Prestige beauty sees healthy growth
Total sales of prestige beauty [1] in China increased by 21 percent in 2011 compared to the previous year, revealed a recent study conducted by The NPD Group. The skincare and makeup were the most dynamic categories, growing by 23 and 17 percent, respectively.
Anti-aging continued to play as the driving engine of the prestige skincare market, accounting for a half of the market and posting a robust growth of nearly 27 percent in 2011. Hydrating (+19%) and whitening (+15%) skincare also played a big role in the category growth.
In prestige makeup, the face segment captured 59 percent of the category’s dollar share and increased by 18 percent in value from 2010. “Products that make the face look lighter and smoother like foundation and makeup base continued to play a key role in China. Foundation and makeup base led the face category, up 24 and 30 percent, respectively,” said The NPD Group.
In addition to face products, lip helped drive the growth in makeup, with a rise of 26.5 percent from 2010 to 2011 (+31% for lipstick sales and +22% for lip glosses). On the other hand, sales of eye products were soft (up +6%) due to mascara’s sharp decline of -3% in dollars and the slower paced sales of eye shadow and eye liner.
Online sales to skyrocket
While the rise of prestige beauty was quite predictable in a country where consumers are seeing their living standards rising quickly, the recent explosion of online sales is more surprising.
Actually, according to Kline & Company [2], beauty sales through the Internet in China have been growing at a rate of nearly 200% since 2006 and are estimated to be worth nearly US$8 billion at the retail sales level in 2011, making it the largest Internet beauty market in the world.
“This news is astounding,” remarks Karen Doskow, Industry Manager at Kline, “and to put this into perspective, Chinese online beauty sales in 2011 are nearly equal in size to the entire beauty market for France, which is the largest market for cosmetics and toiletries in Europe. Furthermore, Chinese Internet beauty sales are nearly nine times larger than the U.S. Internet beauty market.”
“The rapid growth of Internet usage over the past five years has given way to a tremendous surge in sales and availability of local and foreign cosmetic and toiletry brands,” explains Li Wang, Vice President of Kline Asia. “The number of online users and buyers in China has skyrocketed. Internet user numbers in China approached 457 million in 2011, up from 137 million in 2006. Online buyers now total some 205 million in 2011.”
So-called “e-malls,” such as Tiantian.com and Alibaba’s Tmall, are enabling customers to buy from a wide range of domestic and foreign skin care and makeup brands in a convenient one-stop shop. “We expect the growth of these portals to remain quite robust, driven by continually improving socio-economic dynamic, as well as an increasing appetite for Internet convenience among all consumers,” adds Doskow.
