Private traffic is a buzzword that has gained significant traction in the retail sector in recent years. With the onset of the pandemic, numerous beauty brands have embraced the concept of private traffic, creating a fertile ground for the application of AI technologies like ChatGPT. This article delves into the evolution, current landscape, and prospects of private traffic in China's burgeoning beauty industry.
The Rise of Domestic Beauty Brands in China
The global shift in consumer behaviour has given a significant boost to domestic beauty brands in China. With economic development and increased spending power, local brands have been on the rise since the turn of the millennium. Brands like Hua Xizi and Perfect Diary have disrupted the market, which was once dominated by foreign brands. The market share of international brands has dropped from 33.7% in 2012 to around 28% in 2021. The rise of domestic brands has not only accelerated the growth of the beauty market but also laid a solid foundation for private traffic operations.
The Changing Dynamics Post-Pandemic
The beauty and personal care market in China saw rapid growth from 2016 to 2019, increasing from 339 billion yuan to 485 billion yuan. However, the pandemic has slowed down this growth, leading to increased competition. Brands are now focusing more on customer retention and private traffic building as a direct response to the challenges posed by the pandemic
The Digital Transformation
Online channels have become the most significant sales avenue for beauty and personal care products, especially post-pandemic. Brands are now required to adapt to this change and integrate online and offline operations. Private traffic has become the key to this multi-channel integration, helping brands to achieve seamless Online-Merge-Offline (OMO) operations.
Private Traffic: A Catalyst for Brand Evolution
Emerging domestic beauty brands were the first to venture into private traffic and have matured in their application. International brands, although late to the party, are catching up quickly. The penetration rate of private traffic in the beauty industry is currently around 6% and is expected to reach 8% by 2025.
The Role of Leading Internet Platforms
Major internet platforms have rolled out their private traffic tools, aiming to become the central hub for brand-customer interactions. However, most beauty brands in China still prefer WeChat as their primary platform for private traffic management.
This preference for WeChat underscores its unparalleled reach and functionality, making it a go-to choice for brands looking to build a robust private traffic strategy. The platform's diverse range of features allows for a more personalized and direct engagement with consumers, thereby enhancing brand loyalty and driving sales.
The Emerging Role of Private Traffic Service Providers
As the volume of private traffic operations grows, service providers become indispensable. Brands are increasingly relying on these providers for channel building, tool development, data analysis, and operations. The service providers are expected to diversify their offerings and integrate more openly with various platforms to meet the complex needs of their brand clients.
The Potential Applications of ChatGPT in Private Traffic
ChatGPT has several potential applications in private traffic, including content creation, AI customer service, and personalised marketing. The rapid development and cost optimization of large models like ChatGPT will accelerate its application in this domain.
Private traffic is no longer just a buzzword; it's a strategic necessity for brands in the beauty industry. As the landscape evolves, brands must adapt and innovate to stay ahead of the curve. For further insights on leveraging private traffic for your brand's growth, feel free to contact us for more information.