The total FMCG spending sees a slowdown in nearly everywhere across the globe in 2016 and significantly reached a 5-year low in China. However, China’s beauty market is booming and has been growing strongly and consistently on a double-digit rate for years, according to “Decoding beauty market for China” report released by Kantar Worldpanel.
Premiumization, regime sophistication, omni-channels, mobile interaction and young consumers are the key growth drivers of Beauty market. Consumers are also buying across all price tiers, with premium items increasing the share of basket and contributing to 82% of total market growth.
In the same way, in terms of regimen sophistication, the average number of cosmetic items purchased per buyer have increased continuously from 2012 to 2016. In that sense, facial masks have advanced from the 6th most important skin-caring regimen to the 4th in 4 years.
Consumers are leading the changes in cosmetics channels in China. On average, Chinese consumers shop at 2.5 channels with 6.4 trips a year for cosmetics purchases, 23% of them are omni-channel users buying from at least 3 types of trade. Their average spending, RMB 1,314 a year and 15-29 year-old age group is key contributor, accounting for 58% of these omni shoppers.
“These Omni shoppers are young and category heavy buyers. They choose different products in different channels as each channel has different expertise that meets different needs and purposes”, said Marcy Kou, CEO of Kantar Worldpanel Asia. ”For example, they shop online to try something new while going to cosmetics stores to try on makeups”.
Girls in their 20s play an important role for personal care sales, because in a 14.3% of total population, they contribute 38% of makeup sales value. They also have a clear profile showing that they use a variety of niche categories, like to try new products, are good at mix-and-match brands, purchase premium sectors, use omni-channel users and embrace e-commerce.
Finally, in spite of China’s beauty market experiencing a strong growth, it’s still far to reach Korea, an advanced market that serves as a good reference fort the beauty industry in the region. Now some of the trends in Korea are the situational care for micro moments, multi-function products are growing from 8% to 17% from 2011 to 2015, and formats and benefits keep diversifying. It is expected that the China beauty market picks up those trends as well.
“Considering what is happening in China and in Korea, we believe that situational care leads the way to the future of beauty market, meaning that consumers will change their beauty routine according to the needs, events, mood and emotions at the moment”, said Marcy Kou, CEO of Kantar Worldpanel Asia. “Today, brands may still be able to get ahead by winning consumer’s loyalty, but in the future, only those who are able to breathe with consumers through highs and lows in life will win”.
