FACE VALUE: INVESTORS RUSH INTO CHINA MEN’S SKINCARE BOOM
China’s radiant male skincare market has a fresh shine: Domestic startups are tapping global investors for funds, with ambitions to rival giants like L’Oreal in a billion-dollar business serving image-conscious millennial men like Hou Junru.
The 24-year-old Shanghai education worker got into skincare as a student and splurged more than US$1,000 on creams and lotions during the Nov 11 Singles Day online shopping promotion held by Alibaba. “My need is to keep the skin moist and look pale,” said Hou.
It’s a priority shared by many of his peers, influenced by the spread of social media and South Korean pop culture that embraces a softer version of masculinity.
Already the biggest in the world, the Chinese men’s facial skincare market was estimated to be worth 12.5 billion yuan (US$1.9 billion) in 2020. The research firm Mintel has forecast growth of 50% to 18.5 billion yuan by 2025.
Drawing on the huge reach of online retailers like Alibaba and JD.com, at least 10 new Chinese male skincare brands have been set up this year.
“A great number of small brands are emerging through online channels,” Mintel said in a recent report. The “online shopping experience enables men to choose what they want quickly. … Online retailers can make it easier for men to seek out information and tips than in offline stores.”
For now, the skincare market in China is still dominated by three big foreign players — L’Oreal of France, the Nivea maker Beiersdorf of Germany, and Japan-based Rohto, home of the OXY brand. Together they account for 60% of all sales, according to Mintel.
But there is still a large and fragmented segment waiting to be targeted by startups, hoping to emulate the success of Perfect Diary, a red-hot Chinese women’s cosmetics brand whose parent raised $617 million in a Nasdaq listing in November.
Among the new breed of male skincare firms is Coen, founded in September by Huang Kai, a Xiamen-based entrepreneur who closed his previous men’s apparel business to focus on the beauty beat, with goods manufactured by firms in Guangzhou.
Huang, 31, said sales at Coen — a name that translates to “scientific and grateful” — topped 1 million yuan in two months via e-commerce marketplaces. A 120-millilitre bottle of its flagship cleanser, Dragon Blood, retails for 64.90 yuan ($9.90) on Tmall.
With products like a beard depilatory cream in the pipeline, Huang is in talks to raise funds from investors for what he described as a huge opportunity to tap new generations more open to skincare. “There are more than 200 million men born (in China) after 1995,” he notes.
A half-dozen startups in the segment raised a combined 300 million yuan in 2020, Huang said.
Bertelsmann Asia Investments has invested in the Shanghai-based men’s skincare company Just a Cool Brand (JACB), set up this year. The fund believes the growth momentum in China’s cosmetics market will continue, according to vice-president Cindy Zhu.
“JACB will provide more professional products that may appropriately meet the skincare requirements of Chinese men consumers,” she said.
According to the startup research database CB Insights, Redpoint Ventures and SIG Asia have invested in Make Essense, based in Shenzhen.
One major hurdle for the new breed of Chinese suppliers will be persuading customers who have used well-known foreign brands to switch.
Education worker Hou, for instance, still prefers brands such as Guerlain and La Mer from France. “These products are used on your face so I don’t want to try brands I haven’t heard of,” he said.
But others remain open to the possibility. University student Liu Yuxuan, 22, typically uses Clinique and Estee Lauder but would consider domestic brands that offer value for money. “Chinese brands are more down-to-earth,” he said.
One possibility for domestic brands could be to expand into colour cosmetics like eye shadow — still a niche but growing segment.
“Most men’s products are boring,” said Hou.
“Why won’t brands give us men more innovative products? Like women I also need skincare to maintain moisture and look white. I will buy if they are good.”