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Chinese beauty market nears $50bn

News, 25 July 2016

SHANGHAI: Even though Chinese consumers are making less frequent purchases of beauty products, the market is still expected to register strong growth over the next four years, according to new research.

As reported by Inside Retail Asia, research firm Mintel has forecast that China's beauty retail market will be worth 338bn yuan (US$50bn) by 2020, driven in large part by demand for facial skincare.

According to Mintel, two-thirds (65%) of Chinese consumers spent more on facial skincare last year than they did in 2014, a development that prompted Chen Wenwen, senior beauty and personal care analyst at Mintel, to describe the beauty retailing market as "resistant to decline" despite falls in purchase rates.

Based on market intelligence during the three months to October last year, Mintel found declines in all beauty and personal care categories, including hair beauty products (-32%), beauty supplements (-28%) and fragrances (-26%).

But the market appears to be buoyed by the growth of mobile purchases because a full 44% of consumers used a mobile device to pay for a beauty or personal care product online over the survey period – or more than twice as many since 2014.

"To leverage their passion and spending power, it is essential for both retailers and manufacturers to engage them via mobile platforms," Chen advised.

Mintel's upbeat projection for the facial skincare market in China coincided with separate research from Kantar Worldpanel, which analysed the purchasing behaviour of time-pressured young Chinese mothers when it came to skincare and cosmetics.

Kantar discovered that Chinese mothers aged 26 to 35 were less interested in new cosmetics than childless women in the same age group and that by a significant margin they opted for well-known brands (69.3% versus 54.2%).

"It shows that for Chinese mums they don't have time and energy to try new things or brands and validate them," said Elaine Liu, senior account manager of Kantar Worldpanel China.

"To make quick decisions, they rely on big brands because they're more likely to guarantee effect and safety," she added.

Data sourced from Inside Retail Asia, Kantar Worldpanel; additional content by Warc staff