In this 2020 round-up, we’re featuring the biggest cosmetic stories on China, featuring the hottest trends, the biggest regulations developments and more.
In this 2020 round-up, we’re featuring the biggest cosmetic stories on China, featuring the hottest trends, the biggest regulations developments and more.
Chinese consumers were expected to shift their attitudes towards beauty products that promote health on the label following the novel coronavirus (COVID-19) outbreak.
That was according to a March 2020 report from Euromonitor which tracked how COVID-19 was 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, Chinese economy has been one of the worst-hit globally as a result of COVID-19.
A March report by Kantar Worldpanel predicted that China’s hair care category would bounce back the fastest compared to skin care and colour cosmetics in the aftermath of the novel coronavirus (COVID-19) epidemic.
At the time of publishing, the hair care category was experiencing sluggish demand due to the major disruptions the epidemic has caused to daily life.
For instance, more people were opting to work from home and avoiding crowded places. In some cases, there have been mass quarantines.
These factors have causes Chinese consumers to decrease their frequency of hair washing.
In March, Chinese E-commerce giant, JD.com along with its big data research institute, revealed the five major trends driving the domestic cosmetics markets in its latest report.
It came as the market in China grew at around 11%, far outstripping the global increase of 4%.
The firm’s beauty report outlined several trends, including the fast-growing popularity of facial essences, the domination of K-beauty brands and the growing us of cosmeceuticals among consumers.
Additionally, it also highlighted that online channels were growing faster than offline channels and consumers in Shanghai spent the most on cosmetics.
In April, French cosmetics company L’Oréal reported that its sales in China had seen progressive signs of recovery since the country was hit by the novel coronavirus (COVID-19) outbreak, potentially signalling that the cosmetics market was headed for a quick recovery post-pandemic.
L’Oréal was able to rebound quickly to achieve growth in China in March, leading to a positive first quarter for the company.
Chairman and CEO of L'Oréal Group, Jean-Paul Agon highlighted that the company’s performance in China was “remarkable”.
“China was able to close the quarter at plus 6% which is pretty amazing when you think about the difficulty that they had due to the pandemic.”
In January 3, the China State Council has finally passed the highly anticipated Cosmetic Supervision and Administration Regulation (CSAR).
The regulation was passed during an executive meeting of the state council hosted by Premier Li Keqiang.
In a statement released the State Council, CSAR was passed "to better ensure quality and safety and promote industrial development” in the cosmetics industry.
CSAR will replace the outdated Cosmetics Hygiene Supervision Regulations (CHSR) which was implemented in 1990 and has been a major hurdle to progress and innovation in the industry.
Analysts believe China’s premium fragrance market will continue to see strong growth underpinned by the luxury positioning of fragrances and its e-commerce availability.
According to Euromonitor International, the premium or fine fragrance market in China has seen dynamic growth in the last decade.
Stephanie Yao, Senior Research Analyst at Euromonitor International, highlighted that the demand for fragrances, which as seen as high-end products, are being driven by the increasing sophisticated tastes of Chinese consumers.
“With the growing consumer sophistication, consumers’ attention is likely to shift from skin care, to colour cosmetics, and then to fragrances,” she said.
Analysts believe China’s premium fragrance market will continue to see strong growth underpinned by the luxury positioning of fragrances and its e-commerce availability.
According to Euromonitor International, the premium or fine fragrance market in China has seen dynamic growth in the last decade.
Stephanie Yao, Senior Research Analyst at Euromonitor International, highlighted that the demand for fragrances, which as seen as high-end products, are being driven by the increasing sophisticated tastes of Chinese consumers.
“With the growing consumer sophistication, consumers’ attention is likely to shift from skin care, to colour cosmetics, and then to fragrances,” she said.
In May, Aussie hair care band Hair Folli was gearing up to launch its products in China as the market began to recover from the novel coronavirus (COVID-19) outbreak.
Based in Australia, the company was founded by Trung Vien, an entrepreneur with a finance background that also owns businesses in food and beverage, fitness and property sectors.
It manufactures Hair Folli, a hair growth product which contains native Kakadu plum, a ‘superfood’ ingredient that contains potent amounts of vitamin C and antioxidants.
In addition to Kakadu plum, the spray-type product also contains other botanicals such licorice root and panax ginseng root extract to stimulate hair growth by improving blood flow to the hair follicles.
In March, health and beauty retailer A.S. Watson has observed a strong recovery in China after over a month of store closures due to the novel coronavirus (COVID-19) outbreak.
Last year, the Hong Kong-based company and subsidiary of C.K. Hutchinson, increased its Watsons store numbers in China by 9%, bringing up the total number of outlets to 3,947 in 483 cities.
When the COVID-19 outbreak started in January, the company saw its business quickly affected as cities came to a standstill.
At its peak, some 2,500 stores, which make up 64% of its total force, remained closed for over a month. Store traffic dropped about 90% which led to sales plummeting by 80%.
In August, French cosmetics conglomerate the L’Oréal Group outperformed the market in China thanks to the strength of e-commerce, digital marketing and brands, according to its CEO.
L’Oréal recorded sales of EUR13.07bn (USD15.5bn) for the first half of 2020, dropping down 11.7% on a like-for-like basis compared to the previous year while net profit declined 13% to EUR2.14bn (USD2.5bn).
Sales figures in were down in Asia Pacific on a like-for-like basis compared to the previous year to EUR4.46bn (USD5.29bn).
In the first half, sales in China grew by 17.5% in a negative market. The second quarter saw growth of 30%.
