BEIJING: Cosmetics companies such as L'Oréal, Estée Lauder and Mary Kay are increasingly looking to the Chinese market as they seek to drive growth.
Research firm RNCOS has recently predicted that the Chinese cosmetics and beauty sector will post a compound annual growth rate of 13% over the period from 2009 to 2012, taking it to a value of $28 billion (€20bn; £17bn) by the latter date.
Procter & Gamble recently launched an online "soap opera" aimed at female consumers in the country, while Unilever has also used a "minifilm" starring Catherine Zeta-Jones to promote its Lux shampoo range to this target audience.
L'Oréal sells 16 brands in China, from Giorgio Armani make-up to Maybelline lipstick, and is aiming to launch its Keill skincare range there later this year.
It posted a 4.7% uptick in sales in the world's most populous nation in 2008, with its products aimed at men contributing some 12% of revenues overall.
Paolo Gasparrini, president and managing director of L'Oréal China, argued that the "beauty products market is huge in China."
More specifically, he said "Chinese people now like to try new things and advanced products, and are more brand-conscious and more receptive to foreign ideas."
Gasparrini also suggested that the country could become L'Oréal's biggest single area of operation by sales in the future.
However, he added that the French giant still needs to "grow to be the number one in China's market in both sales revenue and brand effect" in order to achieve this.
Carol Chen, general manager of Estée Lauder in China, said the recession makes the country "even more important and more strategic", because it is one of the few areas enjoying sustained growth.
Last year, Estée Lauder's Chinese revenues increased by 41% year-on-year, and the owner of Clinique and Tommy Hilfiger now has a presence in over 30 cities across the country.
Overall, the company has eight brands on sale in China, where it also manufactures products targeted specifically at the domestic market.
However, Chen argued all of its brands have a "certain kind of aspirational qualities and we want to keep that aspirational quality; we don't believe that will change from market to market."
Similarly, Estée Lauder now plans to modify its approach in light of the downturn, and will now focus on developing its existing operations rather than expanding further.
"In the next 12 to 18 months, we are going to go more deeper in the cities that we are already present in, rather than opening in a lot more new cities," Chen said.
Mary Kay, the Texas-based skincare and cosmetics firm, entered China in 1995, and has recently forecast that the country will leapfrog the US to become its biggest market in the next five years.
Paul Mak president of its Chinese arm, said "I think as the China market continues to grow, the second and third and fourth tier cities, more and more people will be a part of it, so the geographic expansion is still our focus."
Data sourced from PBS/China Daily/RNCOS; additional content by WARC staff