How is the cosmetic market doing in China in 2020?

Cosmetic market growth in China

China is the world’s second-largest cosmetics consumer market (behind the United States), with the retail sales rising by 4.2% year on year to RMB261.9 billion in 2018.

In 2019, the online retail sales value of cosmetic products in China amounted to approximately 194.4 billion yuan. It’s an extremely profitable industry, in fact, this number was forecasted to exceed 350 billion yuan by 2024.

The Chinese cosmetics market is witnessing booming online sales. The penetration rate of online cosmetics has been increasing rapidly in China since 2009, reaching 25.3% in 2018, compared to UK (12.1%), the US (10.9%), and Japan (9.2%). The online penetration rate of cosmetics in China is expected to be 31.4% in 2022.

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Chinese cosmetics consumers

From the perspective of Chinese cosmetics consumers, people born in the 1970s-1990s are the leading force whose consumption accounts for nearly 90%, of which nearly 40% is contributed by those born in the 1980s.

However, in recent years, people born between 1995 and 2000s have a growing demand for cosmetics as they enter colleges, universities, and society.

Compared with other age groups, they are passionate about online shopping, have a diversified preference for the brand and attention to high-end and affordable brands.

Foreign brands still play a dominant role in the Chinese cosmetic market, with an 86% share of total retail sales.

To meet the demand of Chinese cosmetics consumers and acquire greater market share in China, L’Oreal, Estee Lauder, Procter & Gamble, Shiseido, and other foreign brands have constantly adapted new strategies and intensified the channels’ promotion. Meanwhile, Chinese companies led by Jahwa and Marubi are also stepping up the layout of the cosmetics market.

Cosmetic Market: Post Covid-19 overview

Despite the health crisis, cosmetic manufacturer Global Cosmetics believes that China will remain a major supply chain hub for the cosmetic industry.

Brands like L’Oréal reported that its sales in China have seen a progressive signs of recovery since the country was hit by the Covid-19 outbreak, potentially marking that the cosmetic market is headed for a quick recovery post-pandemic.

This means that, despite Covid-19, the Chinese cosmetic market is still an excellent opportunity for brands.

Cosmetic trends in China in 2020

Currently, the Chinese market is dominated by skin care and makeup products. However, medical cosmetics, children’s skin care, and men’s skin care are rapidly growing.

Skincare products are the largest segment among cosmetic products in China, accounting for 55.2% of industry revenue in 2019, while hair care products are ranked second with a proportion of 18.8%. In the skin care and hair care segments, male grooming products have been growing in popularity.

The fragrances segment also has experienced steady growth in recent years. Other products include deodorants and depilatory products, accounting for an estimated 5.3% of industry revenue in 2019.

Skin care products

With the rising of fine living and skin care consciousness, Chinese female consumers are paying more attention to the effectiveness of skin care products.

Skincare products are used to clean and protect skin and keep skin healthy.

Moisturising, hydrating, whitening, and cleansing are the most valued product functions to consumers. Anyway, anti-aging effects and pore tightening are also growing.

Make-up products

Historically China’s focus was on skincare, but there’s been a clear shift towards more makeup products.

Base Makeup is one of China’s fastest-growing beauty categories. In fact, in 2019 the basic makeup category grew by 257.9% year on year compared to the average growth rate of 151.3% across all categories.

Premium fragrances in China

This segment has experienced steady growth in recent years as more Chinese women have started using perfumes.

Many experts believe that the premium fragrance market will continue to grow due to the luxury position of fragrances and its e-commerce availability. In fact, the demand for fragrances is being driven by the increasing sophisticated taste of Chinese consumers.

Few Chinese people still use fragrances, however, this segment is expected to grow in the future with the influence of globalization and with the development of perfume products that fit Chinese consumer preferences.

Eco friendly and natural cosmetics

In China, there is a stronger demand for skincare products with natural ingredients as these consumers are able to pay for a premium based on the benefits of organic beauty products. As a matter of fact, 54% of Gen-Z consumers say they value plant-based skincare when asked about skincare concepts.

Due to this new trend, many brands are adapting their strategies to Chinese consumer’s needs. For example, Shiseido’s new R&D center is focusing on the development of green products for the Chinese market.

Children’s skincare

Children’s skin care market also is faced with a growing trend of specific products for babies, like organic cosmetics, and products that contain ingredients that do not threaten the health of the child.

In fact, the most important aspects that influence the decision of parents when purchasing products for children care are convenience and organic aspects.

Men’s skincare

In an environment where there is a traditionally skewed gender ratio and preference towards the males, cosmetics that target men have seen remarkable growth in the Chinese beauty market in recent years.

Men’s willingness to use skincare and make-up products and consequently spend on such products has surged due to their growing consciousness about their appearances and looks.

How to enter the Chinese cosmetic market?

Cosmetics are one of the products that demand a lot of budgets to control your reputation. Most of the time, sales depend on it.

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 the reputation.

SEO reputation

To appear in Chinese user searches, you need to optimize SEM and SEO specifically for Baidu. Consequently, the rules to follow will be different from those that are applied to Google.

SEO (Search Engine Optimization) and SEM (Search Engine Marketing) techniques are an integral part of any digital marketing strategy. In fact, they allow companies to improve their brand awareness and brand identity online.

Social media promotion

WeChat & Weibo will always be great picks when it comes to brand recognition because they are the first social media platforms that Chinese users will use to learn more about your products and brand. Besides Wechat and Weibo, there are many other interesting platforms where you can increase brand awareness and promote your products like Douyin and Xiaohongshu.

Douyin 抖音 

Douyin is a short video app well known in China.

On Douyin videos of cosmetics products are very popular. To promote brands many experts or better called Key Opinion Leaders (KOLs) explain all the tricks to always look your best.

As a matter of fact, KOLs play an important role in this platform. Funny and creative makeup tutorials can now be found everywhere on live streaming platforms like Douyin and Little Red Book (Xiaohongshu).

Xiaohongshu

Xiaohongshu’s (RED) user-generated content plays a big role in helping Chinese consumers shape brand perception and build brand loyalty. It encourages users to share their personal experiences with products, gives tips, and provide discounted information.

This app is turning into the social commerce hub for beauty beginners and professionals alike.

Live streaming key to selling Cosmetics in China

Using live streaming to sell products is increasingly popular year-after-year.

Live streaming is very popular in China and is particularly loved by users for their ability to be transparent and authentic. In fact, in China, many brands integrate live streaming into their marketing strategies to engage large masses of users in a few minutes. The KOLs are the key that guides the listening.

Due to these reasons, live streaming might be the perfect choice when it comes to showcasing the personalization and authenticity of your cosmetics products.

KOLs marketing

Chinese KOLs in cosmetics are taking over China’s beauty market. They are producing watch-and-learn videos to share the most important tips and tricks.

KOLs marketing is widely used by cosmetics and skincare brands in China.

For example, Austin Li, a famous makeup influencer, who is famous as “Brother Lipstick” on social media, has successfully promoted multiple products.

He has over 31 million followers on Douyin and has earned 100-million likes. On Xiaohongshu, there are 40-thousand articles related to him.

Many cosmetic consumers refer to their product comments as guidelines before buying cosmetics. Austin has proven to be an impressive KOL for brands that sell cosmetics in China.

How to sell online your products in China?

E-commerce platforms in China

E-commerce in China has been going really well in recent years. China’s turnover increased by 60% and reached 12 billion euros last year. The Chinese Internet offers different types of sites where to do your purchases like professional cosmetics site (Jumei), company on-line store, and cross-border channels.

Omnichannel, such as Tmall, Wechat, and JD.com are fundamental to sell cosmetics products in China. These platforms are very useful for western brands to reach more consumers, however, you need to promote your store and try to increase the traffic.

Many brands use these platforms to reach Chinese consumers and increase sales. For example, Sephora integrate various platforms and marketing strategies to engage with their customer base on a variety of different channels including T-Mall, JD.com, WeChat, and its own website Sephora.cn.

Tmall

Tmall (天猫) is a Chinese e-commerce platform for business-to-consumer (B2C). It is a platform for local Chinese and international businesses to sell brand goods to consumers in China.

During the Tmall Beauty Awards, online sales of cosmetics, skincare, and personal-care products in China grew 46%, 40%, and 37% respectively.

Tmall has now become the de facto, primary e-commerce destination for premium cosmetics. Some premium brands, like Shiseido, are using Tmall to reach consumers.

JD

JD.com is one of the leader’s e-commerce platforms in China. JD sells a wide range of products that also includes cosmetics products, therefore it offers incredible opportunities to foreign brands that want to sell their cosmetics products in China.

Jumei

Jumei mainly provides consumers with cosmetics and luxury products. Every day, the platform recommends a dozen of popular cosmetics. The platform particularly welcomes foreign companies that are having great success with Chinese consumers.

Cross border e-commerce platforms

Besides Tmall global e JD worldwide, Kaola is one of the best cross-border e-commerce platforms for cosmetic products.

Kaola: Number one of Chinese crossborder eCommerce

Kaola is often considered by cosmetics and fashion brands as a choice to sell products in the Chinese market.

It provides international companies the opportunity to sell their products securely to Chinese consumers and is known for cost-effective and trustworthy products among shoppers since the platforms buy products directly from foreign companies.

In order to promote your brand and if you have any questions related to how to enter the Chinese cosmetic market, contact GMA now!

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