China’s beauty and skincare market is growing a rapid clip. In 2010, sales of beauty and personal care in China stood at US$24 billion, more than triple what it was just 10 years before. And this year, its market value is expected to hit US$34 billion, according to researcher Euromonitor International.
Succeeding in this market takes considerable work.
For the Chinese beauty and skincare market is diverse and far from monolithic. There is a significant difference in disposable income between urban and rural, between the eastern coastline and the interior, and between tier 1 and 2 cities (such as Beijing, Shanghai and Nanjing) and tier 3, 4 and 5 cities, where key competitors are expanding.
Smaller and midsized players can take a leaf from the leaders’ pages. As tier 1 markets mature, cosmetics makers such as L’Oreal and Estee Lauder are growing their brand awareness in tier 2 and 3 cities, where a growing middle class is creating millions of potential new customers – up to 260 million more over the next 10 years.
Aside from tailoring strategy to China’s shifting demographics, cosmetics makers must also look to fast-growing online sales. Direct selling of skincare is well rooted in China (Amway is particularly successful in this regard) and swanky department stores and boutiques are indispensable to attracting higher-end clienteles. But customers are increasingly taking their shopping online, interacting in forums, swapping retail tales via social media.
Deng Min, founder of Cosmetic Observer magazine believes online shopping will be key in the years ahead and for a cosmetic brand to succeed, “its social media networks need to be personalised.” Feng Guoqiang of Dong Fang Feng Xing Group pegs online shopping at 20 percent of the market value currently – and believes it will be even bigger in the future.
Brand champions and marketers must interact with their customers as never before, adapting messages when necessary while conveying a positive, consistent message. It behooves the smart marketer to be in the e-commerce game, and ahead of the social media curve.
Learn more about successful distribution in China’s cosmetics market from the experts. Register for our seminar on 13 November featuring panelists from Alibaba, Cosmetic Observer magazine and other industry experts.
By Lou Corpuz-Bosshart