Anti-ageing products are enjoying strong growth in China's image conscious market. Dominique Patton reports from Beijing
The anti-ageing products business is among the most dynamic in China’s skin care market sub-sectors, with growth fuelled by increasingly well off consumers anxious about their image. This segment, when combined with specialist skin nourishing products, was worth around $868.8m in 2007, according to research firm Euromonitor. It is heavily dominated by international brands, with Procter & Gamble’s Olay taking a leading 12% share with its Regenerist line. Japan’s Shiseido Aupres brand, Avon and L’Oréal follow closely behind.
Michelle Huang, senior research analyst at Euromonitor, said Chinese interest in anti-ageing products is reflected in the widening range of products on offer. “You can see that consumers’ knowledge of anti-ageing products is growing. They have moved from creams and lotions to toners,” she explains.
The age group using anti-ageing products within China is also expanding. “Previous studies found that Chinese consumers start using anti-ageing products at 30 but now they’re getting younger. People want to prevent wrinkles instead of waiting to see the first one, especially those living in first tier cities,” says Huang, referring to Beijing, Shanghai and Guangzhou.
The biggest age-group for anti-ageing products is from 35 to 44 years old, accounting for 43% of the market, according to P&G research. The 25 to 34 year old group makes up 30% but is growing rapidly.
“Lots of university students become more interested in skin care when they start doing job interviews and getting married,” says Li Chen, P&G’s China spokeswoman. “They’re more aware that their personal image will help a lot in their career and social life.” People want to look young for better job opportunities, adds Huang, which explains why P&G is targeting urban, career-oriented women through outdoor advertising. “You see Olay ads in the downtown area of large cities where working professionals pass by on their way to the office. It’s a very innovative supplement to a TV channel, especially as busy people don’t have much time to watch TV,” she adds.
P&G has been spending on education too, supporting the launch last year of anti-ageing toners. “It’s the first time we’ve seen a mass brand educating consumers on how to better absorb nutrients and how to use toners,” says Huang.
One factor driving this investment is the higher spend on anti-ageing products. P&G’s Li says Chinese consumers who buy these products have a middle to high income of about Chinese RMB4,000 ($584.82) per household. “Anti-ageing consumers’ income is higher than those buying whitening and moisturising products. And they’re very deeply involved in skin care; 37% use more than three items per day.”
Olay focuses on ‘masstige’ consumers, those between mass market and prestige whose demand for age fighting products is currently growing by more than 20% a year. Its three anti-ageing lines target different demographics via different channels: the Regenerist range sells at around RMB200 ($29.24) at beauty counters in pharmacies and department stores, Total Effects is sold at about RMB100 ($14.62) in hypermarkets and the Age-Defining Series sells for RMB50-70 ($7.31-$10.23) in supermarkets.
Local firms have yet to make an impact on this fast growing market, perhaps because few have the premium image associated with anti-ageing products. “Most foreign brands have a long history of research and development so people trust them more,” says Chen Shao Jun, secretary general of the China Association of Fragrance Flavour and Cosmetic Industry.
One of the biggest Chinese skin care brands, Tjoy is taking its first steps into anti-ageing with an ingredient said to have multiple benefits – Q10. Launched at the end of 2008, after almost a year on trial, the new range is said to have firming effects as well as whitening the skin.
“Products that specialise in one function are popular in beauty salons but we produce for the mass market so we need to combine them,” says Hu Jian, Tjoy brand manager. “In China, people are really into white skin while anti-ageing is still very new. Products that combine these functions are easier for them to accept.”
Multifunctional products continue to be popular in China, says Ralf Ritter, a fragrance consultant working with cosmetics companies here. “It’s got to perform more than one function so people believe it’s value for money.”
Alticor’s Artistry brand, one of the top 10 anti-ageing products in Euromonitor’s ranking, has also combined anti-ageing and whitening effects in a single product, and Ritter expects to see more of this.
NATURAL VERSUS HIGH-TECH
Another popular trend is towards natural and herbal products. Shanghai Jahwa’s Herborist brand is one of the few local names that stands out in the anti-ageing market, says Euromonitor’s Huang. It clearly targets the masstige market with high prices. A 50g jar of Herborist Turnaround Firming Day cream sells for RMB330 ($48.24), while night cream and toner is more expensive. The company is also planning to launch a new anti-ageing concept under a French brand, Vive, says Li, without revealing details. It will be priced at around RMB600 ($87.72), demonstrating the success of higher priced products. “It’s the quality-price relationship. If it was cheaper, people probably wouldn’t buy it,” says Ritter.
Herborist’s anti-ageing formula is made of three different herbs common in traditional Chinese medicine. According to the brand’s website, rhodiola combats skin fatigue and radiation as well as ageing, timber fungus improves blood flow and Polygonatum odoratum works as an antioxidant. The same formula is also available in a neck cream and body lotion. “These products are popular because they contain herbals,” says Li Meng, brand manager for Herborist.
Recent safety scandals, both in the cosmetics arena and in other sectors like food, have boosted demand for natural products in China. “It’s a growing fashion, like the trend for organic food,” says Chen.
Nanjing Jianong Biochemical Co, owner of Tjoy, is hoping to cash in on this by developing anti-ageing products that combine traditional Chinese herbals with some of the high-tech ingredients produced in the west. “The resources are not a problem, but we need to research how to put those modern ingredients together with traditional herbals,” says Hu.
Meanwhile cosmeceuticals, or products that straddle the line between cosmetics and pharmaceuticals, are increasingly popular in China, says Huang, with many new brands applying biologically active ingredients. Olay, which claims to update its technology every two years, recently added more amino peptides to its formula.
MEN AND AGEING
Leading brands are also expanding into men’s anti-ageing lines. L’Oréal’s Men Expert range is prominent in the Beijing stores of Watson’s pharmacy chain, with gift packs of Vitalift cleansing foam and Vitalift retightening moisturiser on sale for RMB49 ($21.78); marketing features ex James Bond actor Pierce Brosnan.
L’Oréal declined to comment on how the range was performing but most believe the men’s market to be a huge opportunity. P&G is “working on” this category, says Li, adding that many local firms are too. Shanghai Jahwa’s Golf brand, said to be China’s first male skin care range, launched an Active Firming Lotion and an eye cream containing olive extract as well as a firming face wash in 2006. The anti-ageing range is priced higher than the regular lines. “There are not many men consumers but these anti-ageing products have a bright future,” says the Herborist brand manager, Li.
“I believe the men’s segment will grow much faster than the women’s segment,” adds Ritter. Though male skin care probably accounts for only 1-2% of total cosmetics spend in China, he suggests it could make up 15-20% within three years. “The little emperor syndrome is fuelling the cosmetics purchasing trend,” he says, referring to China’s only children, with boys especially tending to be spoilt by parents and grandparents. “They are vain in terms of appearance and have a huge discretionary income. And face and status is way more important in China than in Europe.”