China’s demand for medical beauty products and services is soaring making China’s emerging “appearance economy” one of its hottest areas for investment in 2017. Industry estimates expect China’s medical beauty demand to exceed USD$70 billion by 2020 – the world’s largest market with a compound average annual growth rate approaching 40%. At the center of these industry developments, China Beauty Expo, Asia’s leading platform for beauty industry insights, outlines five major trends that will shape China’s medical beauty market in 2017.
China’s rampant illegal medical beauty practices will continue to spread in 2017, despite growing government and industry concern. In some segments of China’s market, unregulated and dangerous beauty practices are expected to get even worse, and industry insiders see little near-term progress in cracking down on what have been identified as the “3 violations”.
China’s large market size, rapid and uneven economic development has created numerous areas for unregulated and illegal players to enter the market. Three main areas of licensing have drawn attention to “3 violations”: lack of proper business license, production license and hygiene license. Formal licensing standards in each of these areas are designed to block shoddy products, fake products and materials, and unregistered service providers. The China Beauty Expo, itself, requires all exhibitors to provide documentation of all three licenses (i.e. business, production, and hygiene) in its effort to add transparency to the industry.
2. Niche Products and Specialist Suppliers Increase Buyer Choices
As larger, generalist suppliers are facing increasing pressure from more flexible, specialized smaller competitors. Examples of areas where niche suppliers will continue to pull ahead in 2017 include: cosmetic eye surgery, rhinoplasty, liposuction, and scar repair. Specialist suppliers in these higher margin, focused segments are expected to build scale as they develop recognized brands and attract capital. Reflecting this growth in the medical beauty market, China Beauty Expo saw a sharp increase in interest in exhibition categories such as anti-aging, high-end skin care products, salon and spa equipment, nail and eyelash design and hair care.
3. Mobile Internet Usage Continues to Reshape China’s Consumer Landscape
Mobile Internet marketing and commerce applications will continue to have a major impact on China’s medical beauty market in 2017. Always-on, ever-available product information and purchasing ability is likely to put pressure on prices and margins in the near future.
4. Expect Beauty Equipment Suppliers to Reap Rewards from New Technology
Technological innovation is continuing to reshape the competitive playing field in China’s medical beauty market. China has begun to see consolidation at the upper end of the market with weaker players struggling to keep pace. The Professional Beauty segment of China Beauty Expo consistently brings together leading products and services through its unique B2B trade platform.
5. Downward Pressure on the RMB Benefits Exporters
Recent declines in RMB exchange rates bode well for China's medical beauty product and equipment exporters in 2017. Market demand for high quality medical beauty equipment remains strong and emerging Chinese industry players may be able to take advantage of rising product quality and favorable exchange rates to build scale.