Published on: November 27, 2022
Since the emergence of COVID in China, the beauty and personal care sector in China has seen a surge in sales growth. Whether or not a brand is originally from China, the USA, Europe, or somewhere else, there’s huge opportunities for beauty brands in the cosmetic market in China.
China posted a 14% year-on-year increase on sales of cosmetics products last year, according to the National Bureau of Statistics. Furthermore, the cosmetic market in China hits US$81.25 billion in 2021 and it is expected that the market will exceed US$100 billion by 2025, with high-end products making up 53% of that.
Although sales of specific products like lipsticks have decreased in sales due the presence of mask-wearing, the ongoing pandemic has prompted an increase in the awareness of self-care and skin health. Skin care products now make up 52% of the cosmetic market in China and it also represents the fastest growing segment.
After 2 years of COVID-related mask-wearing, Chinese consumers were fast to channel their focus towards beauty products that offer a heightened sense of physical wellbeing. Functional cosmetics — skincare products with supplementary functions — have seen substantial boosts in the Chinese beauty and cosmetic market.
This is also reflected in other beauty categories. Consumers have been gravitating to sun care products with more sophisticated features, such has anti-pollution, as well as hair and scalp health.
What does that mean for international brands looking to succeed in the market? What resonates with consumers today?
Read the post below to identify how best to take advantage of what’s going on in the market.
The aspiration to be “bai fu mei” (fair-skinned, rich, and beautiful) has spurred the rise of what is known as the “noble lady” skincare category in China.
It refers to top-of-the-line products, such as face cream that sells for over US$1,800 a jar and ultra-luxury skincare products that require temperature-control.
In a society where historical expectations and biases are embedded in family settings and the workplace, it is now the consensus amongst among younger women that treating yourself to nice things is one of the most tangible forms of self-love and self-respect. And with China’s rising disposable income, this group of millennial and Gen-Z women are happy to fund their skincare routine with the crème de la crème of products.
Western and Japanese skincare brands dominate in market share — Shiseido, Valmont, Clé de Peau, and the likes are often the top ranking brands on Tmall and JD. A search for “noble lady skincare” in Chinese on Xiaohongshu brings up more than 300,000 user-generated posts where La Mer, La Prairie, and Sisley are just a few of the luxury brands that regularly land on the “noble lady’s” trophy shelf.
These tech-savvy generations have much greater access to product information and have become more sophisticated in their skincare routines. Chinese youths are seeing skincare as a long-term investment, and are consuming premium products as early as their 20s. Over time, effective exposure to younger consumers will only lead to even stronger, long-term growth for these brands.
Aesthetic medicine refers to minimally invasive treatments and products that offer an alternative to invasive options. Typical treatments and products include photo-rejuvenation and mesotherapy (aka “micro-needling”).
During last year’s Spring Festival in February, top influencers launched aesthetic medicine specials in livestreams so that consumers could stock-up on deals. According to Tmall data for Chinese New Year Sale 2022, aesthetic medicine sales were up nearly 40 times year-on-year. Data also revealed that demographic for buyers skewed younger than those in the West — consumers under 25 accounted for more than 50% of sales.
The popularity of aesthetic medicine has fuelled changes in skincare products and the way they are marketed.
Getting Chinese consumers to make a connection with aesthetic medicine has a powerful impact. As a result, skincare brands are carefully naming products to appeal to savvy consumers.
The Ordinary, the ultra-cheap skincare brand that everyone wants a piece of, has a weekly treatment called “AHA 30% + BHA 2% Peeling Solution” — placing an emphasis on acids’ strengths, which are like those used in in-spa chemical peels. The product is the 2nd best-selling product in Tmall’s acid exfoliant category under skincare.
There is also a race to turn aesthetic medicine into a day-to-day experience. A search for low-risk treatments on Douyin comes up with plenty of DIY tutorials. As a result, some brands are beginning to respond to the demand for at-home aesthetic medicine by combining high-tech devices and skincare.
Japanese cosmetics giant, Shiseido, and Tokyo-based beauty device company, Ya-Man, partnered together to launch Effectim in 2021, a luxury anti-ageing brand aimed at China that combines technologies from both companies. It is one of the top-selling brands in Tmall’s beauty device category. During the 2022 11.11 Singles’ Day pre-heat livestream sales event, they sold more than 580,000 units of their premium US$732 set in just a few hours.
Cosmeceuticals are cosmetics with active ingredients purported to have medical benefits. In recent years, they have become immensely popular in China due to the pandemic. Sales of cosmeceuticals increased by 19% in 2021, with a surge in demand for products aiming at skin irritations and breakouts. Compared with previous years, Chinese consumers now attach more importance to the ingredients and efficacy of products.
While most brands take a (modern) scientific spin to product development and marketing, Chinese pharmaceutical firms that produce traditional Chinese herbal medicine (TCM) are starting to gradually enter the cosmetics market in China. This new variety of cosmeceuticals often target common skin problems such as eczema, acne, and discolouration.
Local brands like Herborist and Pechoin have been gaining ground and sharing the ranks with large international players. These skincare brands have tapped into the lucrative market by leveraging their strong cultural advantage regarding TCM to secure confidence from beauty afficionados. Additionally, they have cultivated a good reputation through positive word-of-mouth reviews, endorsements from dermatologists, and being recognized by major medical institutions in China.
Chinese consumers are willing to pay a premium to avail the advantages of these TCM cosmeceuticals.
Chinese male consumers are increasingly receptive to beauty products designed especially for men. The size of the male skincare market in China was US$1.3 billion in 2021, an increase of 23.8% year‑on‑year.
And those buyers are typically younger. A recent report released by Xiaohongshu on male skincare products noted that 68% of users are the post‑90s generation.
China’s relentless “996 work culture” — working from 9am to 9pm 6 days a week — is taking its toll on people’s bodies, and there is a rise of young men experiencing stressed-induced hair loss. As a result, on social platforms such as WeChat, groups focused on hair care and men looking for hair loss prevention solutions have grown substantially.
Chinese men are looking beyond shampoo and conditioner for the answer, according to Tmall’s Hair Care Industry Consumer Trend Insight Report. They are seeking more advanced solutions such hair masks, oils, and tonics. Customized wigs and hair pieces are also seeing a surge in popularity.
Beauty brands in China are heavily reliant on KOLs for promotions and sales. This is most evident in the week running up to the 618 and 11/11 shopping festivals, where many new endorsements are announced over a short period of time. Some people represent an entire brand, while others rep a particular product line, and others still do promotions for a single product.
As a result, brands and e-commerce platforms in China are shifting their focus towards building customer loyalty, which promotes sustainable business growth. One of the main tactics that Chinese beauty brands are using to increase customer stickiness is to allow their customers to participate at the early stage of product development.
For instance, Florasis has pioneered the co-creation model that is fast-becoming standard practice in the Chinese cosmetics industry. Hundreds of customers are invited to participate in blind tests that take place throughout the stages of product development. This approach guarantees a successful product launch for the brand every time.
Though consumer behaviour in the cosmetic market in China has been permanently altered due to the pandemic, these shifts (in many cases) have also accelerated trends that were already taking place. While the resurgence of COVID-19 in 2022 has been an obstacle to growth for some brands, the trends outlined here can be expected to prove resilient.
It’s safe to say that the rapid evolution of e-commerce in China presents new growth opportunities for local and global beauty brands alike.
Let's take the first step.