Posted by Administrator
Administrator
Administrator has not set their biography yet
User is currently offline
on Wednesday, 01 June 2016
in Business in China

Cosmetic Industry In China

Trends, Opportunities And How To Import Your Cosmetic Product To China

In a time driven by the selfie generation and governed by social media; with consumers in constant pursuit of societies’ definition of “beauty” and deep-rooted upward aspirations for both beauty and health, it comes as no surprise that the beauty and personal care industry continues to accelerate. Even throughout conditions of economic downturn, the beauty market has proven both its ability to achieve stable and continuous growth as well as its capacity for resilience. The plethora of published statistics, certainly affirm this pattern.

 

Data published on ‘China Internet Watch’ illustrates this projected growth. It was estimated that, in 2015 the Chinese cosmetics retail value would be RMB489.02 billion (USD74.63 billion), and that these figures would reach over RMB700 billion (USD106.82 billion) in 2017 with an annual growth rate of 20.8%. Whilst the economic slowdown in 2014 produced the lowest growth rate (12.3%) in China's cosmetics market since 2005, the worldwide cosmetics market was stronger in 2015, with a global retail total value of approximately 227.45 billion USD.

But what is driving this growth? Speculators contribute the exponential market expansion to the rise of the middle classes in New Markets (developing countries with increasing discretionary income capacity - notably China and Brazil) and to new consumer desires fuelled by social networks and E-commerce trends.

As a result of rising disposable incomes and growing consumer demands for better products, New markets show great potential for value growth in the beauty market. China, a prominent player amongst these new markets, is a prime example of how urbanization and a rapidly expanding middle class drive up consumer demand. The rapid development of the Chinese economy has seen an increase in migration of rural population to big metropolitan areas which translates into consumption. With increased access to better education and a rise in the average household income, the Chinese are dedicating more and more money to consumption – beauty products dominating their shopping habits.

Digital communications also represent a tremendous opportunity for the beauty market. The continuous internet network expansion in China and the change in purchasing habits, specifically in younger demographics, have modified the distribution of cosmetics and toiletries, boosting consumption in the central and western, previously untapped, provinces of the country. Frequently, more consumers are purchasing cosmetic products online and this will require a shift in marketing strategies and distribution within the cosmetics industry, with increasing emphasis on e-commerce.

E-commerce is a valuable investment for international players in China. Beauty retailer Sephora, recognizing the potential in this arena, has recently partnered with one of the leaders in e-commerce, ‘Jingdong – JD.com’, to reach more customers.

China’s cosmetics market currently comprises four major segments: skincare, haircare, color (make-up) and fragrance (perfume). Combined, they generate around 65-75% of the total cosmetics sales in China, skincare being the outstanding contributor of revenue. 

Currently, domestic brands only account for around 10 percent of China’s cosmetics industry, this gap in the market is where the potential lies for international companies. However, a particular area of note to brands outside of China is the added regulatory requirements on imported cosmetics, and also cultural consumer trends within China. 

Skincare is now perceived as an investment of sorts – it is the common belief, especially of Chinese women, that a pale and youthful-looking skin determines the social and economic position of a person. Studies suggest that around 80% of Asian consumers consider skin whitening to be the most important property of skincare cosmetics.

‘Cosmeceuticals’ (Okomp) hailed from Japan, have also captured a new dimension of Chinese consumers’ changing tastes. Combining the effects of cosmetic and pharmaceutical products, they emphasize green and natural aspects of their ingredients and are namely acne treatment lotions and spot ointments.  

Previously, larger companies could rely on an established reputation for safety, and this perhaps gave foreign investors the edge over domestic brands. However, recent trends have shown these larger western multinational companies such as Unilever, L’Oreal and Procter & Gamble are not faring as well with a new emerging preference towards Korean and Japanese brands. The whitening cosmetics are rooted very deeply in Chinese tradition, and these neighboring Asian nations tend to acknowledge this desire for a paler complexion, winning them popularity.

All in all, the cosmetics industry remains one of the most promising fields of business in China, with many avenues of opportunities yet unexplored – including the rising opportunity in the male cosmetics market.  Stay tuned for the second part of this article detailing the necessary steps to import your cosmetic products across China’s borders.

TRENDS, OPPORTUNITIES AND HOW TO IMPORT YOUR COSMETIC PRODUCT TO CHINA

Tags: Untagged

Comments

No comments made yet. Be the first to submit a comment

Leave your comment

Guest
Guest Monday, 23 October 2017