Make-up products have lagged behind cosmetics as a distant second place contender in China’s beauty market. However, the rise of the post-90s generation consumer could signal that make-up is poised to take-off.
Industry analysts have tracked steady double-digit growth in China’s make-up market. Qianzhan Industry Research Institute report on China’s cosmetic’s sector found that make-up sales jumped from RMB 18.8 billion in 2010 to over RMB 51 billion in 2014. iResearch data also shows online make-up sales climbing by 23% between 2014 and 2016. Skincare products posted a 13.2% rise during the same period. China Beauty Expo looks at the outlook for make-up products. Are boom times really ahead?
New Generation of Consumers Drives Growth
A joint survey by CBE and Meisheng Media’s Cosmetic News reveals that China’s post-90s generation consumer prefers a rich diversity of colors. These preferences are reflected in lip glosses and nail polishes – two product categories that have helped fuel make-up sales. Innovative and fashionable packaging has been another strong selling point with this growing consumer segment.
Data from Kantar Worldpanel also reveals the impact that these young consumers are having on the growth of the make-up market. Kantar found that women in their early 20s are the leading buyers of skincare products. Although they represent only 14.3% of the population, they generate 38% of make-up product sales. But, compared to South Korean women, these young Chinese consumers still lag by 53% in their annual spending on make-up products. This gap points to the near-term potential in China’s make-up market.
Kantar Worldpanel’s make-up index paints a clear picture of this consumer segment. They regularly spend on make-up. They’re seeking style and beautiful appearance. They use a variety of exclusive products that target niche consumer needs. They’re more careful about applying make-up products. They know their high-end cosmetics. They’re eager to experiment with new products. They use a mix of brands and are loyal to Korean-made products. They believe in naturalness and buy both offline and online.
CBE’s Outlook for Make-up
China Beauty Expo (CBE) dynamics are strong indicators for the overall industry. CBE attracts more than 3,000 exhibitors and is the platform of choice to launch the latest brands, products, and technologies. CBE data gives us a glimpse of what’s on the horizon for the make-up sector.
2018 Looks Like a Boom Year for Make-up
CBE 2017 saw a sharp spike in make-up growth as the number of exhibiting brands doubled year-on-year. Make-up exhibitors grew beyond the W2 make-up hall, taking new space in a Hall W3 make-up area. Hall N5’s 10,000 sqm “Fashion Block” also saw a jump in demand from make-up brands.
This year’s CBE featured a broad range of make-up brands including Maybelline, Max Factor, Carslan, Lansur, Clio, as well as international brands such as Mistine (Thailand’s #1 make-up brand), Elle, and a make-up brand owned by Pony, the leading fashion blogger. A number of Chinese skincare manufacturers have also begun to explore the make-up market. For example, ChicMax debuted their make-up brand, Hanamino, and Jala Group launched their make-up product line. Meanwhile, Wechat-based beauty brands are also expanding from facial masks and skincare to make-up. Marysharon, a leading Wechat-based brand, launched its make-up brand, BAZ Mr. Beauty, at CBE 2017
Initial exhibitor booth bookings for 2018 show that make-up products will remain a major growth category this year. CBE is responding to this demand by expanding its area for make-up products by adding make-up products to its outdoor VIP area.
Make-up Growth Will Also Drive Upstream Segments of Beauty’s Value Chain
Upstream segments of the beauty value chain like materials, packaging, OEM/ODM/OBM and manufacturing equipment are also cashing in on the make-up boom. CBE has also seen a sharp rise in the number of suppliers in these categories. CBE 2018 is dedicating its Hall N4 exclusively to high-end make-up products and packaging materials. Suppliers including Nicholas Piramal India, Pochet, Heinz-Glass, and high end make-up and perfume packaging companies such as Taiwan’s Der Jinn, as well as EFA, Qiaoyi, Jinghua, Yihong, and Hong Tai have already signed up for the show. OEM specialists such as Woojungtech from Korea; Ismine, 10 Art, and Paristy from Taiwan, and Qili, Meizizhe, and Huachuang will also be there.
Intercos, the world’s largest manufacturer of make-up product also has big plans for CBE 2018 as they double their exhibit area to 450 sqm. Cosmax, a leading manufacturer in Asia will also put in a strong showing at 2018, particularly with their new make-up production facility and new production capacity. CBE is also introducing related forums and events such as Shanghai International Cosmetics Festival, Cosmetics Workshop, and the New Era of Cosmetics Packaging.
Make-up Becomes a Key to Cosmetics Retail Survival
CBE has seen department stores and specialty cosmetics stores remain a major category of buyers at its shows. Online platforms like Tmall and JD have also taken booths at CBE. Based on CBE research and surveys, make-up products have become a critical determinant of offline channel survival. More stores are introducing make-up products to attract younger store traffic. Offline stores enable consumers to experiment with and experience different products and brands. This is also critical for converting them to e-commerce shoppers for follow-on sales.
According to CBE and Cosmetics News jointly published report, “Ten Insights into Cosmetic Stores in China during 2017”, 64% of cosmetic stores introduce an average of five make-up brands in 2017. In some stores, particularly the top 100 chain stores such as Color in Luoyang, make-up products represent more than 30% of sales. Giale has also launched its own make-up brands. Meanwhile, stores are also offering free make-up trial to expand their services and improve customer retention.
Visit the 23rd China Beauty Expo at Shanghai New International Expo Center (SNIEC) between May 22-24, 2018 to learn more about China’s latest make-up trends.