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What Happened: China’s cosmetics retail revenue totaled $9.53 billion (65.6 billion RMB) in the first two months of this year, recording a year-on-year growth of 3.5 percent, according to China’s National Bureau of Statistics.
The country’s beauty market is rebounding quickly after a tough year marred by economic uncertainties, pandemic policy changes and numerous lockdowns. In 2022, total cosmetics retail sales fell below $58.16 billion (400 billion RMB), making this recent uptick the first since last July. Despite the sales slump, interest in cosmetics and beauty has no doubt grown steadily in China, with views of online makeup tutorials hitting a monthly average of 100 billion last year.
The Jing Take: There seem to be bright times ahead for the industry as a whole, but the market is not just growing — it is evolving. For brands to stay ahead of the curve, it will be critical to track the changes in consumer motivations, habits and interests. Premiumization has begun to polarize the beauty market in many ways, with higher-end brands sweeping up interest as female consumers invest in themselves more and beauty becomes increasingly adjacent to China’s booming wellness and self-care lifestyle trends. Euromonitor predicts that the premium beauty sector could account for 53 percent of market share in China by 2025.
Some industry giants are investing heavily in their prestige brands and premium experiences, such as L’Oréal Paris’ recent art exhibition at Tank Shanghai. Other brands like Maybelline and LVMH’s Cha Ling have reduced the number of physical stores in China to better optimize growth.
Meanwhile, Kering Group’s announcement of a new in-house beauty division shows that the conglomerate is moving to further develop its prestigious beauty labels, viewing them as key growth drivers. Hermès also plans to extend its beauty offerings with a new line of eye makeup products after reports of strong Chinese demand in 2022.
While women’s beauty products dominate the market, men’s beauty has also staked out a share — with the men’s skincare segment predicted to reach $10 billion (68.6 billion RMB) annually. Ecommerce continues to be the primary sales channel for the category but with the lifting of most pandemic restrictions, China is also seeing a recovery in brick-and-mortar shopping. This is good news for players like Florasis and Armani Beauty, which both opened luxurious and experiential flagship stores in China at the end of 2022.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.