China’s skincare market to continue steady growth as users become more sophisticated
A survey finds that customers are switching to premium products, putting the onus on makers to stay ahead of the trends
China’s US$22 billion skincare market will continue to grow as women gain sophistication and switch towards more premium brands, with low per capita spending on products also providing ample room for brands to grow their businesses, according to a report released this week.
The survey by OC&C Strategy Consultants found that in the past year 58 per cent of respondents had switched to more expensive product lines within the brands they were already using, and 36 per cent changed to more premium brands, meaning over 90 per cent increased their spending on skincare over the past year.
“China’s skincare market will continue to grow at a steady pace, fuelled by the rising middle class and its increasing disposable income and sophistication. As such, this market will remain a magnet for the most ambitious international brands for years to come,” said Pascal Martin, a partner at OC&C, in the report.
The survey of 2,800 female skincare product users from 20 cities across China found that women were adding more steps to their daily skincare routines – up to as many as nine – and conducted extensive research on products, putting the onus on makers to adopt very customer-centric marketing strategies and to keep products relevant.
Other analysts noted that a rise in purchasing power has paved the way for more international brands to enter the Chinese market.
“It is not because brands are having higher price points, but more that there are more consumers buying higher price point brands which reflects the demands and aspirations of the market,” said Jacques Penhirin, partner and head of Greater China at management consultants Oliver Wyman. “More international and premium brands are available as they have started to open more stand-alone stores.”
Increased overseas travel and the influence of television and a celebrity culture through social media are also having an impact on the Chinese market.
“A wider cultural influence plays a role, with South Korean brands gaining popularity in the last two years due to the popularity of South Korean TV dramas”, said Alice Tsang, senior economist at the Hong Kong Trade Development Council.
The increasing competition raises the need for all makers to make sure they target their products correctly, use the right mix of sales channels and engage with people who can influence customer behaviour, the survey said.