China cosmetic market

Beauty market is booming in China

China cosmetic market growth has been accelerating for the past few years with increasing demand for high-quality foreign cosmetics. Retail sales in the industry has been increasing over previous years, doubling from RMB88.9 billion in 2010 to RMB162.5 billion in 2013. Skin-care and make-up products are the fastest growing sectors of cosmetic market showing 9.1% and 7.3% growth respectively. Foreign cosmetics gain its popularity among Chinese consumers due to increasing awareness of quality standards and “love for brand” trend in China. As a result, import of cosmetics has substantially grown in China. In 2013, perfume and toilet water import was around $97.102 million, while lip and eye make-up preparation import accounts for over $100 million. Highest import growth of cosmetics in 2013 was typical for lip and powder cosmetics being 20.9% and 25.9% respectively. As it was mentioned before, foreign cosmetic brands are more appreciated than domestic producers by Chinese consumer. Dominance of international brands in Chinese market leaves only 20% of market share for domestic producers. The major foreign brands, which dominate China cosmetic market, are L’Oréal, Nivea, Avon, Olay and Shiseido.

Cosmetic exhibitions are increasing in popularity on China cosmetic market

Foreign and domestic cosmetics providers on China cosmetic market seek to reach their clients through various channels including online shops, franchising and beauty exhibitions. The latter distribution channel has gained its popularity over the last few years. There are numerous beauty exhibitions across China, where major foreign and domestic brands are introduced. The largest and most recent exhibitions are Guangzhou International Beauty Expo, China Medical Beauty and Plastic Surgery Equipment Exhibition, Changsha Beauty, Hairdressing and Cosmetic Products Autumn Expo, Shanghai International Beauty, Hairdressing Cosmetic Products Expo, and China Beauty Expo, which is arranged for May, 2015. Of all exhibitions, China Beauty Expo is supposed to be the largest exhibition in China cosmetic market, introducing major foreign and domestic brands.

China Beauty Expo as one of the distribution channels

China Beauty Expo is supposed to be the largest and most diverse cosmetics exhibition in China cosmetic market. In 2014, it attracted 252,200 visitors from 80 countries and regions, and 1,837 companies. The number of European companies represented was substantially increased in 2014 compared to the previous year: +53% from France +53% and +36% from Germany in 2014. Other foreign brands from Italy, Spain, Singapore, Thailand, Korea, which are famous for their cosmetic products, were represented as well. In 2015 exhibition, 71,38% companies are expected to be from Asia, 10,92% from Europe, 10,03% from North America and the rest from Africa, Oceania and South America. Companies, which will be exhibited in 2015, include distributors (31,1%), retailers(department stores, supermarkets and franchises 37,18%), manufactures (including R&D 19.32%), beauty salons and spa owners(12,21%) and others.

As it mentioned above, Chinese market of cosmetics is gradually shrinking over past few years at average yearly rate of 8%. Presence of European brands is substantial and accounts for around 80% of market share with L’Oreal being a leader with over 11% of market share. This leads to shrinking number of cosmetic exhibitions across China, which seeks to promote both foreign and domestic brands. The largest exhibition, China Beauty Expo, which is taking place in May 2015, introduces a lot of domestic brands, which account for around 90% of exhibitors. However, increasing awareness of quality standards among Chinese consumers and dominance of foreign cosmetic producers create challenges for domestic cosmetics-makers.

Daxue Consulting team in Shanghai.

To learn more about the cosmetic market in China or the Chinese regulations for cosmetics, do not hesitate to contact our dedicated project managers by email at dx@daxueconsulting.com.

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