Cosmetics drive surge in China advertising

Related tags Mainland china

Campaigns for cosmetic and toiletry products are leading a major
surge in advertising expenditure in China, latest research
information shows. The findings reflect the continued growth and
investment in an industry hotly tipped for major growth in the
coming years.

Cosmetics and Toiletries came in first in the Top 5 advertising categories in 2004, behind Foodstuff, Pharmaceuticals, Retail & Services and Real Estate. The Cosmetics & Toiletries category saw an advertising spend of $ 4,822 million, an increase of 34 per cent compared with the same period in 2003.

Among the top 10 brands, 5 brands belonged to P&G. The No.1 brand in 2004, Oil of Olay - ranked No. 5 in 2003 - spent US$ 565.8 million on advertising, a 160 per cent increase from 2003.

Currently the market for cosmetics in China is valued at €3 billion, but with GDP running at over 8 per cent annually and consumer sales following very strong growth patterns, industry analysts estimate that this figure could increase ten-fold by the year 2010.

Looking at the wider picture, total advertising expenditure for tv and print media in 2004 for the Greater China region amounted to $43,159 million, according to CTR Market Research - an increase of nearly 25 per cent compared with $34,627 in 2003.

Breaking the figures down on regional basis, CTR showed that advertising expenditure in the Mainland 2004 grew by 25 per cent in 2004 to reach $23,316 million.

In the Greater China Region, Mainland China advertising spend accounted for 54 per cent of the market, with Hong Kong and Taiwan accounting for 11 per cent and 35 per cent respectively.

"The results confirm our double digit growth predictions in early 2004, and reflect strong economic development in the region,"​ Tian Tao, deputy general ,anager of CTR said, The trend was slightly altered in the more developed Hong Kong market, where the the top 3 advertising industries in 2004 were Toiletries & Household, Banking & Investment Service, Cosmetics & Skincare. McDonald's, HSBC and PCCW were the top 3 brands.

The market for cosmetics and toiletries in Hong Kong is far more developed and has always been more focused on business and financial services, a fact that has been historically reflected in advertising expenditure. However, the overall figures reflects the rebounding fortunes of the market, as it slowly pulls out of a slump that has characterized the previous few years.

Jennifer Ma, the Director of Sales & Marketing of admanGo said, "The HK economy experienced a significant rebound in 2004, with visible fortunes generated by CEPA, relaxed travel restrictions for mainland visitors to HK and the resumption of government land sales. The local advertising market therefore flourished to achieve more market gains which are expected to continue in 2005."

Although the Taiwan market reported a 27 per cent increasing in advertising expenditure in 2004 to reach, growth, the cosmetics and toiletries category did not feature in the top five, where real estate, automobile and financial institution dominated.