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In 2011, East China continued to see huge development in beauty and personal care industry in China. Although the global economy seemed and the stock market were performing poorly, it did not affect the beauty and personal care market in East China. Consumers in East China put a lot of care into their appearances, and most beauty and personal care products are experiencing double digit growth in the region. Since it is relatively more developed than other districts of China, mainstream brands like Biotherm(碧欧泉), Lancôme(兰蔻), L’Oreal Paris(巴黎欧莱雅), Givenchy(纪梵希), Garnier(卡尼尔), Olay(玉兰油), Clinique(倩碧), Aupers(欧珀莱) and Chanel(香奈儿) have already developed their brand reputations, and gained much consumer recognition. They constantly launch new products to cater to the changing taste of Chinese consumers.

Since there are expectations for higher inflation in the near future, Chinese consumers must become more careful when making purchasing decisions. They need to pay more attention to the cost performance of products. People are paying more attention to brands and are generally willing to pay higher prices for the ensured quality of big brands. Products of big brands like Estée Lauder(雅诗兰黛) are universally welcomed by consumers in East China.

The retailing for beauty and personal care products take different forms in East China. Supermarkets and hypermarkets are the biggest retailing channel for brands like Maybelline New York(美宝莲纽约). Drugstores are also a big channel of sales, but the main distribution channel for cosmetics companies is department stores where it is convenient for market players to enhance their brand image.

Prospects

The beauty and personal care industry in East China is expected to continue to undergo fast development. The major group of consumers is comprised of those born in the 1980s, which are expected to have mid to high income, and are attentive to the world’s fashion trends. Their preference for high quality products will help facilitate the growth of big foreign brands with reputable names.

Advanced products that show quick results is also expected to gain popularity quicker than the overall cosmetics industry. Consumers want to see relatively fast effects of functional products. Thus, market players need to develop more multi-functional products to cater to various consumer needs.

The competition between beauty and personal care product retailers is expected to intensify. Wastons, Sephora, Sasa and other health and beauty specialist retailers have all launched plans to expand, covering some lower tier cities in East China. Also, internet retailing will continue to develop at a tremendous speed further facilitating the growth of the Chinese cosmetics market.

Daxue Consultant China

Sources:

• Euromonitor International
• PDF on Chinese Cosmetics Market
• Export.gov
• The Wall Street Journal

Credit Photo: Nipic