Personal Care and Cosmetics

Broadly speaking, cosmetics include personal care products and cosmetics (makeup products). Cosmetics in a narrow sense only refer to makeup products. Personal care products include skin care products, hair care products, toothpastes, perfumes, sunscreens, antiperspirants, dilatory screams and shaving screams. In 2016, there were 2,000-3,000 producers of personal care products in China and the personal care products market reached RMB 250.0 billion. In terms of market share, skin care products held a share of 50-60% and hair care products held a share of 20-25%. Foreign brands seized 60% of the market share. Specifically, Procter& Gamble (P&G), L’Oreal and Unilever occupied about 30% of the market share.

Marketing channels of personal care products have experienced evident changes in recent years. The proportion of online sales has already reached one fourth of the total. E-commerce has brought more choices to users. In offline channels, the proportion of small supermarkets and cosmetics franchised stores increased to 50%. The makeup products market is RMB 30-40 billion. Franchised stores sell the highest amount of makeup products (50-60% of the total), however, their market share is dwindling. On the contrary, the market share of online channels has grown over the years (>20%). Skin care products, hair care products, mouth care products, bath products and makeup products altogether hold a market share of 90%.

The consumption of personal care products and cosmetics features strong individualization. People in different races, ages, incomes, consumption concepts and psychological needs can all have different consumption demands. A few large enterprises are unable to satisfy all these needs. Medium and small enterprises therefore can also survive and thrive on some niche market. For years China has witnessed the coexistence of strong high-end big brands and high-quality individualized medium/small brands in the personal care and cosmetics market.

With impact from various factors such as the upgrading of consumption, the change of consumption habits, the increase of core consumption groups, the enhancement of consumption concept and the diversification of marketing channels caused by the change of population structure and the increase of income, the cosmetics sector in China will maintain a stable growth momentum in next few years. The market growth in the coming years will be basically kept at the level of previous years.

Driven by the market demand of personal care products and cosmetics, the development of raw materials for personal care products and cosmetics will also maintain the same speed. Raw materials for personal care products and cosmetics can be mainly classified by function into humidifiers, surfactants, thickeners, pigments, fillers, preservatives, flavors and sunscreen chemicals, totaling over a dozen categories. The market of raw materials for personal care products and cosmetics in China will increase rapidly in the next 5 years and the growth will be much higher than the global growth. The growth of sunscreen chemicals and pigments will be even higher. Major factors promoting the development of these products mainly include factors in demand (products derived from nature, health, safety), factors in technology (new products, new functions, multi-functions) and factors in enterprise operations (cost control, etc.).