As we always like to preface – China does specialise in big numbers. Yet, the numbers for beauty show why international beauty brands of all sizes are entering or expanding, online and offline. Beauty is booming in China:
- In 2018 the total spend of China’s 220 million youth population — aged between 20 to 35 years old — on beauty products was more than RMB 518 billion ($77 billion), growing approximately 7% on 2017 (source: Tmall).
- Data from Euromonitor reveals that total retail sales of skincare products and make-up products in China reached RMB186.7 billion and RMB34.4 billion, respectively, in 2017, achieving year-on-year growth of 10.3% and 21.3%, respectively
- A key growth driver for L’Oreal in 2018 was new markets, including the Asia-Pacific region — where ongoing Chinese demand for luxury products saw like-for-like sales grow by 24.1 percent.
- China now accounts for 17.4 percent of Shiseido’s overall sales last year, up from 14.4 percent in 2017.
- Tmall has over 3,000 beauty brands already. In 2019 we will see 1,000 new brands open flagship stores on the platform.
- The total number of Chinese men who are buying beauty products is growing faster than that of women (31% year-on-year in 2018 versus 29%, respectively). This is compared to 5.8 percent rise in the global male beauty market.
The demand is clear, but numbers alone don’t tell the story; in such a competitive area – smart beauty brands being wise to the market size and opportunity – how can you stand out from the crowd and be top of mind for demanding Chinese consumers?
To find out what’s driving consumer preference and fascination, Reuter: Intelligence, the leader in China luxury insights & research has released a new China Insight Report: The New Face of Beauty in China.
Via online consumer surveys, offline focus groups, smartphone-enabled ethnography and big data analytics, the report spoke to over 300 beauty consumers in first-tier cities in China.
Here are some of the key takeaways discovered:
Reach Out with Red: the leading platform for beauty
While WeChat should still be the engine for driving digital activity in China, now is the time for strategic experimentation with Xiaohongshu, AKA Red. The report found that Red was a top source for learning about and browsing for beauty.
While the rules of the platforms for both businesses and influencerss are regularly updated to avoid overly commercial, ad-style content, it is growing to become the go-to platform for learning, browsing and related influencer content.
An official brand account and collaborations with relevant bloggers on the platform must be a priority for a beauty brand of any size.
Everyone Wants Organics: 85% of consumers will pay more for organic
Whether female, male or at different ages and stages, organic and natural are the keywords that Chinese beauty consumers are scanning for. It is not only interest and preference in their existing set of product purchases, but respondents showed clear willingness to pay a higher price if they believe the product will tick the boxes of natural, organic goodness.
The Rise of Niche: 92% of male beauty consumers prefer niche brands
With Chinese consumers being ultra-knowledgeable and well-versed in luxury, niche is popular in many forms of their lifestyles: fashion brands, boutique travel – and clearly for beauty. Not wanting to defer to the same big names that their parents might prefer, the modern generation of Chinese consumers are keen to seek out niche beauty.
Of course, beauty consumers are still purchasing the big-names, yet for brands of various size, this should give creative licence to push the boundaries of previously accepted styles, whether in packaging, marketing or product. For consumers that feel like they’ve seen it all before, dare to be bold.
KOLs: Still leading learning and influence
Today, China’s sophisticated consumers are often looking for more depth and more authentic influencers. Beauty’s obvious visual aspect still relates to the power of influencers – particularly with growing use of Red being ideal for the sector.
Yet it’s not solely about the look, with followers looking for highly detailed reviews, advice and product tutorials – beyond recommendations that merely skim the surface. The challenge with the growth of beauty influencers means that finding genuine ones is more difficult than ever before – meaning that working with the right, expert agency who can vet potential candidates and not just manage them is simply a must.
Retail Roars Back: 86% of Chinese consumers pick brick & mortar
China being a digital pioneer – a cashless society, facial recognition payment a reality, seamless nationwide logistics – does not mean that in-store retail is suffering, it instead gives physical retail opportunities for experiential O2O that is rarely seen elsewhere. (as pictured above with SK-II’s interactive digital wall, ‘The Art of You’)
The full report contains the survey percentages, takeaways across further areas, detailed findings and more – find the full report available here.