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Skin, Hair Care Market in China


by Randy Wang, project manager, PCHi, Reed Sinopharm Exhibitions

The Chinese cosmetics and toiletries (C&T) industry experienced tremendous growth in the last decade. At present, the country’s personal care market is the second largest in Asia-Pacific, after Japan, and the third largest worldwide. Yet, there is till huge growth potential because of its largely untapped nature. Disposable income among the urban middle class has been increasing rapidly, and the country’s population of 1.3 billion offers a large consumer base. These factors position China as a very attractive market to manufacturers of personal care products, both local and international.

Within the domestic C&T market in China, skin care and hair care are the two largest segments in terms of revenue generation. These two sectors contribute more than 50 percent of total sales within the local personal care industry, and are expected to grow rapidly over the next few years.

The Skinny on Skin Care

Skin care dominates the overall C&T market in China, as it represents 36 percent of all personal care items available. The most popular items within this segment are facial moisturizers, followed by facial cleansers. And with the Chinese becoming more willing to invest in their appearances, the skin care product market is expected to reach US$77.84 billion by 2012.

A number of trends have emerged in recent years. First, skin care products with anti-aging properties grew in popularity in 2010, according to a report by international research firm, Euromonitor. These formulations claim to repair the DNA of damaged skin, thereby slowing down the process of skin aging and reducing wrinkles. When these products first appeared in the market, the primary consumers were mid- to high-income women in their 40s and 50s who were concerned about maintaining a youthful appearance. But with more young ladies becoming increasingly conscious about preserving their looks, the demand for anti-aging products has since shifted to include women in their 20s and 30s.

Skin whitening solutions are also very much in vogue. In China, females are indeed the fairer sex, because a pale complexion is considered an attribute of beauty. Women of all ages strive to attain this standard, which has led to skin whitening solutions becoming popular amongst both the young and old.

Industry experts agree that anti-aging and whitening products will continue to be in demand. Cosmetic manufacturers should take advantage of these trends and develop innovative formulations that help whiten and nourish skin, or even do both. In addition, brand owners should consider exploring the market for such goods in China’s mid- to lower-end cities where women are becoming more cosmetic-savvy about keeping their skin looking young and fair, but have less access to global or larger brand names than consumers in top-tier cities.

Another key point to note is consumers of the C&T market are not limited to women. A key area of growth within the skin care sector is men’s products, because Chinese males are now more concerned than ever about their appearances and the importance of projecting an image of success, which, some believe, starts with good looking skin. As more men become accustomed to the idea of keeping up their appearances, the skin care product segment will no doubt continue on an upward trend. In fact, Euromonitor expects the Chinese domestic market for skin care goods to grow at a greater rate than North America and Europe. Skin care producers will want to continue investing in this area, developing and marketing products that are suited to the specific skin care needs of men.

Happening Hair Care

Next to skincare, the largest segment of the Chinese personal care market is hair care. RNCOS, another research firm, expects the sector to grow at a compound annual growth rate (CAGR) of 15.5 percent between 2011 and 2013. And not surprisingly, shampoos and conditioners are the major products within this segment.

While majority of Chinese previously bought dual-function, value-for-money hair care products, customers now seek out solutions that cater to their particular hair needs. According to personal care products giant, P&G, the driving factor is consumer requirements have become much more specific. For example, specialized shampoos and conditioners for moisturizing, repairing, dandruff treatment or straightening effects are now widely adopted across the country.

With rising incomes, the market for shampoos is expected to grow as basic necessities become much more affordable. Consumer demand for conditioners will also rise as the Chinese population becomes increasingly sophisticated in their hair care routines. What’s important then is for manufacturers to differentiate their products from others and demonstrate how their brands meet specific hair care needs.

A study conducted by P&G reported 88 percent of respondents in Shanghai perceive their hair as damaged. The figures for Beijing and Guangzhou are 70 percent and 58 percent, respectively. These results concur with Euromonitor’s forecast that products with professional or cosmeceutical properties are likely to gain popularity, as consumers have a view that such products offer better results and improve hair health. Hair care companies should strike the iron while it is hot, by developing nutritional hair care products and marketing them as high-end goods.

China on Your Radar

The China C&T market offers manufacturers of skincare and hair care products a host of opportunities. The country’s large population with increasing levels of disposable income indicate that there is indeed much potential for growth.

The demands of the Chinese consumer are ever-changing, and companies must be aware of what is popular amongst the people at any point in time. With proper knowledge, manufacturers will be able to respond accordingly and achieve business success in the country.

Randy Wang is the project manager for the Personal Care and Homecare Ingredients (PCHi), a China-based trade show for ingredient suppliers to engage manufacturers of cosmetics, personal care and homecare goods to meet their growing production demands; and Reed Sinopharm Exhibitions, a joint venture between Sinopharm, the largest state-owned pharmaceutical group in China, and Reed Exhibitions, a trade and consumer exhibitions organizer. PCHi 2012 will be held Feb. 27 to 29, 2012, inShanghai at the World Expo Theme Pavilion, Hall 3.


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