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Hard Choices: Chinese Cosmetics Entrepreneur Star Yue-Sai Kan

2010-10-08 | Bloomberg BusinessWeek

In 1990 the vice-premier of China asked me to consider starting my own business. It was shortly after Tiananmen Square and companies were leaving. I had my own TV show and I was well-known in China. "We will help you," the vice-premier told me. "It will be good for your brand image."

Even with official support, I knew I'd be starting from almost zero and I would have to be in China full-time. I couldn't commute a few days per month from New York where I was splitting my time. China wasn't like it is today. I brought my own Ajax (CL) to hotels to scrub the bathrooms before I used them.

I decided to develop a cosmetics line for Chinese women. The government had never encouraged the beauty industry, but makeup had been a frustration of mine. I have a yellow skin tone, my nose is flat, and my hair is black. I'm not a Caucasian, so why should I be using a French product? I sensed there was a need for products tailored to Asian women.

Building a business in China isn't for the faint of heart. The government is involved in everything. There are a million missiles: We can't get our products from the warehouse? Our pamphlet hasn't been approved? But the biggest challenge was creating a market. Chinese women didn't use a lot of makeup. I had to train the first group of beauty consultants in the country. I used my television show to teach women how to apply makeup. I held seminars. I even wrote a book about it.

The line became a huge success, which created new problems. We couldn't make enough products, and new product development was too slow. I had issues in the factories, and I lacked the expertise to deal with them. In 2004, I sold the brand to L'Oreal but stayed on as honorary vice-chairman. Selling was easy; what was difficult was giving up control of the company I'd worked so hard to build. You need to understand this country and have relationships to succeed here. The Chinese know much more about Americans than Americans do about them. Maybe that didn't matter during the last 20 years, but the world has changed.


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