Cosmetics brands and retailers are jockeying for position as the Chinese economy weakens
If 2013 and 2014 were all about the rise of South Korean personal care product brands in China, then 2015 was the year that regional currency wars and weaker economic sentiment at home dictated how Chinese consumers spent on cosmetics and toiletries. The decline in the value of the Japanese yen has rebooted the popularity of Japanese brands, while more expensive currencies have dented the lure of South Korea and Hong Kong for mainland Chinese shoppers, either as tourists or purchasers of imported products. Meanwhile, the increasing sophistication of online commerce in mainland China is starting to change retail models and open up new direct channels to Chinese consumers for smaller overseas brands.
While China is now the world’s second largest market for cosmetics after the US, growth in sales has slowed, albeit to a still impressive 12.39% – the lowest growth since 2005. China’s cosmetics and toiletries sector recorded retail sales of Chinese yuan renminbi RMB333.86bn (US$51.5bn) in 2013, according to data from China-based market research company iResearch Consulting Group. This figure is estimated to exceed RMB700bn ($108bn) in 2017, according to accounting and consultancy company Ernst & Young (this figure includes all cosmetics, skin care, shampoos and deodorants), while the EU Chamber of Commerce in China valued the cosmetics sector at RMB210bn ($32.1bn) in 2014 – a figure that does not include toiletries. Euromonitor International projects average annual growth of 8% for cosmetics and toiletries sales in China in the five-year period 2013-18.. . .
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