China cosmetics sales rebound in March as coronavirus outbreak proves to be a temporary setback
- Sales of face packs and make-up removers on Pinduoduo rise more than fivefold in March compared to February
- Sales of cosmetics improved in March from the 60-80 per cent plunge in February as consumption fell because of the lockdown, said Jefferies analyst Anne Ling
Sales of cosmetics are recovering rapidly in China as people return to work and retailers focus on online marketing after authorities on the mainland ease lockdown measures imposed to control the coronavirus outbreak.
Anne Ling, analyst at investment bank Jefferies, said in a report on Monday that cosmetics sales in March fared better with around 20 per cent decline compared to all other retail categories in China. She added that it was a good improvement compared to the 60 and 80 per cent decline in February when socialising was limited, reducing demand for cosmetics.
In some instances, sales of some companies like Lin Qingxuan climbed by 120 per cent year on year in February after plunging by more than 90 per cent during the Lunar New Year holiday, which is traditionally the peak season for sales.
Sun Laichun, founder of the Shanghai-based skincare and cosmetics brand with more than 300 shops across China, said recently that he was staring at bankruptcy after sales took a dive in January. With sales at bricks-and-mortar stores drying up by nearly 90 per cent, he turned to selling products online, promoting them on live streaming platforms and social media.
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Sun said he sold 400,000 bottles of the company’s flagship camellia oil within two hours on Valentine’s Day. Between March 1 and March 8 during the International Women’s Day shopping period, Lin Qingxuan said its online sales jumped more than fivefold.
Sales of face packs and make-up removers on China’s e-commerce platform Pinduoduo surged more than five times in March compared to February, according to the company.
“Sales of colour cosmetics, such as lipsticks, eye shadow, eyebrow pencils also recorded decent growth,” Pinduoduo said in reply to an inquiry by the Post. “But the transaction amount seems to be controlled [at a relatively lower level],” it said, noting that sales of mid-range priced products had risen compared to a year ago.
According to Shanghai-based e-commerce data provider ECdataway, sales of cosmetics and skincare products on China’s e-commerce giant T-mall rose 89.5 per cent during the International Women’s Day promotion period in the first week of March, topping all other categories. Sales of household products came in second, rising 56 per cent, followed by 46 per cent gain in food and health care products, boosted by demand for essentials amid the prolonged lockdown.
In the first two months of the year, cosmetics sales declined 14.1 per cent to 38.7 billion yuan (US$5.4 billion) compared to the 20.5 per cent drop in overall retail sales, according to data from the National Bureau of Statistics.
Chen Ke, analyst with consultancy Roland Berger, said that the impact of Covid-19 on cosmetics sales would be short-lived. He added that sales would grow as China’s per capita cosmetics consumption of US$30 in 2019 was far less than US$202 in Japan and US$120 in the US.
China’s beauty and personal care market reached around 470 billion yuan in 2019, growing at 9 per cent compound rate over the past five years, according to Euromonitor International.
Separately, searches for cosmetics and personal care in China bottomed out on around January 30, and rebounded to the level before the outbreak of Covid-19 on February 10, according to Industry Research Institute under China Fortune Land Development, citing data from search engine Baidu.com.
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