Beauty sells

Skin­care, makeup sec­tors see dou­ble-digit growth

China Daily (USA) - - FRONT PAGE - ByWANG ZHUOQIONG wangzhuo­qiong@ chi­nadaily.com.cn

China’s skin­care and makeup sec­tors registered strong growth of 12 and 10 per­cent re­spec­tively last year with South Korean and Ja­panese brands mak­ing up the lion’s share of the in­crease, ac­cord­ing to an in­dus­try re­port.

The ra­tio is higher than the over­all growth of 3.1 per­cent in the fast mov­ing con­sumer goods sec­tor, ac­cord­ing to lat­est fig­ures pub­lished by Kan­tarWorld­panel, in­di­cat­ing that the cos­met­ics sec­tor re­mains an im­por­tant growth en­gine of China’s FMCG mar­ket.

“Chi­nese con­sumers are be­com­ing more so­phis­ti­cated, and are opt­ing to buy more pre­mium prod­ucts which are fu­el­ing the value growth of these sec­tors. This presents brand-new op­por­tu­ni­ties for both in­ter­na­tional and do­mes­tic play­ers,” said Ja­son Yu, gen­eral man­ager of Kan­tar World­panel China.

Dabao, a brand ac­quired by John­son & John­son, leads Kan­tar’s 2016 Cos­metic Brand Foot­print rank­ing, which mea­sures which brands are be­ing bought most of­ten by the most con­sumers.

Daobao prod­ucts were cho­sen by 23.1 per­cent of the pop­u­la­tion, on av­er­age twice a year.

Pe­choin oc­cu­pies sec­ond place and was the fastest riser in terms of con­sumer touch points, adding more than 3.6 mil­lion fam­i­lies to its brand over the last 12 months.

in Bei­jing.

The dou­ble-digit growth of the cos­metic sec­tor was mostly driven by trad­ing up, which ac­counted for 82 per­cent of mar­ket growth, said the re­port.

De­spite strong growth in the cos­met­ics mar­ket, the com­pet­i­tive land­scape in China also went through rapid trans­for­ma­tion, the re­port said.

Among all the 4,000 brands tracked by Kan­tar World­panel, only 40 per­cent of them saw an in­crease in net sales.

Among the top 20 growing brands in the mar­ket, a rise in pen­e­tra­tion ac­counted for 78 per­cent of their col­lec­tive growth, prov­ing that the con­tin­ual re­cruit­ment of shop­pers is the key way to grow sales.

Aside from Pe­choin, Hans, In­n­is­free, Dr. Morita and Shi­seido also man­aged to grow their con­sumer reach faster than the other play­ers.

South Korean Amorepa­cific Group Inc, which owns brands in­clud­ing In­n­is­free, had its rev­enue in China grown from 464 bil­lion South Korean won ($0.42 bil­lion) in 2014 to 765 bil­lion South Korean won in 2015, ac­cord­ing to its an­nual fi­nan­cial re­port for the year ended Dec 31, 2015.

Yu said: “Con­sumers to­day have un­prece­dented choices avail­able to them thanks to over­seas travel and e-com­merce, yet the growth of Chi­nese brands and South Korean/Ja­panese brands is no­tice­able.

“While con­sumers are more ready to trade up, those brands which ad­vo­cate health, ef­fi­cacy and fun are win­ning con­sumers’ choices, on the back of unique prod­uct and mar­ket­ing in­no­va­tion as well as smart Omni-Chan­nel de­ploy­ment. ”

The re­port also found out that con­sumers are embracing nat­u­ral and safe prod­uct con­cepts. Suc­cess­ful brands dif­fer­en­ti­ate them­selves by ad­vo­cat­ing new­con­cepts, ben­e­fits and us­age oc­ca­sions, as well as pure and nat­u­ral in­gre­di­ents.

PRO­VIDED TO CHINA DAILY

The stand of Bei­jng Dabao Cos­met­ics Co Ltd at an in­dus­try expo

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