Cosmetic players like Estee Lauder, Mary Kay and Shiseido continue to make expansion plans in China despite the market growing at a slower pace than in previous years.
China is still a lucrative market with retail sales of cosmetics in China rising to 16.5% in the first 10 months of the year, totaling 107.7 billion yuan ($17.3 billion), compared with the same period last year.
Estee Lauder, which sells 12 of its 28 cosmetic brands in China, is arguably making the biggest splash among those multinationals, having launched 'Osiao', which caters to Chinese consumers.
"China has become the company's third largest market following the United States and Britain with a turnover of $500 million in the 2012 fiscal year that ended June 30," said Fabrice. Weber, president of Estee Lauder's Asia-Pacific division, in an interview with 21st Century Business Herald.
Since setting up a Shanghai office in 2002, Estee products have been sold in around 60 Chinese cities.
However, the success of local beauty is on the rise and giving international players a run for their money of late, forcing brands like Garnier and Revlon to pull out of the country this year.
China to take over as the world’s largest economy in Purchasing Power Parity
China is likely to overtake the US to become the world’s largest economy in Purchasing Power Parity, an economic milestone according to Euromonitor.
As two of the world’s largest manufacturers, China and the States lead in global energy consumption and pollution, with China overtaking it in 2010 to become the world’s biggest energy consumer.
China is also predicted to knock Germany off the top spot in 2017 to become the largest outbound source market with 105 million outbound trips.
According to the market researcher, by 2018, the US beauty per capita spending is expected to increase to US$240, approximately five times higher than China’s projected per capita spending of US$50.