The latest figures for the market, put its value at RMB 172.47, which represented growth of 12.3%, compared to the value in 2013, according to data extracted from the China Cosmetics Market Report, 2014 – 2017, offered by Market Reports.
Although it is still and extraordinary growth rate that is one of the biggest in the world, it is still down on the breakneck pace of previous years, and actually represents the lowest rate since 2005.
Grow rate set to remain steady
But looking to the future, the researchers believe that the pace of growth is set now on a more steady path, and is expected to remain around the pace recorded in 2014, for the next few years.
According to the study, that growth rate in the three years up to 2017 will register an additional CAGR of 12.46% to reach a total value of RMB245.3bn.
The figure underlines how the market is still expanding in tier two and three cities and urban environment, while also underlying how it is now showing distinct signs of maturing in the major urban centres, specifically Beijing and Shanghai.
Continued increase in demand and expanded market
The report also highlights how the continued pursuit of beauty customers, expanding marketing networks across the county, and increasing demand in the smaller cities is all likely to buoy growth in the next few years.
Looking at the different categories, skin care will remain by far the dominant part of the industry, having accounted for 61.2% of total sales in 2013, while skin care accounted for 48%, with men’s skin care accounting for just 4.6% of this total.
Many marketers and analysts have been hotly tipping men’s skin care as an area of potential growth in the coming years, which is underlined by the current shortfall in male participation.
Watch out foreign companies
Until now foreign companies have made a huge impact on the growth of the cosmetics market in China, but as domestic players start to grow in sophistication, that trend could be set for a serious shake up.
Underlining this trend is the fact that L’Oreal, which is still by far the biggest cosmetics company in the world, registered a year-on-year rise in its China sales in 2014 of just 2.3%.