ANALYSIS 29
Eye on China: how the beauty market is developing
n Robert McPherson, Dr Sharon Qu - Lubrizol, Australia
Within the beauty industry, East is meeting West with the Asiafication of the cosmetics industry in the US and Europe, with K-beauty and J-beauty brands becoming more and more popular in western countries but what about C-beauty? Due to the diversity in consumer groups across a large geographical area and a variety of different income celling’s in China, has led to the emergence of C- beauty. Unlike K-beauty and J-beauty which is led by global players such as Shiseido, KAO, Amorepacific and LG, and an extremely hard and expensive market to operate in, C- beauty, on the other hand, offers space, opportunity, and riches for, multinational, local and overseas brands. C-beauty operates on multiple platforms such as E-commerce such as Alibaba, M-Commerce such as WeChat as well as traditional brick and mortar shops such as “New Century Global Center, Chengdu” which is the biggest mall (and biggest building) in the world.2 In China, the skin care market alone is expected to be worth CNY250 Billion (AUD$50 Billion) by 2022. So, with such diversity and a large growing market, China offers an opportunity for Australian brands to explore. In this paper, we will explore what Chinese consumers are looking for, how to export without the gruelling regulatory process, what social media is best for China as well as some of the latest trends in the beauty industry and how to exploit these opportunities. 1, 6
What are the Chinese consumers’ priorities
When developing products for Chinese consumers, its first imperative that you know what is important to them. In 2018, when asked what matters the most, the top 3 choices: happy family, healthy lifestyles and best education for their children remained the same compared to 2013, however, what was noticeable was that consumers in 2018 had more emphasis on their personal happiness at work, with more consumers wanting to earn money while enjoying the work they do. In fact, the desire to have a successful career was less important in 2018 compared to 2013.1
September 2019
60% 50% 40% 30% 20% 10% 0%
Happy Family
Healthy Life Style
Best
Education For Children
Make More Money
More
Comfortable Living
Job I Enjoy Enough Time Foer My
Personal Life Figure 1: Most important things in Life. Source; Mintel Insights, The Chinese consumer 2018.
Knowing what is important to a Chinese consumer will also let you know how they spend their hard-earned money. It is expected that consumer spending in China will grow at a rate of 8.4% over the next 5 years and reach RMB 57,788 billion approximately AUD $12,971 billion in 2022.17, 9
Growth in consumer spending, particularly in the personal care sector, has decreased in 2018 vs. same period in 2017. Part of reason of this softening is due to the boost of online business squeezing the retail value from offline selling.1,17
It is expected over the next 5 years
more money will be spent on out of home goods and services, such as transportation, holidays, eating out and Spa experiences. Personal and beauty care is estimated to be around RMB 612 Billion, approximately AUD $127 billion.
Social media in China Forget Facebook, Instagram, and LinkedIn, in China, it is all about WeChat! WeChat was launched in 2016 and by 2018 was one of the world’s largest standalone mobile phone apps, based on the number of monthly active users. WeChat can be used
PERSONAL CARE ASIA PACIFIC
Successful Career
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