Skincare & Cosmetics

skincare and cosmetics

China’s cosmetics industry, which includes skincare, makeup, perfume, men’s cosmetics, cosmeceuticals and babycare products, has reached gross retail sales of US$21.94 billion in 2013.

Presently, foreign brands are still the mainstream of China’s cosmetics market, with the top three — L’Oreal Paris, Olay and Mary Kay — collectively occupying 12.45% of retail sales, according to ‘China Cosmetics Industry Report, 2013-2016’ released by

Skincare products are the largest cosmetics category in China, with its market scale in 2012 hitting US$13 billion, up 9.9% year-on-year. Among skincare products, cream and anti-aging products are the most popular, with sales standing at above 60% collectively in the China skincare product market.

According to ‘Facial Skincare — China — July 2013 Report’ by Mintel, Chinese women are developing more sophisticated routines. Even though the facial skincare market is mature, there are still gaps that exist between consumers’ needs and the products that are currently available. Diversification therefore offers an opportunity for domestic small brands and new players in the market, who were initially being squeezed by the sway of foreign giants.

The impact of rising income and increased skin concerns in China has seen the facial care industry move its focus from providing simple facial care to include those products that deliver on specialized facial care treatment.

The report also points out that products with natural ingredients and carrying “zero-burden” claims, such as additive-free products, are favored amongst Chinese consumers.

China’s makeup market sector started late, but has developed rapidly with sales in 2012 grossing US$3.8 billion, a year-on-year rise of about 20%.

The growing affluence among Chinese consumers will continue to affect the color cosmetics sector, which includes lip, face, eye and nail coloring tools. According to Mintel, as income increases and basic life quality improves significantly, Chinese women could be expected to spend more, in particular on discretionary goods like color cosmetics. Their soaring purchasing power provides the greatest long-term potential for growth.

There is great opportunity to convert millions of non-users in the lower tier cities and rural areas, while at the same time tapping into the middle classes that are spurring demand for discretionary spend items.

Another potential area for growth is men’s, children’s and infants’ cosmetics, as sales in these emerging market segments still occupy a relatively small share in China cosmetic market by sales. As of late 2012, China’s sales of men’s cosmetics stood at less than 5%, while that of children and infants’ skincare products accounted for less than 5.3%.

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