China's Cosmetics Market

China’s Cosmetics Market and Digital Marketing: 2022

China is the world’s second largest cosmetics consuming market. The marketing channels are booming in China, making it easier for foreign brands to enter the market. Moreover, the local consumer interest in overseas cosmetic products remains high. In this article, we will provide an overview of the China’s cosmetics market and how to market cosmetic brands using the right China digital marketing practices for 2022.

 

  • China’s cosmetics market size reached 6 billion yuan in 2021. The estimate shows that it will go up to 564.4 billion yuan in 2025.
  • In China, the share of online retail sales value of cosmetic products in the total cosmetics retail market is gradually increasing from 4% in 2014 to 84.2% in 2020.
  • More than half of the consumers prefer the foreign cosmetics brands than domestic ones.

 

China’s Cosmetics Market Introduction

Typical cosmetics products mainly satisfy the need of cleaning, grooming, and beautifying the human face and body. In China, the products cover skincare, color cosmetics, haircare, and toiletries. The cosmetics industry is one of the fastest growing and most promising business sectors in China. As of 2020, China became the world’s second-largest beauty and personal care product market after the U.S. Under the influence of urbanization, growing disposable income, and social media, the beauty and personal care market is facing a surge in demand for higher quality, premium branded products.

 

Value of beauty and personal care market worldwide

Value of the Beauty and Personal Care Market Worldwide, by leading country

 

Moreover, foreign cosmetics products play an essential role. According to Statista, 57% of the consumers prefer foreign cosmetics brands in China. Besides, four of the top five popular cosmetics brands are from overseas. The foreign companies with the largest market share in the Chinese beauty market are L’Oréal, Estee Lauder and Procter & Gamble. Nearly half of China’s imported cosmetics come from Japan and South Korea, while brands from France, Singapore and the United States account for more than 30 percent of cosmetic imports.

 

China's Cosmetics Market leading brands

Leading Cosmetics Brand in China, based on market share

 

E-commerce

In 2020, around 84.2% of the total cosmetics retail sales in China are through online channels, increasing from about 78 percent in the previous year. Cosmetics accounted for 6.24% of the overall online retail transaction value. These numbers prove that Chinese beauty customers are maintaining a high level of consumption in online retail. Moreover, the outbreak of the coronavirus pandemic in 2020 boosted the development of China’s beauty e-commerce.

 

China's Cosmetics Market online retail sales value

Online Sales Share of Total Cosmetics Retail Market in China

 

Consumer Preferences Trend

Skin Care

Skincare products are the largest segment among cosmetic products in China, accounting for 55.2% of industry revenue in 2019. With the rising of fine living and skincare consciousness, moisturizing, hydrating, whitening, and cleansing are the most valued product functions for female consumers. Furthermore, Anti-aging effects and pore tightening are also growing. Moreover, products made from natural or herbal ingredients are gaining popularity. In 2018, sales in this segment were 5.3 times higher than five years ago, and the consumer base was 4.2 times higher than in previous years. In the future, cosmetics with natural ingredients are expected to capture more market share.

 

Flagship Store

In 2021, Tmall and JD were the dominating channels with the market share of 47.1% and 16.9% respectively. Moreover, as for the types of online stores that were most popular with customers, online flagship stores listed on the platforms accounted for the largest market share with 45.4%. This reveals Chinese consumers’ preference for online shopping. That is, they are likely to shop at stores that are directly operated by cosmetics brands online.

 

Male Cosmetics

Men’s willingness to use skincare and make-up products and consequently spend on such products has increased due to their growing consciousness about their appearances and looks in China. According to estimates, the male skincare and cosmetics retail sales in China reached 13.5% annual growth rate during 2016-2019. Those numbers are even more impressive when compared to the global average rate of 5.8%. This data is also verified online. For instance, in 2018 on Tmall men skincare recorded the fastest growth as sales increased by 70% and makeup sales by 15%. This is not only a trend, but a profitable opportunity, showing there is a huge demand that has yet to be answered.

 

Perfumes and fragrances

Perfumes and fine fragrances are untapped and relatively new in the Chinese market, and therefore have a huge growth potential.

This segment has experienced steady growth in recent years as more and more Chinese have started using perfume. Many experts believe that the premium fragrance market will continue to grow due to the luxury status of perfume and its availability for e-commerce. Indeed, the demand for fragrances is being driven by the increasingly sophisticated tastes of Chinese consumers. Few Chinese still use perfume, but with the impact of globalization and the development of perfume products that suit Chinese consumer preferences, this segment is expected to grow in the future.

 

What drives Chinese to buy cosmetics?

In this part, we are discussing the motivators of consuming cosmetics products for Chinese people.

 

Appearance Anxiety

As people grow or age, they have skin wrinkles, spots, lose elasticity, dark gloss, and gradually age. They are born beautiful, naturally afraid of the idea of getting old, and worry about premature skin aging. Moreover, under the development of social media, people are more easily influenced by good looking celebrities, so they naturally desire the same beauty. Therefore, they will hope cosmetics could help them retain a youthful face. If a product markets itself as an anti-aging or antioxidant product, consumers will have a special liking to it. This is why Anti-aging products are so popular.

 

Vanity and Imitating Behavior

Some people tend to have better items than others based on their financial means, spending habits and personal preferences.. For cosmetics and beauty shoppers, this could be better and more updated products. In addition, some women are very concerned about their surroundings. When they see their colleagues buy a premium perfume, they will want to have the same, or even a more expensive one. If others purchase their favorite cosmetics product, they will feel nervous and have no sense of superiority.

Some of the consumers frequently admire celebrities or opinion leaders and follow their fashion styles closely. Moreover, following their styles gives them a sense of identity, making others tell they belong to someone’s fan group. Sometimes, they not only want the similar style, but also the exact same outfits. As a result, the imitating behavior shows up by copying the celebrities’ look.

 

“Little Fresh Meat Effect” – Chinese Internet slang

Andre Hoffman, president of beauty brand L’Occitane Asia Pacific, said the company achieved double-digit growth in China in 2017, with net sales up 11 percent and an impressive 49% increase on Tmall. He noted that this was due in large part to Luhan’s effect.

Luhan is a Chinese singer and actor. He is the face of China’s little fresh meat legion. The term “little fresh meat” emerged a few years ago to describe a younger generation of Chinese male idols. Its origins can be traced back to Japan and Korea, and it has become popular along with Korean pop music, Japanese pop music, anime and manga. Always beautifully dressed, with childlike looks and refined silhouettes, these rather feminine boys have the largest following on social media and have also won the favour and purchasing power of Chinese millennial women. As brand ambassadors, they are highly sought-after, often appearing in campaigns that can cost millions of dollars. Luxury brands are quickly learning to capitalize on this trend as one of the shortest ways to sell their products to younger consumers.

 

China Digital Marketing Practices for Cosmetic brands

China’s Digital Ecosystem is the playground (or battlefield) for Local and imported Cosmetics/Beauty brands. The diversity and uniqueness of online shoppers and digital channels in China make it hard to implement a winning digital marketing plan. Here are a few best practices to keep in mind while strategizing your China market entry.

 

Calendar Promotions

Beauty and Cosmetics shoppers have different concerns at different times. For skin care products, people are concerned about moisturizing and repairing in spring, autumn and winter, and they are concerned about sun protection, whitening and cleaning in summer. However, there is almost no off-peak season for color cosmetics.  Due to the reasons that drive consumer to shop cosmetics and the online retail situation in China, there are two other types of important marketing nodes in the cosmetic industry:

  1. The e-commerce shopping festivals, such as the annual 618 Shopping Festival (June 18th), Double 11 (aka, the Single Day, November 11th), Double 12 (December 12th), and etc.
  2. Domestic or international festivals, such as New Year’s Day, Valentine’s Day, Women’s Day, 520 (May 20th), Qixi Festival (aka Chinese traditional Valentine’s Day), Christmas, and etc.

 

The promotion time of beauty brands should be consistent with the listed nodes above. Before each big promotion, cosmetics brands should do pre-warming and promoting for recognition in social platforms 1 to 2 months in advance. For example, Judydoll, a Chinese makeup brand, concentrates its postings on LRB in April to May and August to November. These times correspond to the 618 Shopping Festival, the 520 (May 20th), the Qixi Festival, and the Double 11 Shopping Festival, respectively. Another famous makeup brand Perfect Diary has similar marketing nodes to Judydoll, focusing on new products from March to April and from August to September each year and doing a lot of KOL social media placement.

In addition, the promotional content of beauty brands should also be in line with the meaning and cultural attributes behind these holidays. In 2019, several important sales growth inflection points for Florasis are March, May, September and November, which also correspond to these major marketing nodes respectively. Notably, Florasis launched a special “Qixi Eyebrow Painting” campaign for Qixi Festival, which corresponded to the cultural tradition that men would help their lovers paint their eyebrows on that day in ancient times. It simultaneously launched a limited edition glazed gift box for the second anniversary, which became an extremely hot seasonal product.

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Chibna's cosmetics market Florasis’s Qixi Campaign

Florasis’s Qixi Campaign

“Lipsticks lock the two loving hearts, Drawing Eyebrow for you forever”

 

Influencers Promotion

New beauty brands in marketing communications, generally use a combination of different marketing roles. For example, through celebrity endorsement overhead to create momentum, with the KOL experts to promote deep recommending, private domain operation of users to promote retention and repurchase.

A systematic evaluation model can be introduced in the direction of celebrity endorsement to understand whether the celebrity can achieve the company’s marketing objectives. This should be done in six dimensions: brand fit, media buzz, development plan, business value, public opinion risk control and cost effectiveness.

According to a study by the Cato Consumer Index Personal Makeup Sample Group, girls aged 20 to 29 years old contribute 45% of the makeup market sales, although they only account for 28% of the population. Young consumers are more likely to be influenced by KOL’s recommendations on social media in their choice of cosmetics use and shopping decisions. According to the 2017 Beauty Innovation Report for Millennials, 63% of Millennials say they are more likely to trust the former when faced with KOL/user reviews and brands’ own promotions.

For example, under the premise of constantly announcing the spokesperson of each product category, Perfect Diary drives the brand awareness through celebrity artists, which is conducive to the communication cooperation with famous KOLs; at the same time, the famous KOLs will influence the willingness of small and medium-sized experts to cooperate. And, for small and medium-sized experts, they can generally promote the trial by giving away products, which reduces the communication cost. The complete communication chain composed of the above and below is conducive to the creation of the “whole network recommended” boom atmosphere.

 

Perfect Diary Influencer Structure

 

Social Media Promotion

Different platforms satisfy different marketing needs. According to China Cosmetics, short video platforms (32.3%) and social media (48.3%) are the main channels for young consumers to get information about color cosmetics products. In addition, live e-commerce (25.74%), short video (15.19%), and private domain (12.66%) are new channels for consumers to purchase. Brands need to focus on their current situation and decide to promote on different platforms.

For example, Lancôme Weibo uses celebrities and fashion hashtags to trigger traffic in stages, and uses beauty and fashion KOLs and fan circle interest groups to generate UGC content for long-term promotion.

 

Lancôme Weibo Celebrity & Fan Circle Promotion

 

Little Red Book is both a social media and e-commerce platform relying on UGC (User Generated Content).  Lancôme mainly conduct  professionals’ product reviews, makeup tutorials and single product promotions on it. For how to successfully start, market and promote your brand on LRB, please see our LRB guide.

 

Lancôme LRB Ingredients Introduction/ Tutorial/ Testing/ Product Promotion

 

On TikTok, they mainly promote product features, coupons, themed makeup for different seasons, and corporate culture.

 

Lancôme TikTok Testing/ Coupon Promotion/ Theme Promotion

 

Live Streaming

From this year’s burst of marketing cases, cosmetics live streaming marketing is experiencing some new changes. Businesses have come up with a variety of ways to create a distinctive live environment and capture attention. For instance, Herborist designed an ancient palace scene for its live broadcast and had the host and assistant dress up as concubines or kings. This was the first time consumers and viewers had the experience of following a drama in a beauty brand’s live streaming room.

 

China's Cosmetics Market Herborist

Herborist Live Streaming & Official Account

 

In this way, the current number of followers is 214,000, growing by 142,000. Recently the number of real time views has been maintained above 20,000, and it has entered the TOP 50 of the real-time viewer list of TikTok live by sales volume. Many brands are now trying other new approaches as well. For example, not to introduce products and sales as the main content of the live broadcast. Instead, they mainly introduce the professional knowledge or share their personal stories (relates to the brand or product) with customers in the live broadcast. These approaches have yielded good results, which means you can try more innovative ways to promote in the live stream. . To better start and win the live streaming journey in China, please see our Tmall live streaming guide part 1 and part 2.

 

Conclusion

China is the world’s second largest cosmetics consuming market with a fast growing speed. For cosmetics brands, it is very important to seize the right time node and shopping festival to choose the right influencer, and to market the right products in China. As an agency with 13-years digital marketing experience in China, Sekkei Studio can help your cosmetics and beauty brand enter and grow in the China’s cosmetics market. Our consultants can help you strategize the most suitable approach for your brand in China. Let us know more about your project for China.

 

Hamza Ouarit

Marketing Consultant and General Manager of Sekkei Studio, a 13 years old digital marketing agency in Shanghai, Paris and Hong Kong. Hamza has been helping brands, corporations, and governments with their China Digital Marketing strategies and contributes actively to seminars and conferences.

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