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Industry News

Skin, Hair Care Market in China

Source: Author: Date:2011-10-20

    The Chinese cosmetics and toiletries (C&T) industry experienced tremendous growth in the last decade. At present, the country‚Äôs 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‚Äôs 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‚Äôs 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‚Äôs 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‚Äôs 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 experts 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‚Äôs 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.