Beauty and Skincare - VC Investments in China
Fourteen pieces of information, data, and/or statistics surrounding the beauty and skincare products that are most popular in China with consumers have been curated and presented below. Where possible, we have included information surrounding the rise of Chinese beauty (often called C-Beauty), cruelty-free products due to changing legislation around animal testing, popular beauty and skincare devices, the rise of plastic surgery and its potential impact on the beauty industry, and other data that shows the strength and/or growth of the trend.
- With 2019 sales reaching $2 trillion, China's e-commerce market is the globe's biggest, and is more than triple the United States sales of $600 billion, according to eMarketer. China's dominance in e-commerce might be best represented by the cosmetic vertical. The annual online sales of cosmetics, skincare, and personal-care products in China grew at an astonishing forty-six percent, forty percent, and thirty-seven percent, respectively, over the past twelve months, surpassing the overall consumer goods category, which increased by thirty-four percent.
- According to Tmall, there will be an increase in the purchase and use of intelligent beauty products. This category is poised to emerge as one of the top beauty trends this year, boasting products like the voice-controlled smart mirror, smart hairbrushes, and sonic skin-cleansing devices. In fact, about "fifty-nine percent of urban Chinese women aged 20-49 reported they have used at least one type of beauty device at home", Mintel research revealed. According to the most recent data available from 2017, this is a market which was worth an estimated US$616 million in retail value.
- Chinese males are becoming more aware of their appearance, thanks to the influence of K-Pop and J-pop. This has led to an increase in sales of male personal care products. It is predicted that in the three years following 2019, the sales growth rate of cosmetics products targeted towards the male segment in China will reach 13.5%, juxtaposed with the global rate of just 5.8%.
- At the beginning of 2020, this source provided information surrounding the rise of C-Beauty brands (brands that are founded in China) and are now directly competing with international companies for Chinese consumer loyalty, as well as their spending dollars. This has taken hold even more after COVID-19, as the pandemic has ignited a "my country first" attitude worldwide. China is no exception to this and a “buy Chinese” trend that was already reshaping the beauty business in China, is accelerating.
- “C-style makeup", a look that has been specifically attributed to Chinese women, has gone viral on social media in 2020. The hashtag “C-style makeup everyone” was attached to over 210,000 selfies from users on Weibo. This look is best described as the antithesis of the J-beauty and K-beauty styles, both of which employ more innocent-looking features. C-style is much more modern and consists of "sharp eyebrows, royal-red lips, and a clear complexion". Tmall’s Annual Beauty Award on April 13 overarching theme was “C-style makeup”.
- Consumer patriotism, an aesthetic shift, and a hyper-digitized retail reality, all of which grew during the COVID-19 pandemic, have made conditions favorable for C-beauty brands over the long term. "If outside brands want to compete, they’ll need to adapt more thoroughly and display a deeper cultural commitment."
- The top brands in C-beauty, according to this source, are Pechoin, Kans, Herborist, Inoherb, WEI Beauty (this one is based in the US), and Cha Ling.
- According to this source, the biggest opportunities that will dominate China in 2020 are “natural”, “green”, “clean”; increasing popularity of traditional Chinese ingredients; and an increase in the interest of men’s skincare.
- Cosmetics sales in China have proven to be resilient, even up against the COVID-19 pandemic. Cosmetics sales through February were down about fourteen percent, while overall retail sales dropped twenty percent. However, given that, cosmetics sales in the country came roaring back in March according to the South China Morning Post. Consumers purchased items like face packs and make-up removers at a rate that was five times higher across eCommerce giant Pinduoduo, measured in March versus February’s results. “Sales of color cosmetics, such as lipsticks, eyeshadow and eyebrow pencils, also recorded decent growth, but the transaction amount seems to be controlled [at a relatively lower level].” Additionally, Alibaba revealed that eye focused (mascara, shadows, liners) cosmetic sales increased 150 percent, during the second week of February in 2020.
- McKinsey research has observed that online sales for beauty-industry players has spiked 20 to 30 percent in China during the COVID-19 outbreak. These figures are reflected in the McKinsey COVID-19 Consumer Pulse Surveys.
- In May 2019, So-Young International, a Beijing-based company raised $179 million through an initial public offering on the Nasdaq Stock Market. "The online platform connects cosmetic surgeons with the increasing number of beauty seekers in China."
- Twenty-two million people in China underwent cosmetic procedures in 2018. Of those fifty-four percent were under the age of 28, and eight percent were teenagers.
- According to Ifop, there are many changes being observed with the Chinese consumer surrounding their beauty habits. They include heavier usage of sun care, increased interest in advanced skincare solutions known as cosmeceuticals, movement towards "luxe" premium beauty and personal care, and increasing interest in natural, herbal or organic ingredients and biotech products,
- Recent regulations in China has marked a movement away from compulsory animal testing for cosmetic companies. In March 2019 the Gansu Province National Medical Products Association announced that post-market animal testing would no longer be required for cosmetic products. However, pre-market animal testing was still mandatory.