Skin care segment will drive Chinese cosmetics market, RNCOS

According to its research entitled, ‘Cosmetics and Toiletries Market in China’, China provides one of the fastest growing and still untapped cosmetics and toiletries market in the world.

Skin care segment leads the way​

The skin care segment in particular, has been a key growth contributor and helped the overall industry to sustain its growth momentum.

The study identified that, a growing number of discerning Chinese consumers is driving a more diversified demand for skin care products.To meet this demand arising from different consumer segments, skin care players are introducing new products with added functionalities.

Besides moisturizers, other products like whitening formulations, toners, and anti-ageing skin care have received positive response from the consumers and shown impressive growth.

The research further revealed the skin care segment will grow at a CAGR of 12.7 per cent during the forecast period 2010-2013, having acquired a market share of 40 per cent.

Other segments like hair care, colour cosmetics, fragrances, have also experienced double digit growth over the recent years.

It is believed that the premium market sub-segments will grow in future as the cosmetics companies are increasingly targeting the young and affluent consumer segments.

RNCOS anticipate the Chinese cosmetics and toiletries market revenue will surpass $ 31 billion (€21.9 bn) by 2013. The CAGR growth projected for the market during 2010-2013 will be the highest among the major Asia-Pacific cosmetics and toiletries markets.

Opportunities for local and international companies​

The market provides opportunities to both homegrown and international players. However, international companies like P&G and L’Oreal are currently leading.

According to the study these companies are responsible for generating the majority of industry revenue and are preferred by the consumers over the local companies.

Strong and wide product lines along with aggressive marketing strategies have been considered the success mantra proactively adopted by these international cosmetics giants.

Although the Chinese cosmetics market has become highly competitive, RNCOS suggests there is still a plenty of room for new entrants provided they adopt appropriate market entry strategies, find right manufacturing or distribution partners, use effective marketing strategies, and make suitable products for various customer groups at reasonable price points.