As China economy continues to thrive become more prosperous. China has grew into one of the biggest consumers for beauty products globally. China’s has created a seemly unquenchable desire for premium cosmetic products. With a steadily increasing rate of consumers buying cosmetic goods, with no signs of slowing down. This spike has caught the attention of both investors and beauty industry. Creating a hard analysis of beauty industry and possible growth potential in china.
The beauty industry is seemly indestructible and unfazed by the unstable economy. Unlike many industry the beauty industry has been one of the few industries that has seen a consistent positive growth for the past 10 years. While one could argue that the rise of the beauty industry was enviable. Due to the rise of China’s market values and culturally for for the beauty industry. Unlike many countries both men and women have a strong passion for cosmetic products.
Falling right behind the United States, China has become the second biggest consumers of cosmetics products. A major feat for China for the emerging economy known as a global manufacturing hub. It is now hypothesized that China won’t be number two for too much longer. In fact, China is projected to surpass the United States in their consumption of cosmetic products by the 2020.
This shift in leadership of the global consumer of beauty products can be mostly attributed to China’s changing economy.China’s has swiftly begun to shift from a manufacturing economy into a consumer economy. At the same time China’s middle class seems to exponentially growing. Another factor in the shift is increased options in Chinese consumers now have as online shops pop up and more Chinese consumers travel abroad. Buying in bulk because majority of the American brands they are exposed they cannot purchase in China
Preferred Foreign and Premium Products
Driving the demand of cosmetic goods in China is the prestige of American luxury cosmetic products. Sadly domestic purchases of beauty/cosmetics products in China has steadily fallen since 2014. Although, this may not be a surprise to those who understand that the modern Chinese beauty/cosmetic consumers. As consumers become more globally connect, the consumers would rather purchase foreign products. Being exposed to new brands, new products and foreign retailers online store are decreasing the value of domestic cosmetic goods.
With revenues from the beauty industry estimated to be more than $35 billion in 2016 and a steady annual growth of higher than 10%. The time to invest within China is now! Just like the United States, cosmetic brands should utilizes Influencer/KOL (Key Opinion Leaders) as a marketing tool. It has been a proven cost efficient and effective way to market and obtain new consumers. So effective that 37% of Chinese buyers say they are aware of new product launches thanks through influencers/KOL’s via their social media channels.