Personal-care products: the beauty spot of retailing

Looking beautiful is an enduring pursuit, so it's not surprising products like skin cream, lipstick and other beauty products remain a bright spot in the slowing consumer market.

Looking beautiful is an enduring pursuit, so it’s not surprising that products like skin cream, lipstick and other beauty products remain a bright spot in China’s slowing consumer market.

Driving the sales is the introduction of new products with fancy claims. It seems consumers are always game for novelties when it comes to improving their appearance.

Research firm Mintel said China’s beauty retail market grew 13.3 percent last year to 251.7 billion yuan (US$40 billion), surpassing 8.4 percent growth a year earlier. The market is expected to reach 409.8 billion yuan by 2022.

Sales have also been driven by online platforms selling personal-care, hygiene and beauty products. While consumer spending on goods rose 4.3 percent last year, sales of skin-care products alone soared 17 percent, according to Kantar Worldpanel.

Online shopping sites such as Alibaba’s Tmall and JD.com offer potential buyers an array of information about such products, including reviews by other users. 

Gu Mai, general manager of Tmall’s consumer goods division, said an average 100 million female users visit Tmall every day and it intends to help consumer goods brands reach a value of more than 1 billion yuan on its platform. 

Among the best-selling personal-care items on Tmall are lipstick, sunscreen lotions, deodorant and beauty gadgets.

Tmall has also been promoting new technologies, such as virtual reality that shows how makeup would look on a consumer, and vending machines selling items like lipstick. 

Shanghai office worker Cindy Liu said she often visits Tmall to search for the latest offerings and discounts in skin-care and beauty brands.
“It’s much easier than visiting department stores, where shop floor assistants often peddle new products that I don’t want,” she said.

Ti Gong

Consumers try on cosmetics using virtual reality gadgets that show how makeup would look on their faces. 

Personal touch

Others prefer a more personal approach.

“After reading reviews online, I go to shops to try lipstick samples for myself,” said freelancer Sophy Lu. “Virtual lipstick technology doesn’t reflect the true colors on my skin, and it’s too much trouble to return a tube of lipstick if the color isn’t right.”

Still, cosmetic makers are betting that virtual technologies may tempt consumers to consider cosmetics they wouldn’t otherwise try.

Jason Yu, general manager of Kantar Worldpanel China, said the growth in the personal-care and cosmetics market is likely to come from niche categories such as makeup remover, makeup primer and blemish concealers. He said a survey shows that people who buy beauty products are stepping up the number of products they use in daily skin-care and makeup procedures.

“Consumers tend to favor easy-to-use products and those with claims of high quality and safety,” Yu said.

Personal and household hygiene products such as mouthwash, electric toothbrushes, laundry detergents and fabric care products are also joining the premium-product trend online. Manufacturers are repackaging products to give them more eye appeal and stepping up claims of practicality.

Colgate Palmolive China Vice President Liu Lijian said the company wants to give everyday toothpaste a touch of glamour. The company, in conjunction with Tmall, unveiled a new heart-shaped toothpaste at the end of last year.

Tmall also offers a lucrative platform for overseas brands seeking to tap the China market.

Bigger than digital

Darphin, a French skin-care brand affiliated with Estee Lauder, began a trial operation on Tmall last month even before it opens an official counter in domestic department stores. The company said it is using Tmall data to target potential buyers and establish rapport with consumers online.

L’Oreal China Chief Executive Stephane Rinderknech said the Paris-based company’s online spending on marketing has exceeded offline expenditure in recent years.

“We don’t do digital for the sake of digital itself,” he told a Shanghai briefing last month. “Our driving force is to figure out new ways to satisfy consumer demand.”

Beauty brands are expected to step up their marketing by involvement in cultural events and by use of celebrity endorsements, Kantar Worldpanel’s Yu said.

Peh Chao Lin face cream, a Shanghai brand dating back to the 1930s, is tapping ancient Chinese culture to inspire consumers. Last year, it launched a gift pack sold on Tmall, with packaging resembling an ancient jewelry box from the Imperial Palace.

Chinese actress and pop star Fan Bingbing’s proprietary beauty brand FANBeauty has launched its “radio frequency” skin-treatment machine in collaboration with Taobao. She said beauty devices utilizing the latest technology are the big trend in consumer goods.

Convenience and time-saving features are key factors in the marketing of beauty devices, according to Jessica Jin, Mintel associate research director.

She said sales of such devices are expected to grow more than 50 percent this year.

Tmall is not alone in capturing the attention of those seeking beauty. JD.com is closing the gap with the most visited online channel for beauty and personal-care products, a Mintel study shows. Other preferred sites include Alibaba’s Taobao and VipShop’s Jumei website.

Industry analysts said an emerging trend to watch in the beauty products market is the turn toward a natural look, using more natural products. That is starting to replace the heavy makeup that has dominated the fashion scene for many years.

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