China’s cosmetics producers want to outsell L’Oreal, Shiseido with quality, market funding and trust from millennials
- Local cosmetics and skincare makers are boosting research, marketing and innovation with funding from capital markets
- Their growth outlook has fuelled prices of stocks such as Yunnan Botanee Bio-Technology and Yatsen, which listed this year
They are being aided by capital infusion from global investors, and are teaming up with local authorities across the country to develop infrastructure and facilities to enhance research, quality and innovation.
Turning the tide is likely to depend on winning the trust and loyalty of millennial consumers like Joanna Zhou, those aged between 25 and 40, who account for more than a quarter of China’s population.
“Domestic firms in recent years have started to pay more attention to branding and enhancing standards,” said Zhou, who helps run her family business in Foshan, Guangdong. “When there are no Chinese brands which are excellent enough, I tend to choose more mature foreign brands to reduce risks. But I’m trying out domestic brands for facial cleansers, facial creams, lipsticks and cosmetic brushes.”
China’s beauty market, comprising colour cosmetics and facial skincare, was the largest in the world at US$38.8 billion in retail sales in 2019, according to Yatsen Holding, citing China Insights Consultancy. Sales are projected to reach almost US$69 billion by 2025, it added.