Interview, Fireside Chat
The Rise of Chinese Beauty Brands
- The Chinese cosmetics market is projected to maintain its status as the fastest-growing sector, having achieved a 20% CAGR over the preceding three years.
- Local Chinese brands are expected to double the size of the already world's largest cosmetics market, driven significantly by the post-90s consumer cohort.
- Premiumization is anticipated to continue gaining market share annually, though at a reduced rate of approximately 1 percentage point per year over the next six years, targeting a 53% market share by 2025.
- The growth trajectory for premiumization will likely decelerate from the 3% to 4% annual gains observed since 2015.
- Multinational competitors currently maintain a lead in the premium segment, a gap local brands are not expected to close instantaneously due to the time required for brand investment.
- Local Chinese brands are expected to focus their primary growth opportunities within the mass segment, with projections indicating potential market share gains to 80% or 90%, comparable to benchmarks set by Japan and South Korea.
- Consumers in lower-tier cities and small towns are expected to increase spending to approximately $230 annually, matching the expenditure levels of peers in tier-one and tier-two cities.
- Digital proficiency is becoming a mandatory requirement for beauty brands across all segments to effectively engage consumers and maintain momentum.
- To sustain growth, brands are expected to strategically select platforms, collaborate with appropriate KOLs, and master live streaming capabilities.
- Demand for lip products experienced a temporary decline but has shown a strong recovery since June.