China Cosmetics Market

As the world’s second-largest cosmetics market, China’s market has reached 200 billion Yuan in 2011. Besides, it is also one of the fastest developing markets with a 15% annual growth.

China Cosmetics Market Today

The data from the National Bureau of Statistics of China also shows that the revenue of above-norm cosmetics enterprises has also reflected the trend:

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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.

Trends

In today’s market, skincare and makeup are the major two sectors of this market. They both have occupied about half the market.
As to the development speed, medical cosmetics, children’s skincare, and men’s skincare are the most interesting three sectors in the market.

Medical cosmetics

It’s estimated that the potential of the market will be more than 20 billion RMB. The annual growth rate is also supposed to reach 10%-20%.

Children skincare

The children’s skin care market is another potential market that is now led by Johnson’s baby, Princefrog and Mentholatum. Among them, Johnson’s has occupied over 80% of the market and the rest 20% was shared by dozens of other companies.

Men’s Skincare

According to the estimation of Euromonitor, China’s men’s skincare market witnessed a 34% annual growth in 2011. And last year it also increased by 24.4%.
The size of the market has also reached 3.2 billion RMB and is supposed to increase with more acceptance from Chinese people, especially men. Another detail to notice is that the demand for skin masks, sun block products are increasing which means Chinese men are caring more and more about their skin.

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Foreign brands are popular

Although scandals or bad news about foreign cosmetics brands coming out more and more recently, they are still enjoying the most trust from their customers. The main reasons for them to choose a foreign brand are the BRAND and QUALITY.
As a result of the high price of most big brands, most of their consumers are young or middle-aged females in big cities.

E-commerce & Cosmetics

The fierce competition with big companies in traditional distribution channels has frightened many foreign companies.
But now, there appeared a new solution for those companies: E-commerce. The turnover of E-commerce of cosmetics has increased by 67%, at 37.3 billion RMB in 2011 and it’s estimated to hit 57.7 billion RMB in the past 2012.

Source: iResearch

There are mainly two kinds of e-commerce sites: professional cosmetics sites, comprehensive sites, and company online stores such as Lancôme.

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The advantage of using the eCommerce site to generate your business is that you can reach your customers to save both the budget and the trouble of negotiation with a number of supermarkets, shopping malls, or stores. Besides, for those companies who are not able to sell directly to small cities or rural areas, eCommerce can even help them develop a market there without spending money on a distribution network there. All you need to do is to promote your store to get a better user experience and more traffic.

See also the case study on a leading e-commerce site.

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SNS (social media for Cosmetics )

As a product whose sales depend on its reputation, cosmetics are also one of the products that demand more budget on reputation control.
To control the reputation of your products, you need to know where Chinese people go to get information. If you control the source of information, you can successfully control the reputation.
And the key to this is SNS because Chinese cosmetics consumers, especially girls tend to look for and trust what other users or key opinion leaders speak about the product.
There are two kinds of SNS you need to care about: micro-blogging and professional SNS.

Micro-blogging

Microblogging, or Weibo in Chinese, engages hundreds of millions of users in China. Many people go there every day for information.
As the DCCI study shows, most people will look for further information after they get the information from micro-blogging.

• 51.87% of micro-bloggers will search the products they see on E-commerce sites;
• 49.91% of them will go to the homepage of the brand;
• Pictures and links in the posts will also be checked by 49.57% of the micro-bloggers.

What I suggest you need to build Social Media Integration for a Brand/product is to:

1. Official Weibo account
2. Realize the Design of the Weibo account
3. Publish interesting content about the Brand
4. Promote this account on different SNS platforms

Professional SNS

In China, cosmetics consumers have another place to go online to search for information which turns out to be professional cosmetics SNS sites.

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On those sites, you will find many people, mostly girls, quite professional in cosmetics, and their comments and evaluation of the products are very important and influential to others. And the information about the products is usually shown in a way of Pinterest does most of the time.
What you will need to do here is:

1. Open official accounts on major SNS, for example, WeChat
2. Monitoring the information on those sites
3. Publishing interesting content about the brand
4. Managing the community around your brand

Want to build a great-looking business website, click here!

Source: Hong Kong Trade Development Council, DCCI,  iResearch

If you have any questions about the article or want to develop your Cosmetics Brand in China, don’t hesitate to contact us for more information (see our case Study) or advice: marketingtochina[at]gmail.com

You can also read our full guide on the Top Marketing Strategies to Succeed in the Beauty Market