China sees record-breaking beauty sales in May

    In May 2024, retail sales amounted to $5.6 billion.
    In May 2024, retail sales amounted to $5.6 billion. Image: Getty Images
    Jing DailyAuthor
      Published   in Beauty

    On June 17, China’s National Bureau of Statistics released economic data for May, indicating that the total retail sales of cosmetics from January to May this year reached 176.3 billion RMB ($24.4 billion), a year-on-year increase of 5.4%.

    In May alone, retail sales amounted to 40.6 billion RMB ($5.6 billion), 18.7% YoY growth. This 18.7% increase is the highest since April of last year. In April 2023, the retail sales of cosmetics grew by 24.3% YoY.

    Notably, the single-month retail sales of 40.6 billion RMB ($5.6 billion) in May set a historical record for May, surpassing the previous record of 33 billion RMB ($4.6 billion) in May 2022.

    Meanwhile, according to Chinese-language media, luxury giant Estée Lauder Companies (ELC) is expected to impose a 10% to 20% price hike on July 1, following the lead of competitors like L'Oréal Group and names like Van Cleef & Arpels.

    The anticipated price increase comes after ELC’s financial metrics saw a slight improvement. ELC had a 10% drop in net sales to $15.9 billion for the fiscal year 2023, and a 58% reduction in net earnings to $1.01 billion.

    However, ELC reported a 5% gain in net sales globally and a 3% increase in net sales in the Asia-Pacific region, which was driven by mainland China, Japan, and Hong Kong, in the first three quarters of the 2024 fiscal year.

    China’s cosmetics market is expected to grow by 6.4% to 516.9 billion RMB ($78.2 billion) in 2023, according to Ai Media Consulting. Local brands are gaining a substantial market share by providing premium goods at affordable costs.

    Success in the Chinese market is also boosting domestic companies’ aspirations to go worldwide, such as Florasis, which recently launched in Paris, its first location in Europe.

    Price hikes have the potential to reduce consumer loyalty, particularly in China, even though they may help to offset rising material prices or inflation.

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