China is the world’s second-largest cosmetics consumer and it has a booming market. For those brands looking to sell in China, they need to be aware of the Chinese regulations on imported cosmetics that are now stricter than ever before. This blog post will tell you everything you need to know about the Chinese cosmetics market and how to sell your brand in China while also providing tips for promoting it.
Introduction to China Cosmetics and Beauty Market
When it comes to cosmetics, It’s hard not to think about Asia as a reference for this Industry, and China is one of its biggest players, in terms of consumers and producers. China’s cosmetics market is huge, involving various classifications such as make-up, skincare, hair beauty, and others, with significant growth potential. Now being the second-largest beauty consumer and the fastest growing market throughout Asia, China has become an important target for international brands trying to expand their business. At the moment China is the second-largest skincare market after the US, which accounted for US$18,702 million in 2021. This shows us that China’s e-commerce platforms offer more business opportunities than ever before, and definitely a lot more than traditional stores as it will be much easier for foreign companies to find Chinese customers through this channel.
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The China cosmetic industry has been developing at a rapid pace and this trend does not seem to be slowing down any time soon. There are still some challenges that foreign brands need to overcome when entering China’s territory, such as language barrier, lack of product availability, and high cost. In order to overcome these challenges and promote their products in China, international cosmetics brands need to create an interactive marketing campaign tailored to the needs of their consumers and make the best use of social media.
The beauty industry never falls it just comes up with new ideas, concepts, or transitions in product choices as long as people seek aesthetic changes. It is observed that consumers shift their tastes and brands accompany those changes, making them look always new and on-trend. What makes China attractive for Cosmetics brands?
Besides the advantages of a massive population, there are other forces that contribute to the beauty market growth in the Mainland.
Higher income and consumption per capita
One of the reasons why there has been a growth in consumption has to do with an increase in income. Indeed, according to a study by the National Bureau of Statistics, China’s disposal income per capita has increased by over 6% in the first half of 2018, indicating a stable growth. At the same time the consumption amount per capita reveals a 6.7 % raise in that same year, a powerful sustained force in China, and the more they earn, the more they spend on consumer products.
The data show that for the past decade, the middle class has been growing at a very high rate and it is believed this rhythm will only increase. With more people in the ranks, there’s an increasing demand for luxury beauty products to go along with their newfound wealth.
According to a recent survey by OG&C Consultants, 58% of Chinese people are willing to buy more expensive products in the future. This gives some indication that China may be ready for high-end cosmetics which could give beauty brands a chance at increasing their market share as well now that they have an opportunity with higher prices and increased demand.
Wider consumer range
In the last decade or so, make-up has gained traction in China with many people under 30 less shy of their purchases than previous generations. A high proportion of this age group is partaking and contributing to a booming economy that is encouraging an interest in makeup at earlier ages than their parents.
Studies also show that females aged from 19 to 25 have started to use International premium cosmetic brands when buying make-up products, and this presents an excellent opportunity for foreign and domestic brands. L’Oréal’s President at a Bloomberg interview had some interesting thoughts about Millennials. For example, the ones who were born in the ’90s have an eye for quality products no matter what they cost and will buy international brands names such as Giorgio Armani. Indeed, if the product is valuable enough, then the price is a second thought.
The upcoming cosmetics trends in China
The Skincare Segment is ahead of the curve
Chinese women have long attached high value to their skin and are usually quite fashion-conscious. They are known for meticulously applying skincare products before starting the day or going out, “explaining” in part, how skincare has become the fastest-growing segment of the Chinese cosmetic industry.
Skincare is a hot topic in China, and it’s for good reason. Chinese celebrities are ditching the heavy makeup look that was so popular just a few years ago – instead opting to go with “glass skin” inspired by Korean beauty trends. These stars even share their own skincare routines on live streams which attract tons of followers.
As told earlier, Chinese skincare product consumers are shifting from price-focused purchases to quality and brand-oriented. Although, you should note that the Chinese market is huge and segmented so there absolutely is also a market for more affordable products.
The make-up segment in China is far from saturated
Even though the skincare segment is gaining a lot of traction it doesn’t mean make-up products are lagging behind, it’s actually the opposite, it’s growing every year, particularly for enhancement items, such as color correcting (CC) and blemish balm (BB) cream.
There is however an interesting trend, where people are looking for skincare functions in make-up products, such as lipsticks with vitamin C, which also represent the increasing awareness of the consumers regarding the quality of what they put on their skin (and even more so if the product claims health benefits – beware, products like this still require animal testing to be sold in China, as well as a specific license). More than looking pretty they want to be reassured that their bodies are taken care of.
China has recorded an increase in sales of eye make-up products in recent years, specifically during the COVID-19 pandemic. The make-up segment also so the popularization of limited collections and series – it’s not rare to see people’s line up for a chance at getting their hands on a brand collaboration for instance.
“Limited collections are becoming popular because shoppers want something that’s unique,” says Craig Johnson from NPD Group. “You’ll see it across categories: apparel retailers focus on new product introductions; food manufacturers introduce new flavors or package sizes.”
This trend can be seen with eye makeup as well where brands release their own collection every season which creates instantaneously popularity among consumers who must rush out to get them before supplies run out.
Male beauty trend on a rise in China
Cosmetics are no longer exclusive to women. Indeed, there is a global growing trend in men being more conscious about how they look and want to enhance their features through beauty products, as well as to improve their skin health. China’s male beauty market could reach over one billion yuan in 2021 as men become more open-minded and no longer have a problem with make-up, which is traditionally associated with feminity.
According to statistics from Euromonitor International, the overall Chinese skincare market increased by 7.8% (£90bn) in 2017. The growth of facial skincare specifically has been especially prominent, with sales increasing by 12.6% (£13m). Among these face care products for men, many are marketed exclusively to them – such as skin whitening lotions or eyebrow shaping kits, which show the biggest increase among beauty products.
As the male gender stands for more than half of the Mainland population, there is a big opportunity for brands to establish themselves as key players in the Chinese market, with huge growth opportunities.
China’s Growing demand for Cosmeceuticals
Cosmeceuticals are a subset of the cosmetics industry, but with more active and natural ingredients intended to act on the skin. In China, the definition of cosmeceuticals is broadened and may include remedies for hair loss or dandruff. Cosmeceuticals, especially Chinese herbal cosmetics, are opening up a new territory in the cosmetics market.
Young consumers are the main purchasing force in the market, they are more aware of the concerns of poor quality products. Consumption of cosmeceuticals tends to start at increasingly early ages. Fact that companies should be aware of when formulating their cosmetic line.
China Baby skin care products craze
There is a niche that has been benefiting from the rise of wages and the growing middle-class, and that is the baby skincare products which are having significant growth. I know what you are all thinking: How come such a segment can be growing while the population of babies and infants is declining in China? Well, as simple as it may sounds, new mothers in China tends to spend more on their offspring’s skincare and personal care. More info on China’s baby skincare market here.
What other cosmetics trends are surging in China?
Consumers are not satisfied with the limited functions of products. Nowadays, and particularly with the influence of social networks, consumers have to regularly deal with new developments in the beauty market. They can constantly discover products that are always more functional and with the best virtues. This is the reason why they are more willing to buy different function beauty items, such as a cleanser, lotion, essence, mask, and so forth to strengthen their skincare actions. Also, a surge of beauty gadgets in the market is drawing lots of consumer interest, such as facial massage tools, cleansing brushes, and more.
The cosmetic market still has a lot to grow and expand into different areas, including developing new products, adapting to global standards, and meeting the needs of different consumers. This is why cosmetic companies are investing a lot in research and development.
In terms of innovation, Chinese women are becoming more aware that beauty has become a lifestyle, and that skincare is not just about maintaining their appearance, but also to lead a healthy life. For example, many female consumers will purchase food like white fungus or seaweed soup for good skin. There is definitely an opportunity today to put new ideas into practice with new technology and applications.
What are the main challenges for foreign Beauty brand entering the Chinese market?
A growing preference for domestic cosmetics brands
Domestic brands on average cost less than international brands, and Chinese consumers believe they are better valued for money. According to a new report from business intelligence provider Euromonitor International, china’s domestic brands occupy nearly 61% of the overall cosmetics market. This is well above international brands’ penetration rate of 39% and has helped local companies post an average growth rate of 12% over the last five years – compared with 6.5% for international players. the reasons are:
- cheaper (which for a good chunk of the market is still important, remember, only bigs cities are super wealthy)
- Rise in trust for domestic brands (and nationalism)
- Domestics brands master the market and culture – they know how to use the digital landscape to make the best out of it.
Consumers perceive domestic brands as more affordable since they cost roughly half the price of imported products, which is still a relevant point since not all Chinese people can afford to buy a foreign brand. Local companies have increased their marketing in recent years, which means they are better known by consumers than ever before. However, the public might have some reservations about whether these domestically produced cosmetics meet their standards of quality.
China: A fierce battlefield for new-comers in the beauty market
Though the cosmetics market is far from saturated, and there is still an obvious huge potential to grow still, China’s beauty industry is a highly competitive market with many brand segments in different sections. There’s a rise in local brands who own a reputable image in China, emphasize natural and herbal cosmetics (the Herborist), and have also high coverage of lower to middle-tier cities, that end up with more market penetration than international brands. Consumers in first-tier cities tend to buy international premium brands like L’Oreal, Estee Lauder, and Yves Saint Laurent, which are also very well established brands Internationally. Most of the foreign market shares are occupied by these brands, and the more exposure these brands have on digital channels, the more consumers they have. The rise of a niche market is certainly an opportunity for the newcomer.
The rise of local competitors: the case of the Perfect Diary and Florasis
The cosmetics industry is booming in China and it has not only been limited to the Chinese market. With its successes, several new brands have popped up with their eyes set on expanding overseas into Japan and the West!
The Chinese cosmetics market leader, Florasis and Perfect Diary are making a name for themselves.
According to research from the Chinese Academy of Social Sciences’ Institute of Marketing and Management Studies published in June 2018 perfect Diary took first place on both online sales during this year’s “618” shopping event as well as offline retail stores with their competitive prices and attractive product selections. The company has raised fresh funds since then which have helped them grow into a booming 4 billion dollar industry giant!
The newest competitor is Florasis, the current 2021° #1 brand of cosmetics in China, which was launched by Zhejiang Yige Enterprise Management Group. Both brands were released at around the same time, and while Perfect Diary went on to become a big talking point due to its innovative design and features that innovated throughout 2019 (with new offerings such as an app for children’s sleep cycles or personalized milk powder made from Hong Kong cow’s milk), Florasis with a more “Chinese classical” design is absolutely killing it on Chinese eCommerce platform.
The famed social media star Austin Li has been a huge asset to Florasis. Not only did they employ him for a lipstick promotion in September 2020, but they’ve also had Austin introduce Florasis products up to 45 times on live stream commerce between January and July 2021. 40% of sales in their flagship store are attributed to the Kol.
Loyalty and novelty craze in the Chinese Beauty Market
The cosmetics consumers, that are changing from generation X to the after 90’s, have a totally different psychological purchasing behavior. Studies show that this younger generation tends not to be as loyal to brands as the previous generation.
They base their choice on different standards, especially on how appealing the KOLs promotion is, depending much more heavily on their opinions.
High-end niche brands sometimes take advantage of that, making people feel differentiated from others, and also making them feel like they need to have that new product. Therefore unique product design, as well as a personalized connection, are crucial components for success.
China and Animal Testing
Animal trials were a deeply controversial issue for a lot of international cosmetic brands trying to break into China’s market since the regulation made it mandatory for any imported cosmetics products to be tested on animals.
Since 2019 they have been reverting these measures, and on May 1st, 2021 it became no longer mandatory to test the majority of cosmetics on animals, which will definitely have a big impact on foreign brands that can now enter this market, like vegan and cruelty-free.
You can read more about it here.
How can foreign beauty brands overcome china’s cosmetics market challenges?
It may sound obvious but this is a really important step, It’s very hard for a company to sell their products with no brand awareness. So, in order to increase your brand awareness, you have to be at the top of the list, making an effort in advertising not just your products but what your brand stands for, what differentiates it from the other ones.
Other local brands will also probably be cheaper because there is no way for a foreign brand to compete with Chinese seller’s prices, so you absolutely need to show what makes the price difference and make that explanation through different channels and targeting the public.
Chinese sellers are already working on changing the mindset of a lot of consumers, making them believe that “Made in China” is not bad and could even be better.
Baidu is an example of a tool that is extremely important to understand. With an 80% market share in the Chinese search engine market, it’s the dominant search engine in Mainland. It handles about 6 billion search/queries per day on average and has over 60 million viewers per day as well.
As Baidu has covered 95% of netizens in China to increase brand visibility and attract more traffic, it is the way to go whether to run paid ads or optimize organic searching results. However, operating Baidu is not the same as Google, below are some suggestions on how to set it up.
Step 1: Get your Cosmetics brand a Chinese website and work on Baidu SEO
Since Baidu is a Chinese search engine that is meant for people using the Chinese language, it requires having a Chinese website, or else people who search in Chinese keywords won’t find your website.
- A good loading speed
Consumers treasure their time when browsing through websites. If the loading speed is too slow it might affect the consumers’ attitude toward your brand making them see your brand as small or low-quality. If this happens they may turn to your competitors, so it’s important to have this in mind.
- Create Baidu ads account
In order to have a PPC account on Baidu to run ads, a Baidu ads account is needed. It’s not as convenient as Google, so there are a lot of documents and certificates that are required to be submitted due to central authority requirements.
- Be aware of some expressions
China is a specific market and due to its censorship, some expressions/words cannot be included, so be aware of some sensitive words related to China policy or regulation.
Work on press releases and e-reputation
Branding is king in China, so there is an absolute need to build a good brand image and a reputation. doing so will draw a great number of customers. This means knowing how to express your brand in an online environment, since cosmetics lovers always search for the latest trendy information online, especially posts or publications on websites. Focusing on upgrading the content will be a useful method to employ.
For many, they may feel like the Super Apps and Platforms are everything when doing business in China but Press Releases also play a vital role. They help back up your credibility; which is an important thing to have before even entering into any deals with Chinese companies. It’s not just that PR is a long-lasting solution for increasing your conversion rate and getting more traffic. It also happens to be cheaper than most solutions! For example, our packages start at 3000RMB.
Here are a few points to make it easier when writing one:
1. Press releases are a great way to promote your business
2. A press release can be used in conjunction with social media marketing
3. It’s important to include keywords and phrases that will make it easier for people to find you through search engines
4. Include links back to your website, blog, or social media pages so interested readers can learn more about you and contact you if they’re interested in your product or service
5. Be sure the information is accurate and current – this includes the date of publication on the press release as well as any other pertinent details such as company name, phone number, email address
6. Make sure any quotes from customers or clients are real and accurate
Influencer marketing campaigns – Work with Chinese Kols
Nowadays, no marketing strategy in China is complete without KOLs collaboration. Unlike those A-list celebrities, KOL or micro-influencer engage consumers in a deeper way and help to build brand reputation and awareness, more than trying to sell products right away. It is suggested to start working with Kols later in the branding process as your brand awareness grows.
The advantage of Kols compare to celebrities is that they are more relatable and create a feeling of proximity with their followers who tends to trust them a lot more than official sources. What they do is create word-of-mouth scenarios on social media and thus generate a buzz, making people want to try that product.
Now, there are challenges to working with Kols, below are some questions you should ask yourself before getting started:
- How do you know who is legit and who’s not?
- Is this Kols reliable or will it ghosts me just before a campaign that I have been prepring for months?
- How can you find Kols that fits your brands?
- How do you negotiate prices with Kols?
Social media platforms are unique in China
The internet in China is a vast and multifaceted place, where western social media platforms are non-existent. From messaging app WeChat to microblogging site Weibo, or video sharing platform Douyin (aka Tiktok) – there’s plenty of ways for brands to participate online. All these social media have their own features and tools that can and should absolutely be taken advantage of by non-Chinese beauty and cosmetics brands.
In the same vein, China also has its own set of forums and Q&A platforms which are rather popular among the internet population when it comes to debating a topic, educating oneself, or making a purchase decision.
Let’s now have a look into these apps and their particularity and what makes them great resources to promote foreign beauty brands in China.
WeChat: the Base of Chinese Social Media
WeChat is the biggest messaging app in China, similar to WhatsApp, and It has 900 million users as of 2021. But Wechat is more than just a messaging app though, it’s features include social networking, mobile payment, microblogging, shopping, live-streaming, and so on. The WeChat team keeps adding more features to keep users (and brands) engaged.
WeChat relies on its user-friendly interface as a way to make chatting with family and friends a smooth experience. This has led many people who use it in their everyday lives not only for socializing but also for other purposes such as banking and shopping.
As a matter of fact, WeChat is not the ultimate social media for marketing due to its closed nature, however, the app is so mainstream, that not having an official account would hurt your brand legitimacy in China. If Wechat is not the perfect marketing tool, it still has many great features that can be used to nurture and communicate with your target audiences such as Wechat posts, mini-program, WeChat shops, or even live-stream.
Growing an engaged follower base can be done through different ways:
- Engaging content through official channel pots
- Groups sharing
- Wecchat Channels
- Wechat Ads
Weibo: The “Buzz” Marketing app
With over 45 Million MAU users as of 2021, Weibo (launched in 2009) is one of the biggest social media in China but also considered one of the most influential as many debates take place on the app. Because of its open nature and its hashtag system (similar to Twitter), post on Weibo can spread like wildfire on the Chinese Internet.
Weibo users are engaged and varied making it a very interesting app for most companies wanted to get visibility in China but especially for lifestyle brands as shown by the prevalence of beauty and fashion influencers on the app (16% as of 2021).
Even for Weibo, advertising has a much more efficient level of results, compared to other platforms, since its database of users is extremely well-organized and fine-segmented, driving traffic efficiently to your official account or website.
In addition, the priority of Weibo is that its users are actually people who share similar consumption patterns. You can easily find out their interests and personal preferences, which helps you to enrich your marketing strategy on this platform, leading to a higher success rate for any campaign.
Weibo also has a live streaming and eCommerce feature that are extremely valuable for any FMCG brand doing business in China.
Little Red Book (Xiaohongshu): China Lifestyle Social Ecommerce App
You may not have heard about it before, but it’s also one of the most important social media platforms for beauty brands in China. It can be compared to Instagram, but with a mix of Pinterest and with the benefit of having an online store incorporated and one of the most more powerful ways to sell cosmetics in the online market.
With its 100 million MAU (as of 2021), Xiaohongshu is a content platform dedicated to Chinese consumers. The core function of the app is products and services reviews known as shopping notes making it an eldorado for Kols.
Users’ shopping notes are mostly about fashion, cosmetics, high-end lifestyles, and travel. They are mostly authentic opinions of users and KOLs regarding their experiences with certain products, hotels, restaurants, among others, so it can generate real word-of-mouth among young people in China.
Xiaohongshu has many popular KOLs from all kinds of industries including celebrities, models, and Internet stars. It was established four years ago and the reason why it developed so fast is the authenticity and quality of the content.
Why It’s recommended to invest in RED if you are promoting cosmetics products in China?
- Approximatively 80% of users are female
- 56% of users (2021) live in 1st & 2nd tiers cities
- 72% of users are Millenials – the current biggest consumers range in China
- RED shopping notes rank on Baidu
But with Red you can also open a RED store and have a brand official account, a poster can add hyperlinks to their post directly sending other users to your online store (on the app or elsewhere), the app has a live streaming feature as well as short video sharing. As an official account, you’ll also have access to an in-depth analytics dashboard.
Marketers will have access to promo tools such as wow card and lucky draw and paid advertising. all in all, a pretty well-rounded app for brands communication.
Douyin: Short Video Sharing
Douyin (Known as TikTok in the west), a social media that grew a lot in the last few years both globally and in China. This app has the same functionality as her sister app and its focus is for people to create short clip videos and to share them with other users. Right now Douyin has more than 513 million monthly active users (June 2020). The ratio of male to female users is quite even with 52% of users in 2021 being women against 48% men.
Right now Douyin has two different kinds of features, one is the “Live” function where you can stream live videos to your followers and other users as well, the second feature is the main part of it, which is posting short clips on what you are currently doing or thinking about.
It is a good time to enter the app as not many brands have joined it yet. In 2020, only 4% of users’ accounts were branded’ official accounts. Brands should invest in being active in this platform because it will have a great impact on the publicity of their products and get the attention they are looking for, creating a lot of awareness. Another reason why brands should invest in this platform is that it has two different ways to communicate with your followers: reposting clips that people put up and commenting on them, creating engagement.
Furthermore, Douyin has been working on its own Flagship store, and we hope to see more of it in the coming future.
Invest in Chinese E-commerce
The most adaptable choice for building an e-commerce store is putting it on an online marketplace such as JD or T-mall. These are the main go-to e-shopping when Chinese consumers want to buy international beauty brands and want to make sure they’re genuine.
After years of development, JD has not only become one of China’s largest e-commerce platforms but is also increasingly well received by foreign brands. Through its unique characteristics, JD is becoming a global commerce trendsetter and brand influencer. By the end of January 2017, JD had an average daily order number of 7 million items and a total transaction volume of about 220 billion yuan in 2016. It was ranked in Fortune magazine as one of the ten most influential companies in the world in 2014; it was also awarded the honor of “China Corporate Eco-brand” for five consecutive years, ranking 10th on Interbrands’ list of Top 100 Global Brands.
T-mall is the representative e-commerce platform of China. All the brands tend to use T-mall as their official online stores: Apple, Armani, Kate Spade, etc. If you wish to access more and more Chinese consumers directly, setting up an account on T-mall would be a wise choice.
Setting up an inland official store may be complicated, there are many documents that need to be submitted and a lot of testing before a store opening. So the majority of international brands may choose cross-border e-commerce which is still selling to people in China, but will also have an international presence, this is a solution to shorten the process as well as lowering the costs.
Besides these e-commerce stores, that are specifically made for selling products, the new trend of selling cosmetics on social media is rising as we have seen with more and more social media launching their own eCommerce app and investing heavily in live-streaming.
Contact us if you want to sell your cosmetic products in China
It can be very difficult to enter the Chinese market as regulations and habits are not the same in China. However, even if it might seem unreachable, you can expand your activities in China with the help of experts. You need to seize the opportunity to conquer the most promising market in the world in terms of cosmetics. To do so, you will need to do a lot of research beforehand as well as be prepared to complete long procedures to sell your goods on e-commerce platforms, and that is why specialists can be quite useful.