The Cosmetic Market in China is a Goldmine – Especially true in 2020

The cosmetics sector in China? A goldmine!

China is the world’s second-largest cosmetics market with RMB261.9 billion and year-on-year growth of 4.2% in sales in 2018. The market is projected to generate sales in excess of $60 billion USD by 2024. It is particularly due to countryside towns that are developing faster than Beijing or Shanghai. With e-commerce, the opportunities are huge and the number of potential customers is endless.

However, the market is dominated by a few lucky ones, especially in the high-end sector. All the big foreign brands such as L’Oréal, NIVEA, Avon, OLAY, and Shiseido are running the industry. It means they have already gained the favor of Chinese customers. In fact, over 80% of China’s cosmetics market is dominated by foreign brands.

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The current trends in the Chinese cosmetic market

Today, half of the market is dominated by skincare and make-up products. Nevertheless, there are other sectors that might be interesting to have a look such as medical cosmetics, children’s skincare, and men’s skincare that are rapidly growing.

The medical cosmetics industry in China worth $9.7 bn (RMB 65.2bn) in 2017, up from $3.4 billion (RMB 23 billion) in 2013. Children’s skincare is another potential market which is now led by two foreign brands. Johnson & Johnson is the leading company in the baby personal care market in China with a market share of 12.8% in 2017, followed by Pidgeon with 7.8%. The size of the baby care industry in China growing at a high speed, with its compound annual growth rate expected to reach 14.5% by 2023.

Johnson & Johnson’s Chinese website, with Chinese social media accounts links and e-commerce links.

According to Statista, the men’s cosmetics sector in China is increasing. In 2018, the male skincare market was estimated to reach RMB15.4 billion. In 2019 male beauty and skincare was one of China’s fastest-growing consumer product segments and it’s expected to garner over $166 billion by 2022, with a CAGR of 5.4% between 2016 and 2022, thanks to the acceptances from Chinese men that are caring more and more about their skin.

Customers trust more foreign cosmetics brands because it brings them quality and recognition. However, those brands are most of the time expensive and it allows only young or middle-aged females in big cities to buy them.

The importance of e-commerce in the cosmetic sector in China

The e-commerce of China is doing really great lately. According to iResearch China, the turnover has increased by 60% and reached 12 billion euros early in 2013. The China e-commerce market is the largest in the world with a volume of 1.94 trillion USD in 2019, of year-on-year 27%. 35.3% of the Chinese retail sales are generated online and China represents more than half of the world’s total e-commerce!

The Chinese Internet offers different types of sites to do your purchases. The traditional e-commerce platform or the new trendy social e-commerce. The main advantage of using the e-commerce site to generate your business is that you can reach many more customers, saving up the budget and the trouble of negotiation with numbers of the supermarket, shopping mall, or stores.

L’Oréal’s online flagship store on Tmall

Besides, for brands that are not able to sell directly to small cities or rural areas, e-commerce can even help to develop the market there without spending money on a distribution network. All you need to do is to promote your store and try to increase the traffic.

How to control your e-reputation in China as a cosmetic brand?

Cosmetics are one of the products that demand a lot of budgets to control your reputation and this is especially true when it concerns Chinese consumers because they will not buy a brand with a bad reputation or even no reputation. Unknown products on the Internet will be so suspicious for Chinese people.

Most of the time, sales depend on the reputation. To do so, you need to know where the Chinese go to find information. If you control the source of information, you can successfully control your reputation.

Baidu SEO: a Key tool for Cosmetic Brand ORM in China

Controlling what can be seen and not be seen is an essential part of your e-reputation. Chinese customers will first look at your cosmetic brand up by typing your brand name.

You must control what they see by making sure that only good reviews, comments, and stories are present on Baidu’s first page. That is a first and essential step.

However, just keep in mind that in China, people don’t use Google and it is blocked by the Chinese Great Firewall. Baidu is No.1 in the Chinese search market, accounting for around 70% of the total market share. Moreover, Baidu is a Mandarin-only search engine, meaning it gives priority to Chinese websites. The theory of Baidu SEO and Google one is similar but in the practices, Baidu SEO is way more complicated and has a lot of limitations.

You can check here for more information about Baidu SEO: Top Chinese Baidu SEO agency

China Social networks management

Social media are a key factor in China. Chinese cosmetics consumers, especially girls, tend to look for and trust what other users or key opinion leaders say about the product. There are two kinds of social platforms you need to care about: micro-blogging like Weibo and professional SNS like WeChat.

KOL marketing on Weibo by Cosnova (German cosmetic brand)

51.87% of micro-bloggers will search the products they see on E-commerce sites which is more than the 49.91% who will go directly to the homepage of the brand. Pictures and links in the posts will also be checked by 49.57% of the micro-bloggers so it shows that you need to build a Social Media Integration for your brand and product.

     

Being official on Social networks is being trustworthy

To do so, we advise you to create an official brand account, realize the design of it, publish interesting content about your brand, promote this account depending on your positioning and target customers.

On those sites, you will find many people, mostly girls, quite professional in cosmetics with their comment and evaluation on products they use. It is very important and it influences customers a lot.

Moreover, recently, KOL marketing combined with social media is very popular in China. KOL marketing is much more efficient and less experience compared to traditional advertising ways. KOL’s community has already trusted their KOLs, as a result, this can lead to a more high conversion rate.

GMA is an expert in the Chinese cosmetic market and digital marketing in China. We are a professional digital agency in China since 2012, specialized in:

  • Social media;
  • PR;
  • Baidu SEO;
  • KOL;
  • E-commerce

If you have any questions, feel free to contact us.

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10 thoughts on “The Cosmetic Market in China is a Goldmine – Especially true in 2020”

  1. Pingback: A panda to promote cosmetics in China | Gentlemen Marketing Agency

  2. As it is often said, China is now the 800-pound gorilla in the room that cannot be ignored. If you stop doing business with China, one day you will be shut out by China or your competitor would have overwhelmed you because of their increased market share and profit in China. Think of the successes of GM Buicks, Apple Iphones, and even the humble Ferrero Rocher chocolate found that it can ship $ 100 million worth of chocolates to China each year because of its successful marketing and branding that suited the Chinese!
    Yes, doing business in China continues to be fraught with dangers of corruption, excessive gunaxi that backfires, cultural conflicts etc But it is still the country with consistently high growth while most of the other BRICS have fallen behind. And at least you are not braving gunfire, kidnapping, and possible regime change after you seal the deals. Just think of China as a tough chess opponent who challenges you to a good game, not a gangster ready for a fight. BTW, I am about to take my third trip there this year and am actually looking forward to the challenge, as afterall the cosmetics, culture, sights and people are just such delights to experience.

  3. Ecommerce is surely the best channel in 2014. Every girls buy their product online and check on kissmiss the most popular products

  4. Pingback: 4 unavoidable social media for promoting your cosmetics in China

  5. Pingback: Why Wechat is key to promote your cosmetic brand in China

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  7. dear Sirs
    I am export manager of some italy company in cosmetics field and cloth for yourg peoples 18 40 years old
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  8. Minimalisation is a big trend thsi year in China.

    Chinese girls in 2019are pursuing colourfull cosmetics brands that come in smaller package or are effortless in their using.

  9. This pandemic really has given a big boost to foreign cosmetic Brand in China. All over the world, it looks like, skincare has profit from covid-19.
    Poeples being stuck at home, having more time, wanting to take care of themselves more, being bored and so on.

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