Recovery growth spurt boosts beauty in China
Following the negative impact of home isolation and strict containment measures in China, beauty and personal care experienced strong sales growth, driven by demand for better skin health, products that improve personal well-being, the rise of Chinese beauty and the inevitable momentum of e-commerce and new retail experiences.
According to the latest research from Euromonitor International, sales of beauty and personal care products in China reached 573 billion yuan in 2021, a 10% increase from the previous year. Color cosmetics and fragrances have seen particularly impressive growth thanks to a broader recovery, with a notable increase in the number of consumers trading. This has impacted high-end sales and product upgrades – a clear reaction to the pandemic, with people wanting to indulge and enjoy a bit of glamour, after prolonged uncertainty and stark compromise.
Source: Euromonitor International Passport Data
Consumers Focus on Skin Health, Efficacy and Holistic Wellness
After a year of health fears in 2020, consumers have been quick to sublimate their concerns into products that offer a heightened sense of personal well-being. Skin health in particular is a key objective; dermocosmetic skincare sales increased by 19% in 2021, with strong demand for solutions targeting sensitive skin and masks. Holistic wellness will remain a key trend – the pandemic has highlighted this, and the message that physical wellbeing is integral to mental health and personal happiness is becoming firmly entrenched.
Other categories of beauty echo this. Sun care has seen consumers shift to products with more diverse and sophisticated features, such as blue light protection and haze protection. By comparison, hair care brands have seen an emphasis on scalp health and hair loss issues, while oral care has increased promises of gum health and even digestive health, such as Helicobacter pylori treatment.
Source: Euromonitor International Passport Data
The rise of Chinese beauty
Beauty and personal care in China is also progressing significantly thanks to the rise of Chinese beauty. C-beauty brands are no longer seen as a second or third choice substitute for established international brands; they appeal to consumers with high quality, affordable prices and a market vision that understands and specifically addresses the preferences of Chinese consumers. For example, household makeup brand Florasis has won over young consumers by listening to them and incorporating their feedback into product upgrades. The brand has more than 200,000 users as “beauty co-creators”, who post their feedback on social media after receiving Florasis samples during new product development.
Careful local strategies like this are one of the reasons national brands pose a growing threat to big multinational brands. National brands are now leading in certain categories – Winona in dermocosmetics, Florasis and Perfect Diary in color cosmetics, Meifubao in suncare. Chinese beauty is one of the key growth trends in 2021 and into 2022, and these brands can be expected to grow in stature and underpin further high value gains in the future. .
The rise of e-commerce and new retail experiences
With the lifting of restrictions, department stores, supermarkets and hypermarkets and health and beauty chains have all seen their sales recover in 2021. However, accelerated by the pandemic, the spectacular rise in e-commerce is expected to remain a dominant influence in the retail trade.
China is no exception to this global trend. Physical retail spaces need to offer something different – an experience that motivates consumers to attend in person. New beauty specialty stores such as Harmay are gaining traction by offering a wide range of brands and supporting them with sample sales strategies to test ranges, while actively leveraging social media to generate buzz . Likewise, many brands are partnering with e-commerce platforms to launch exclusive products online. For example, leading national brand Winona participated with Tmall Black Box to launch its new serum for sensitive skin, which has been looping in consumer reviews online. E-commerce can be expected to remain the main retail channel and growth engine for beauty in China, and the industry is embracing this rapid omnichannel transformation.
The resurgence of COVID-19 in the first half of 2022 has clear implications for retail as a whole, and beauty and personal care are no exception. The development of the Ommicron epidemic, which has spread to many parts of China, is an obstacle to growth in the wake of strict home isolation restrictions and the temporary closure of retail stores. However, the trends described here can be expected to resist. Chinese consumers and society are gradually acclimating to the virus; the severity of its impact on retail is expected to be less pronounced than in 2020, while the rapid evolution of e-commerce and the digitalization of retail are spearheading new growth opportunities.
For more information, see the full report on beauty and personal care in China. Key data analysis and results for all 100 Euromonitor International research countries can be found here. These reports provide an in-depth understanding of national market dynamics and offer essential local insights not available elsewhere.