," says Lai. "Facial and physical beautifying sessions serve as auxiliaries to Western medicines. As Taiwanese society ages, beauticians, just like physical therapists, are in great demand."
Salon Treatments for the People
As cosmetics and salon entrepreneurs add a local touch to the industry, other makers of beauty products are finding ways to bring salon treatments to a wider market. Twenty years ago, it was customary for Taiwanese abroad to purchase Western beauty products as gifts for their family or friends at home because the products were considered luxuries. Little did people know that many expensive Western cosmetics were often produced in factories in Taiwan and then marketed under foreign brand names. Great Tree Enterprise Co., for example, made products for well-known brands without ever developing a name of its own. As Western companies began moving their factories to China, Taiwanese manufacturers had to come up with new strategies to keep their businesses afloat.
In 1999, Great Tree decided to plunge into the market, launching the Dainty Design Cosmetics Co., which allowed the long -time manufacturer to sell products under its own brand. According to Yang Liang-chin, general-manager of Dainty, Great Tree's long-established expertise in R&D for international brands gave the new brand all the know-how for making the products, and the company adopted a business-to-customer strategy that allowed Dainty to offer high-quality products at a much lower price. "We were breaking the myth that high-quality products must cost a lot," says Yang.
Dainty entered the market with a simple, yet revolutionary strategy. Since facial masks cost little, compared with bottled beauty products, the company began selling a wide range of them at extremely low prices. Usually facial masks are sold in small boxes that contain five or six masks. Dainty decided to cut their profit margin in order to sell more. Their masks are sold in boxes containing 100 at the price of NT$1,300 (US$39). Unlike most companies that spend more on advertising, Dainty skips traditional advertising and uses promotions, like free giveaways, to drum up interest. "While most companies hire famous actresses or singers to advertise their products, we let our products speak for themselves," Yang says.
At first, however, sales were terrible. "Most consumers didn't believe good products could be bought at low prices," says Yang. But the company stuck to its strategy. "We sensed that a revolution in the beauty business was coming, and we started earlier than the others," he says.
In 2000, sales of Dainty's facial masks started to take off at an amazing speed, jumping from NT$1 million (US$30,070) a month to $50 million ($1.5 million). In 2004, facial masks contributed NT$500 million (US$15 million) to Great Tree's total profits. In five years, Dainty has sold over 100 million masks, an average of five per person in Taiwan.
Yang owes the success to his so-called sharing strategy. Because of the low price and convenient nature of facial masks, it is easy for their consumers to share the masks with their friends and families. Thus, Dainty turned facial masks into an everyday necessity. Other companies soon joined in. Now drugstores, convenience stores and even post offices carry facial masks.
Dainty's low prices and no-frills marketing turned out to have appeal outside of Taiwan too. "Unexpectedly, we were contacted by Taiwanese businessmen around the globe who wanted to sell our products in Japan, Saudi Arabia, the United States and even Iran," says Yang.
Dainty continued the trickle-down beauty approach by dispatching mobile beauty service centers to towns and villages and setting up "service shops" away from big cities. With low overhead, these salons could charge as little as NT$100 to $250 (US$3 to $7.50) for a facial. Community-based beauty salons and affordable prices drew in the customers.
To keep prices low and appeal to the local market, Dainty also makes use of natural ingredients common in Taiwan. Its Wan-li Herb Farm in Miaoli cultivates several kinds of plants unique to the island and provides raw materials for R&D. Dainty developed, for example, a series of skincare products that make use of the lotus, a flowering plant commonly found in Taiwan. It also developed environment-friendly soapberry beauty products. Soapberries had been widely used as natural detergents before Taiwan became industrialized.
"Overall, there is a trend of returning to the simplicity and hospitality of the good old days in the beauty industry," says Lai Mei-li. "Taiwan's beauty business holds several advantages in that we have acquired Western marketing and sales strategies, but we have our own advanced skincare technology, and we have a particular edge in the Asian market."