The study, ‘Beauty and Personal Care in China,’ reveals that more consumers are trading up to premium cosmetic products due to rising disposable incomes.
Despite the country’s recent economic troubles, real economic growth was still 8% last year, with around 7.5% predicted for 2013.
This influx of cash is leading to many consumers trading up on their former products.
The study also concluded that international players are continuing to dominate the premium market and squeeze out local companies, with Chinese consumers continuing to be indifferent to the offerings of native firms.
Growing competition
The rising domestic cosmetics industry is leading to increasing pressure on companies to distinguish themselves from the crowd.
On the whole, multinational players continued to lead the way in China, with only one of the top ten cosmetics companies being locally based. International players were able to utilize their strengths in branding, product development and funding in order to maintain their advantage.
According to a white paper published by the market research company Labbrand, ‘High-end cosmetics trends in China,’ consumers have little loyalty to brands and local companies, and frequently try several in order to compare them.
L’Oreal and Procter & Gamble continued to be key players, with the former making effective gains in market share and threatening to challenge the latter’s market leadership.
Cosmetics continue to grow despite economic uncertainty
Data from the Euromonitor study shows that China’s cosmetics market is still making rapid gains despite the region’s relative decline in growth and economic uncertainty.
Increased spending on cosmetics is being fuelled by “improved living standards and rising consciousness of personal grooming,” with the industry posting an estimated CAGR of 11% during the review period.
The Labbrand paper shows that beauty in China is believed to be a balance between mental and physical traits, and is considered a key component in a “happy” life. Men’s grooming is also a growing trend.
Charles, a 28-year-old man quoted in the study, said: “the trend (in cosmetics products consumption) is going to be stronger and stronger, because people want to be beautiful, they want to be trendy and make-up and skin cares are part of the fashion, they are part of your life.”