Study confirms Chinese beauty market’s enormous potential
In a co-produced study, consulting agency NellyRodi and luxury data specialist LuxuryInsight have carried out an in-depth analysis of the highly coveted Chinese beauty market, providing key insights to understand its specificities, with a focus on consumption behaviour and local business opportunities.
The value of the beauty market in China, comprising the skincare, make-up, fragrance and personal care segments, is estimated at €34.6 billion in 2021. At an average annual growth rate of 12.3%, the market is expected to be worth €49 billion in 2024. While local players are chiefly active in the mass market segment, leading multinational cosmetics groups like L’Oréal, Procter & Gamble and Estée Lauder are estimated to have a 30.4% share of the market.
In 2019, skincare products accounted for a 58.1% share of the Chinese beauty market. Make-up accounted for 12% of sales, while perfumes only reached a 2.2% share. Yet it is the latter segment, fragrances, that seems to have the biggest potential. Between 2021 and 2024, it is in fact expected to record a 15% annual growth rate, compared to a 12.5% one for skincare.
In the skincare segment, given the growing demand for anti-age and skin repair products, the penetration rate of creams and serums has greatly increased, and they have become the segment’s leading drivers. In make-up, while foundations account for nearly half of total sales, eye products, boosted by the pandemic, have attractive future prospects.
The Chinese beauty market is largely driven by young consumers. In 2019, 18- to 25-year-olds accounted for a 39% share of consumers, and 26- to 32-year-olds for a 34% one. Between 2016 and 2019, 64% of consumers active in the market were women, but over the same period the men's skincare market is estimated to have grown by 13.6%, while the global men’s cosmetics market was increasing by a much more modest 5.8%.
China-specific features
Perfumes, eye make-up and men’s skincare are expected to be the leading beauty segments in China in the next few years. In order to win over local consumers, typified in five categories, the study, entitled ‘Beauty in China. Décryptage des mécaniques de consommation et des opportunités business’, also underlined how foreign players will need to understand the Chinese market's specificities. ‘Beauty in China’ has delved into some of the market's key features.
The first, defined as ‘China Pride’, underlines the pride the Chinese have in their rich cultural heritage. Chinese perfumery brand and retailer Scent Library, in which the Puig group recently acquired a stake, perfectly embodies how to tap this heritage in contemporary fashion.
Chinese consumers are especially keen on beauty boxes and limited edition sets. Also successful are collaborations between brands from different worlds, like the initiative featuring personal care brand Dove and Chinese tea retailer Hey Tea. As genderless products gain traction, the borders between masculinity and femininity are blurring, replaced by shared codes. Another feature to be taken into account is that of symbolism: traditional Chinese symbols and word polysemy are important.
Other features noted by the study are the penchant for oneiric fantasies and fables, and its obverse, an appetite for the digital world, exemplified by the collaboration between make-up brand M.A.C. and the ‘Honor of Kings’ video game.
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