Top leading Cosmetics Brands in China and full strategy analysis

Chinese cosmetics market

According to Techsciresearch.com The Chinese cosmetic market is expected to grow rapidly in the next five years due to the growing demand for premium cosmetics and the growing number of working women who tend to spend more on cosmetic products. China is the second-largest cosmetics market after the United States in terms of revenue and consumption. The beauty and personal care market is facing increasing demand due to the growing urbanization and influence of social media.

The Chinese cosmetics market is classified into:

  • skincare
  • hair care
  • bath and shower products
  • makeup cosmetics
  • perfumes
  • deodorants.

Read: China Skincare Market Guide

China Personal Care Market Segmentation as of 2018

Skincare products accounted for the largest market share in 2019 and the segment is expected to dominate the market in the next five years as well. Face make-up is still an emerging segment and is gaining popularity among younger consumers. The Chinese cosmetic industry is a very profitable one, not only big brands but also smaller brands have the opportunity to excel as long as they understand the value of branding.

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Brands should utilize innovative and personalized strategies to draw the attention of Chinese consumers. The constant growth of digitalization can help brands increase brand awareness and boost sales through local social networks and e-commerce channels.

The most important Chinese cosmetics trends in 2020

Natural and “Green” cosmetics

The growing demand for wellness beauty products and natural cosmetics has significantly increased the growth of the cosmetics market in China. Chinese consumers are increasingly aware of the importance of natural products and are much more careful to use products that are good for the skin and the body.

Male grooming Growing in China

The growth of the male grooming sector is also supporting the demand for premium cosmetics dedicated to men. This factor is a significant growth opportunity for brands that produce men’s cosmetics.

Korean Skin Care Brand Innisfree Targets Men

Cosmetics brands in China have to go for Digitalization

Digitization is one of the main factors that has had a direct impact on the growth of the cosmetics market. the constantly growing use of social media and, in general, the internet, have given brands the opportunity to increase awareness of the brand by Chinese consumers.

Chinese Live streaming & KOL

Live streaming, through video app, is very popular in China and is particularly loved by Chinese users. Live streaming might be the perfect choice when it comes to showcasing the personalization and authenticity of your cosmetics products.

The KOLs are the key that guides the listening, for this reason, currently, many Chinese KOLs are producing watch-and-learn videos to share the most important tips and tricks about cosmetics products.

Due to its ability to influence Chinese consumers, KOLs marketing is widely used by cosmetics and beauty brands in China. That’s why, by using live streaming, many brands integrate KOLs collaboration into their marketing strategies to engage large masses of users in a few minutes.

Li Jiaqi, known as the “King of Lipstick” in China or Austin Li, is a clear example of KOL’s successful digital strategy in China. It is without a doubt the best salesman of cosmetic and beauty products in China.

  • He sold Using 15,000 lipsticks in just five minutes by using Taobao live streaming
  • Thanks to live streaming about cosmetic and beauty products on Douyin, currently He has close to 40 million fans.

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

Artificial intelligence: A winning tool for cosmetic brands in China

AI in China’s beauty and cosmetics industry is making changes at the level of customer acquisition, products, and event management.

Customer experience is enhanced by the digital transformation of the beauty industry in China, such as automated retail, virtual makeup try-on and removal, and voice-guided mirror.

For example, in 2019, L’Oreal announced the China launch of an anti-acne advice application on Alibaba platforms, developed for its La Roche-Posay brand. La Roche Posay’s acne diagnostic tool uses selfies and AI to recommend the right anti-acne routine; it allows consumers to obtain a skin diagnostic from a photo of their face taken by a smartphone.

Who are the Chinese major players in China’s cosmetics industry?

According to Qianzhan, foreign brands such as Procter & Gamble and L’Oréal accounted for approximately 50% of the market share in the cosmetics industry in China.

Domestic firms (Chicmax, Pechoin, and JALA Group) occupied 17.97% of the market share. However, it’s expected to grow because, from 2014 to 2017, the market share of Pechoin increased from 1.4% to 2.3%, and that of Chando increase from 1.3% to 1.7%.

The other players are:

  • Unilever
  • Shiseido
  • Colgate-Palmolive
  • Estée Lauder
  • Amore pacific

P&G Strategy in China

The Procter & Gamble Company is an American multinational consumer goods corporation headquartered in Cincinnati, Ohio. It specializes in a wide range of personal health, personal care, and hygiene products. These products are organized into several segments including:

  • Beauty
  • Grooming
  • Health Care
  • Fabric & Home Care
  • Baby, Feminine, & Family Care.

P&G entry strategy

P&G’s entry strategy for China started in 1985 with market research and advertising. The advertising campaigns began 1-2 years before P&G even began selling products in China as part of a promotional strategy of building brand awareness and a reputation for the company.

The group started its business in China with a joint venture in Guangzhou, to produce Head & Shoulders, a type of anti-dandruff shampoo in 1988.

Toward a more localized approach

Like many other multinationals, P&G had initially entered the Chinese markets with premium products aimed at wealthy consumers, subsequently, P&G moved on to an approach that required them to truly understand Chinese consumers in much more detail and to develop and market products for meeting specific needs and at prices that would appeal to much larger potential consumers.

P&G manages companies for over 25 brands in 10 categories nationwide, including:

  • Pantene
  • Head & Shoulders
  • Olay
  • SK-II
  • Safeguard
  • Ariel
  • Oral-B
  • Crest

Many of its other global brands are also available to Chinese consumers through its e-store on the Tmall e-commerce platform owned by Alibaba.

SK-II in China

SK-II is the most profitable brand for cosmetic products in China. It is a Japanese cosmetics brand launched in the early 1980s. it is sold and marketed as a premium skincare solution in East Asia as well as North America, Europe, and Australia.

520 Valentine’s day Wechat Mini-Program by SK-II

SK-II marketing strategy in China

SK-II has rolled out a series of measures to engage with younger generations of consumers through art exhibitions and retail enhancement with the support of digital technology.

  • Brand storytelling

For example, SK-II has launched a “Power of Pitera” art exhibition with a collection of works of art that tell the story of its iconic essence Pitera, which is a liquid naturally derived from the yeast fermentation process.

In this way he has been able to exploit his marketing strategy by telling the story of the product creation, increasing consumer involvement. Furthermore, he stressed the use of natural products, which as we said earlier, are very important for today’s Chinese consumers.

  • Influencer/KOL

The brand also used the Chinese actress Tang Wei as a brand ambassador. With a bold and sincere closeup of Tang’s face, the artwork aims to showcase the transformation to clear skin that millions of women have experienced with Pitera.

  • Digitalization

All our lives today, from the time we wake up to the time we go to sleep, are driven by some form of technology, especially for Chinese consumers. That’s why SK-II is focused on digital strategy by increasing brand awareness and selling its products on Chinese apps like Wechat, Xiaohongshu, and Weibo.

SK-II Presence on China Digital Media landscape

L’Oreal

L’Oréal, the world’s largest cosmetic company, entered China’s market in 1997. Since then, L’Oréal in China has expanded and become one of the nation’s most loved and purchased luxury cosmetic brands.

L’Oréal has devoted itself to beauty for over 100 years and has developed its international portfolio of 36 brands, covering:

  • Makeup
  • Cosmetics
  • Haircare
  • Perfume
  • skincare.

Currently, 23 of its brands are present in the Chinese personal care and beauty market. L’Oréal’s sales in China grew 35% in 2019.

L’Oréal marketing strategy for China

Read the full case study

  • Digitization

L’Oréal excelled at the China digital strategies across four dimensions:

  • paid and earned media
  • owned channels
  • search
  • social media.
  • Use of social media and KOL

L’Oréal leverages social media, like Weibo, WeChat, to reach Chinese customers. Most of L’Oréal’s brands have their own official accounts on Weibo with a large number of followers.

In 2018, L’Oréal Paris announced Yuan Wang, an 18-year-old Chinese idol of the boy band TFBoys, who has nearly 40 million followers on Weibo, as the new Chinese brand ambassador. Wang fans purchased L’Oreal products worth more than 13.93 million yuan after the teenage idol became a supporter of L’Oreal’s beauty.

L’Oréal also launched its marketing strategy on WeChat. For example, YSL has created a mini-program that emulates the features of Xiaohongshu, allowing the creation of user-generated content.

  • Offline to online strategy

L’Oréal sub-brands in China are finding new ways to connect with Chinese consumers and involve them in a more entertaining consumer experience.

For example, L’Oréal China launched omnichannel retail with partners like Alibaba. This partnership led to the co-creation of the first mobile AI diagnosis application based on artificial intelligence and the first 3D makeup test service on the Tmall mini-app.

L’Oreal on Chinese Social Media

Unilever in China

Unilever has 400 brands that fall under 14 different categories. It is currently one of the biggest producers for:

  • Ice cream
  • Tea drinks
  • Margarine and ingredients
  • Cleaning products
  • Skincare products
  • Haircare products

In the category of family and personal care, its famous brands include Lux(力士), Dove(多芬), Hazeline(夏士莲), Pond’s(旁氏), and Vaseline(凡士林).

Uniliver Chinese marketing strategy

Uniliver entered the Chinese market in 1986, and in 2006, the company set up its regional headquarters in the Changning district of Shanghai.

  • Localization

One of the key objectives of Unilever’s research and development center is to increase the range of natural elements used in its products, in order to better meet the demand of local consumers.

A strategy that goes very well with the new “Green” trend of the Chinese market. The company plans to leverage its global resources to better serve its “China for China” innovation strategy.

  • Digitization

Unilever’s CEO, Jope, said that previous investments in digital analysis and transformation are now helping Unilever keep up with the changing circumstances of the Chinese market due to the health crisis.

In common with the broader trends observed across the industry, Unilever has also benefited from the growth in online spending and the push for e-commerce in general: Alan Jope CEO of Uniliver said that digitizing Unilever is one of his main priorities.

Shiseido in China

Shiseido is a Japanese multinational personal care company, which produces products like:

  • Skincare
  • Haircare
  • Cosmetics
  • Fragrance

It is the largest cosmetic firm in Japan and the fifth largest cosmetics company in the world.

Shiseido marketing strategy

  • Offline to online strategy

In 2018 the company revealed its “New Retail” strategy that combines offline and online elements. The result of this strategy was the platform called “Shiseido Official Beauty Star Product Hall”, an O2O platform that connects retailers with e-commerce and allows customers to order products not available in the store using a custom device.

The format leads to three satisfactions:

  • customers are able to purchase products that are not in the shop
  • the shop can earn revenue from the incentive
  • Shiseido can obtain user data

With the support of its new office in Shanghai, Shiseido is well-positioned to accelerate its O2O strategy.

Shiseido on Chinese Online platform
  • Digitization

In 2019 during the China Beauty Expo in Shanghai, Shiseido presented its “Beauty Method” concept store, basically a glamorous kitchen environment that combines elements of gourmet food and beauty products. It was an immersive shopping experience that made every customer feel completely spoiled. It aimed to offer customers complete advice not only on skin and makeup care but also on hair, fashion, diet, and fitness.

  • Localization through “green” products

Shiseido is going to establish a new research branch of its china innovation center in the oriental beauty valley to focus on the R&D of green beauty products in response to the market trend in China.

Read more about the success of Japanese Beauty Brands in China

Colgate-Palmolive China

Colgate-Palmolive is an American multinational company that deals with the production and distribution of:

  • Body care products (soaps, shower gel, shampoo, deodorants, shaving foams)
  • House cleaning (liquid detergents, softeners, detergents)
  • Oral hygiene (toothpaste, mouthwashes, brushes).

In addition, Colgate-Palmolive is making a foray into the beauty industry, with the acquisition of two skincare brands:

  • PCA Skin PCA, which is specialized in medical-grade in-office and take-home skincare products
  • EltaMD, which offers sun care products for broad-spectrum, everyday use, dispensed by physicians.

Both brands are similar in size and are primarily sold through professional skin care channels and online in the US and China, as well as in additional international markets.

Chicmax China Strategy

Chicmax has experienced strong growth since 2012 when it started consolidating its brands and SKUs and focused on BB cream with aggressive marketing. It is now expanding its portfolio of brands for child care, natural skincare, shampoo, and human care products.

The fast growth for this local brand in the past couple of years was driven by:

  • Some mass-market consumers who continued to trade up. Consumers are becoming more rational and eventually, they will choose good-quality products that meet their specific needs, irrespective of local or foreign brands.
  • The availability of manufacturing capacity and Taobao as a low-cost channel, which has helped numerous smaller brands experience rapid growth.

Estée Lauder

Estée Lauder on Wechat

The Estée Lauder is an American multinational manufacturer and marketer of prestige:

  • skincare
  • makeup
  • fragrance
  • hair care products

The company owns a different portfolio of brands, distributed internationally through both e-commerce and retail channels.

In 1993, the Estée Lauder was launched in China and today it is a leader in China’s prestigious beauty industry.

Estée Lauder marketing strategy for China

The company’s success is related to initiatives taken by the beauty company, which involves a marked shift in the group’s target market toward a younger demographic.

  • Social media and KOL

The company’s renewed focus on digital engagement and the use of social media platforms such as WeChat and Weibo.

The analyst further underlined the importance of Estée Lauder’s collaborations with high-profile local celebrities, such as actress and singer Yang Mi and model Liu Wen, in driving brand awareness in the Chinese market, particularly among younger consumers.

  • E-commerce

The company, which has been selling about 10 of its brands including M.A.C and Tom Ford on Alibaba’s online marketplace Tmall, said the site was the largest contributor to its online sales in China.

Amore pacific China

Amorepacific Group is a South Korean beauty and cosmetics conglomerate, operating over 30 beauty, personal care, and health brands including:

  • Sulwhasoo
  • Laneige
  • Mamonde
  • Etude
  • Innisfree.

Amore pacific marketing strategy

  • Digitization

“Amore Pacific wants to respond to the rapidly changing Chinese digital market through innovative products developed with TMIC and plans to raise its digital business capabilities to the next level through diverse cooperation such as developing products that lead trends and content to appeal to Chinese customers,” said AmorePacific CEO Ahn Sae-hong.

  • E-commerce

In 2019 South Korea’s top cosmetics maker, AmorePacific, agreed with China’s Alibaba Group to cooperate on the development and distribution of cosmetic products specialized in the Chinese market, based on cooperation through the market-research division of Tmall.

La neige 6.18 Festival Promotion on their Tmall Flagship store.

Read more about the Korean Skincare brand in China

Pechoin Online Marketing Case Study in China

Pechoin (百雀羚) is a skincare brand. Established in 1931 in Shanghai, Pechoin grew over the decades until it became a symbol of Chinese success.

Pechoin digital marketing strategy

The brand is widely seen as a pioneer of tailored digital marketing strategies, which opened the company up to a novel demographic and a younger consumer base. In fact, the brand’s repositioning on the market as a millennial-friendly brand was achieved by creating a successful visual brand identity with creative and memorable advertisings.

During the COVID-19 stay-at-home period, JD.com confirmed that sales of cosmetics and skincare products grew by 97 % year-over-year, with SK-II, Lancôme, L’Oréal SA, Olay, and Pechoin, remaining its five best-performing brands.

Péchoin on Wechat & Weibo – Official Account

Jala Group

Jala Group, known for the brands Chando and Maysu, has been one of the most successful players in the domestic market.

Chando digital marketing strategy

Some of Chando’s marketing launches have received big commitments, such as the Chando Love Lines campaign, which was launched for Mother’s Day and reminiscent of Dove’s real beauty campaign. Advertising encouraged women to embrace their “natural beauty” lines and signs instead of pursuing cosmetic procedures.

The campaign reached 2 billion people with 160 million views on Weibo, while e-commerce sales exceeded expectations with a 15 times higher than average increase in sales.

For the men’s skincare line, Chando collaborated with the “CrossFire” video game and integrated his cosmetics into the game by offering personalized equipment and character appearance.

What is the successful market strategy to sucees as a cosmetic brand in China?

E-reputation

Cosmetics are one of the products that require a lot of budget to check your reputation. Most of the time, sales depend on it.

You need to know where the Chinese go to find information. If you check the source of information, you can successfully check the reputation. To do so, the right SEO strategy and, eventually, SEM strategy are fundamental.

All the brands mentioned above, have a website in Chinese and practice SEO and SEM strategies on Baidu (the Chinese search engine).

Social media promotion

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.

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 cosmetics products like Douyin and Xiaohongshu.

Remember that in the cosmetic industry a KOL collaboration is very important to engage followers and boost sales.

What are the distribution channels to sell cosmetics products in China?

In 2018, the online retail sales value of cosmetic products in China amounted to approximately 194.4 billion yuan. This number was forecasted to exceed 350 billion yuan by 2024. More than 70 % of cosmetics sales revenue in China comes from e-commerce sites like Tmall and JD.com. There is also a Chinese professional cosmetic site called Jumei. 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 and sales.

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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