Marking the lowest growth rate since 2005, China’s cosmetic market registered retail sales volume of ¥172.4bn in 2014.
The figure was revealed in a report by Market Research Reports, which said the influence of factors including the economic slowdown led to the decline.
However, there was an air of optimism among the results; due to an “unceasing release of demand from second- and third-tier cities in China” the cosmetics market is predicted to continue to maintain steady growth; it is projected to reach ¥245.3bn by 2017.
The report went on to provide insight into specific sectors. Skin care and make-up continue to account for the lion’s share of consumption in China, with a combined share of 61.2% of retail sales in 2013. Skin care takes the majority of this share, with a proportion of 48%. It appears that the market for male grooming products is also on an upward trajectory, with total retail sales accounting for 4.6% of the market. But the Chinese market does not just have to vie with homegrown competition. Approximately 86% of retail sales volume came from foreign-funded enterprises. L’Oréal, Estée Lauder and P&G were identified as key players that have “constantly adjusted brand strategies and intensified the building of channels” in the market.
Despite this, there are still some strong domestic players too; Chinese companies Jahwa and Marubi are two examples of those that have embarked on new projects and readjusted strategies in order to gain ground in the market.
Shanghai Jahwa embarked on the Qingpu Base Removal Project at the start of this year, said to be worth ¥1.355bn; it is anticipated to be put into production in 2018. Meanwhile Marubi, which focuses on facial skin care, is taking great strides after it received LCapitalAsia investment from LVMH in 2013. In 2014 the company announced a cosmetics production and construction project.
