That is according to a new report from Euromonitor which tracks how the COVID-19 is impacting the FMCG and service industries, including beauty and personal care, in China.
In 2019, China’s beauty and personal care market reached around CNY470 billion in retail value with a CAGR of around 9% over the past five years.
However, the Chinese economy has been one of the worst-hit globally as a result of COVID-19.
The outbreak is expected to have negative impact on certain categories, including colour cosmetics and fragrances in the short term.
The colour cosmetics segment is experiencing a decline, mainly due to more people working from home and avoiding outings altogether.
Although skin care and toiletries sales have experienced some turbulence, Euromonitor believes sales will be quick to recover as the situation improves.
“Although negatively impacted during the epidemic period, basic skin care products and toiletries may only witness a small degree of turbulence throughout the year, as these products see more rigid demand, hence sales could rebound quickly after the quarantine period,” said Connie Zhou, head of research, Shanghai.
On the other hand, products such as disinfecting soap and hand sanitisers have been observed to have experienced a boost in sales, thanks to rising consumer awareness on self-protection and hygiene.
The rise has been so dramatic, local skin care brands such as Inoherb and Chando are capitalising on the opportunity by releasing sanitising products, said Zhou.
In the long term, the report suggests that consumers behaviour and attitudes towards beauty will shift to focus more on health and hygiene.
Zhou dubbed this the ‘healthy beauty’ trend and elaborated that this could manifest in several ways within the beauty and personal care category.
For instances, cosmetic companies can capture consumer attention by focusing on health ingredients, releasing products that promote a healthy lifestyle, and a holistic approach to beauty.
Reinforcing online channels
In addition to this, the boost to e-commerce is likely to remain a more permanent shift beyond the epidemic, said Zhou.
With restrictions on travel and outings, many consumers have become reliant on e-commerce to purchase their goods.
According to Euromonitor data, some brands with colour cosmetics managed to cushion the blow due to a boost of online activity.
E-commerce is already one of the biggest sales channels of beauty and personal care products in China, accounting for 30% of retail sales value for skin care, and 38% for colour cosmetics in 2019.
Brands that have built a strong online presence, such as Perfect Diary, have seen a return of investment during this period.
“Domestic brands with an internet presence tend to benefit from the ongoing contagion, as consumers are more dependent on online purchases,” said Zhou.
The brand has witnessed strong sales growth during the epidemic period, supported by aggressive promotion, uninterrupted delivery and even live-streaming events, said Euromonitor.
Euromonitor believes that the COVID-19 situation will have a lasting impact on e-commerce.
The report elaborated that the pandemic would likely accelerate digital innovation, especially in the luxury space while creating more diverse paths to purchase products such as personal care.
Zhou concluded that as COVID-19 spreads globally, the impact on the aforementioned behaviours and trends will likely be evident in other countries hit by the virus.