Australian Cosmetics market in China
The cosmetic market in China
China is now unavoidable in the cosmetics industry. One of the main reason is the increase of the Chinese household’s income. They are more likely to invest into these product categories, and the tendency is not only concerning the biggest cities as Shanghai and Beijing, but also the second and third tier cities.
China’s economy expanded by 6.9 per cent in 2015, and even if the growth of China’s consumer goods imports slowed down in 2014, the average annual growth between 2010 and 2014 was still really high, and reached 24,7 per cent. Due to the growing awareness of appearance and personal hygiene, beauty and personal care continue its strong growth in China. This market is very competitive. One of the biggest barrier for the new brands is that the existing companies have already built up their reputation on the Chinese consumers minds.
The two major distribution channels for the beauty and personal care products are the hypermarkets and department stores. They mainly target mass products and premium products. But the e-commerce is also in the competition. According to Nomura Global Market Research, the online retailing is the fastest growing channel of all, accounting for 15, 5 per cent of the market share in 2014 and becoming the third most important distribution channel. Many consumers prefer to shop online because there is a lot of online stores which provide higher discounts than the bricks and mortar shops.
Opportunities for Australian brands
There is a lot of factors that explain the rise of the Australian products presence in China. Here is some of them:
- The safety: Chinese are more and more looking for safe products and include the safety as one of the main criteria while purchasing.
- Natural aspects: Australia is seen as a clean and natural environment, not polluted, where the raw materials are always good.
- Quality: The Chinese consumers are strongly brand conscious and are looking for premium products. The imported products are often seen as high-quality products by the Chinese.
- Regulation and customs: China has reformed its trade policies, they reduced the tariff barrier to adapt themselves to the international practices
Olive Oil Skin Care Co is a company that sell skin care products. They extremely focus on producing high quality goods. Their products are natural and made without pesticides, herbicides or fungicides. The raw materials come from an eco-friendly farm located in a beautiful rural area. Actually, their skin care products are perfectly suited to the Chinese market but it would cost a lot for them to get into that market.
Fortunately, Tmall, the famous Chinese e-commerce website, invited the company to be part of their online ecosystem. This is the result of the launch by Australia Post of a global storefront on Tmall, acting as a bridge between the Australian seller and the Chinese consumers. This exposes Olive Oil Skin care Co to millions of potential customers!
As an example of the success of that Australian brand, they had more than 2000 sales in one day during the Single Day (11 November) last year.