Since I’m in the process of developing a lecture on the Chinese retail market, I was intrigued by my research on the growing Chinese cosmetics market. The National Bureau of Statistics in China reported that women’s cosmetics sales had increased 10.7% in 2015, bringing the total market to $31.39 billion or 204.9 billion yuan according to recent reports in China Internet Watch (Chinese Women Bought US 31.39 billion in cosmetics in 2015, China Internet Watch, February 25, 2016).
Foreign cosmetics manufacturers and brands have been more successful in China than domestic producers. Domestic players have about 20% of the market, while international brands and joint ventures account for 80%. The local brands are starting to gain some market share especially in tier 3 and 4 cities where foreign brands might not be as easily accessible in retail stores where the bulk of sales still take place.
Other research indicates that Internet purchases make up 25% of the Chinese cosmetics market. These purchases take place on the popular malls like JD.com, Tmall, Jingdong, Taobao, Amazon, Yihaodian (owned by Walmart) and on specialty cosmetics sites developed by both global retailers and local players.
My online search uncovered several recent research studies on the Chinese Cosmetics market.
China’s Cosmetic Market, Fung Business Intelligence Group 2014
China’s Cosmetic Market, HKTDC Research, October 15, 2015
China’s Cosmetics Market Analytical Report, Gentleman Marketing Agency
Among the cosmetics retailers are Chinese retailers:
Global cosmetics brands have been very successful in the Chinese market with their brand equity playing well with Chinese consumers who are increasingly buying their products both in stores and online. Among the manufacturers and/or brands playing a major role are Procter & Gamble, L’Oreal, Shiseido, Estee Lauder, Mamonde, Chando, Innisfree, Unilever, Amway, Mary Kay, Avon. These manufacturers have been successful using a variety of distribution channels including department stores, supermarkets, drugstores, beauty salons, cosmetics retail stores, direct sales and online. Global cosmetics players are also increasingly targeting the Chinese market. Among the players are:
Some interesting trends in the market are the following:
- Growth in men’s grooming and skin care products
- Cosmeceuticals growth
- Skincare growth – whitening products, skin protection, moisturizers
- More interest in perfume especially in big cities
- Growing regulations and rules
- Growth of the premium market
- Popularity of South Korean Brands (Innisfree, Freeplus)
I hope this brief report provides some insights and access to resources on the growing Chinese cosmetics market.