By 2027, China will account for around one-sixth of global beauty retail sales, or $96 billion (690 billion RMB), according to BOF and McKinsey’s latest State of Beauty 2023 report, with skincare forecast to achieve sales of $62 billion (445 billion RMB), up from around $45 billion (323 billion RMB) in 2022.
“The return of travel and the official end of zero-Covid measures will be huge drivers that define new trends in the second half of 2023,” says Christine Chua, China beauty analyst at data intelligence and forecast platform WGSN.
Retailers are pushing large-scale and AI-driven experimental brick-and-mortar activations to draw consumers back, offering bold, extravagant, and swoon-worthy experiences.
As we enter the second half of 2023, Jing Daily talks to experts to identify the major macro trends shaping China’s beauty industry and how cosmetics players might benefit from them.
Douyin: social commerce and livestreaming
Photo: Olaplex Weibo
Douyin is proving to be beauty brand’s next growth engine in China. During the first half of 2023, the gross merchandise value (GMV) of beauty brands sold via Douyin exceeded $10.6 billion (76.6 billion RMB). “On 6.18 shopping festival, it saw a 70 percent YoY increase in sales,” says Allie Rooke, brand strategist at Clean Beauty Asia, who helps cruelty-free beauty brands engage consumers in China.
Growth was propelled by increasing consumption of short video content. “Its educational aspect has led to the popularity of makeup tutorials and skincare routines,” Rooke says.
Brands are pouring resources into this channel. Live commerce in China is expected to achieve $623 billion (4.48 trillion RMB) in sales this year, 19.4 percent of the country’s total e-commerce market, says Danni Liu, managing director at iBlue Communications.
Last month, Olaplex gained 20,000 new followers on the short-video app following investment in livestreaming and ads.
Douyin boasts deep penetration in lower-tier cities, making it a vital platform for brands to reach a wider audience online. “One-third of internet users in lower-tier markets have the habit of watching livestreaming,” says Liu.
Nonetheless, brands and livestreamers are shifting their approach to live broadcasts. Rather than simply encouraging viewers to buy, they offer additional value.
“During 618, brands offered yoga classes, face painting tutorials, and much more. KOLs like Teresa Cheung, who recently started livestreaming on Xiaohongshu, attracted impressive traffic thanks to her outstanding style. She provides brands and products with context through an entertaining storytelling approach that gives shoppers cultural and historical references,” says Rooke.
Beauty tech devices
Photo: Jmoon Weibo
Over the last few months, new and emerging beauty devices have occupied Xiaohongshu’s feed. During China’s mid-year shopping festival 618, sales of beauty devices nearly doubled on Taobao and Tmall compared to last year’s 618 in the first hour on the evening of May 31.
Though the beauty device market was in the past dominated by international brands such as Yamen, Tripollar, and Refa, domestic players are gaining popularity post pandemic.
“During 618, Jmoon and Ya-Man (J-beauty) achieved over $42 million (300 million RMB) sales, followed by Amiro, Ulike, and Biolab,” Juliette Duveau, founder of The Chinese Pulse, tells Jing Daily.
Consumers aged between 18 and 30 are the main buyers of beauty devices, says Liu.
The most popular price ranges are below $70 (500 RMB) and over $4,560 (4,000 RMB). For devices priced under $280 (2,000 RMB), consumers look for deep-cleaning and absorption functions. They expect lifting and tightening results for higher-priced devices.
Given the industry boom, the government is setting up stricter supervision to regulate the market. The Center for Device Evaluation of the State Food and Drug Administration in April this year issued Guidelines for the Registration and Review of Radio Frequency Cosmetic Devices. Starting April 1, 2024, radio frequency beauty machines will be officially treated as Class III medical devices.
Dopamine and rave makeup
The end of Covid-19 lockdowns and the resumption of travel lifted netizens’ spirits. More expressive and colorful makeup styles are emerging, represented by dopamine or rainbow dressing, rave styles, and Asian Baby Girl style makeup.
WGSN’s Chua has seen a recent uptick in non-neutral colored eyeshadows and eyeliners, like greens, blues, silvers, purples, and pink.
“With concerts here to stay, I think these styles are here to say. Chinese netizens are eager to explore and try new looks that look fun,” she says.
Thanks to their affordable price points, Chinese cosmetics labels are topping the makeup sales lists across various e-commerce platforms. International names could do worse than tap into China’s viral ‘core’ trends to stay relevant with today’s beauty shoppers.
Skintellectuals
Chinese beauty shoppers are some of the most sophisticated consumers in the world. Homegrown beauty bloggers and apps have contributed to the proliferation of information about beauty, including ingredients, online, enabling domestic consumers to quickly educate themselves.
The Chinese Pulse’s Duveau tells Jing Daily that Beauty Evolution — an application that provides info on skincare product ingredients and formulas — had over 40 million users in 2022 and was ranked as the top second most popular beauty app after Xiaohongshu.
This cohort of beauty ingredients aficionados is known as cheng fen dang (成分党) in the mainland. Brands are targeting them through leveraging popular hashtags on Xiaohongshu, such as Morning C evening A (#早C晚A), which has amassed 640 million views, Nourishing skin with oil (#以油养肤) with 460 million views, and Morning Protect Evening Recover (#早P晚R) with 2.1 million views.
Chua observes new terms are emerging, like pei fang dang (配方党) and zheng ju dang (证据党.)
The former refers to looking carefully at the concentration of ingredients and pH level of products to find a suitable option, while the latter refers to consumers demanding evidence and results from skin care businesses.
“I’ve seen C-derma brands even posting a screenshot of their lab test results, while ingredients influencers post entire excerpts on Xiaohongshu analyzing ingredient lists,” she says.
Cultural and emotional marketing
On Shanghai’s Yuyuan Road, homegrown fragrance brand Documents opened a first-of-its-kind bookstore, Yuyuan Study, which curated an initial collection of nearly 200 books, each accompanied by insightful introductions for readers and a tailored fragrance. The bookstore aims to become a vibrant cultural hub by hosting a variety of events and activities that foster community engagement among those with a shared passion for literature, art, and cultural exploration.
Similarly, in celebration of International Women’s Day on March 8 this year, Australian luxury cosmetics brand Aesop presented its inaugural Women’s Library at its signature store on Dongping Road, Shanghai. The pop-up event was a hit in the city, with long queues outside the store. The hashtag Aesop Women’s Library attracted over 708,000 views on Xiaohongshu.
“In today’s highly competitive beauty market, the functions and performance of products are already on the path of a certain homogenization. The cultural and emotional experiences brands offer create the real difference and have become important reference factors for Chinese consumers,” says Duveau.
Clean beauty
By the end of 2022, global market intelligence and research agency Mintel identified 11 keywords that defined China’s beauty market, including the term ‘clean beauty.’
China ended its requirement for the animal testing of beauty products in 2021. Since then, some local names have slowly started to dip their toes in the segment, competing against international players Aesop and The Body Shop. Yet, the sector is considered highly promising by investors.
Earlier this month, Chinese beauty brand Red Chamber, positioned as a clean and sustainable cosmetics label, raised more than $1.4 million (10 million RMB) in funding from venture capitalist firm Xin Yi Capital and co-investor S’Young.
Alongside clean beauty names, traditional Chinese medicine-based products are also gaining traction. “They are generally perceived to be natural and safe, which means suitable for sensitive skin,” says Rooke.
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