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P&G expands presence on Douyin amid China's economic

slowdown

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P&G adapts marketing strategy to China's e-commerce shift

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China revenue was down 15% in quarter ended September 30

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Sales from China made up 7% of P&G's total fiscal 2024

sales,

down from past

By Jessica DiNapoli

NEW YORK, Nov 22 (Reuters) - Procter & Gamble ( PG ) has

been revamping its marketing and line-up of influencers on

fast-growing Chinese shopping app Douyin in recent months,

helping its Pantene shampoo lead growth in hair care on the

platform, executives said Thursday at an investor day.

The Cincinnati-based company's investments in better

packaging for Pantene in China, and improved marketing on how

much to use, has led to share growth online, the company's head

of beauty, Alex Keith, said at the event.

"We've grown online share for more than a year now and our

portfolio is leading category growth on Douyin, the fastest

growing online retailer in China," Keith said. P&G's beauty

business globally made up about 18% of its $84 billion in net

sales in its fiscal year ended in June.

Influencers on Douyin like Ni Bi Yi, a young mom, and Chou

Dan, known for her jokes, tout Pantene's jasmine fragrance and

ability to repair their hair, according to posts on the

China-based sister app of TikTok.

P&G is looking for ways to stoke sales in China's sputtering

economy, where its revenue was down 15% in the quarter ended

September 30, dragging on the entire company. Even as P&G sees

positive trends in haircare on Douyin, the higher-end categories

the company competes in overall in China are down due to low

consumer confidence, Keith said Thursday.

To rebuild sales, the company is offering more of its

haircare and beauty brands on Douyin, and other fast-growing

e-commerce platforms, P&G executives told Asian investors in

August, according to a research note from the bank.

It is also building brand houses on Douyin, like its page

for skincare brand Olay, and putting influencers on its payroll,

according to the JP Morgan note.

Those moves are aimed at giving P&G more control over brand

messaging as it faces competitors such as Unilever's ( UL )

Dove and local brands.

SHOPPING VIA LIVESTREAM

Chinese consumers are more frequently shopping on the app,

which offers livestreamed videos, and are abandoning the

brick-and-mortar stores where P&G built up its presence over

decades, seeking to become essential in China's growing middle

class.

Influencers on Douyin entice shoppers with deep discounts,

and consumers in China believe they will get the cheapest price

on livestreams. P&G executives have said they try to balance

this approach with the company's long-term strategy of marketing

products worth higher prices.

On Olay's flagship Douyin store this week, influencers

hosting livestream videos offer 19.3% off a 260g-size body

lotion, according to a Reuters review of Douyin. A whitening

set, which lightens skin tone, is nearly 30% off.

The consumer goods maker is now introducing a Head &

Shoulders upgrade in China like Pantene's, Keith said. Similar

improvements are in the works on Rejoice, another haircare

brand, she said.

P&G is also selling Olay on Chinese lifestyle app

Xiaohongshu, which is popular with young women and often

compared to Meta's Instagram, where product reviews can

lead to purchases. Pantene, Head & Shoulders and Rejoice also

have Xiaohongshu accounts, Reuters confirmed.

P&G is overhauling its marketing in China after it lost its

footing in the country in recent years, first during the

COVID-19 pandemic when shopping quickly moved online. Then,

Chinese consumers soured on Japanese brands including P&G's

premium SK-II serum, which sells for $100.

SK-II is not on Douyin, but P&G management is open to

offering the brand on new platforms, according to the JP Morgan

research note.

P&G had spent decades building a presence in China in the

hopes of recruiting the country's billions to buy its daily use

products like Safeguard hand soap, Tide detergent and Pampers

diapers, particularly as growth in developed markets like the

United States and Europe slowed.

In its fiscal year ending June 2024, sales from China made

up 7% of P&G's net sales, down from 10% of $80.2 billion in net

sales in 2022.

Douyin is increasingly taking market share from top

e-commerce players like Alibaba ( BABA ), which also has a

popular livestreaming tool, and JD.Com ( JD ).

P&G is holding off on putting its fabric care brands like

Tide on Douyin, according to the JP Morgan note.