How hand sanitizer became prevalent in China

Chinese, like westerners, normally use soap to wash hands. However, due to the higher awareness of viruses and bacteria after SARS, Chinese consumers became interested in products that kill viruses. Now, hand sanitizer is commonplace in people’s homes and the public.

Hand sanitizer has been popular in China since the SARS outbreak

Sohu Business reported that people preferred to use soap to wash hands instead of hand sanitizer before SARS. Market research conducted in Beijing, Tianjin, and Wuhan presented that only 47.2% of participants had everheard hand sanitizer before SARS. Most of them were young people. Due to the outbreak of SARS in 2003, the hand sanitizer market in China started to be prominent. All hand sanitizer brands sold their products well. Especially, antibacterial hand sanitizer was attractive. After SARS, the concept of disinfection stayed in people’s minds. People were used to washing hands often. Although hand sanitizer’s sales cannot compare with the purchases during the SARS, the hand sanitizer market in China still performed well.

Prospering hand sanitizer brands in China

IiMedia Ranking issued its top 15 hand sanitizer brands in China in 2020. Dettol is the top hand sanitizer brand in China, but foreign brands do not have majority market share. Only four of them are foreign hand sanitizer brands, and the other 11 are domestic brands. These domestic hand sanitizer brands do not focus on hand sanitizer production and sales. They are usually well-known for cleaning products or disinfection supplies, and hand sanitizer is only one of their production lines. Bluemoon is famous for its laundry detergent in China, and its hand sanitizer sells well because of the brand reputation.

[Source: IiMedia “Top 15 Hand Sanitizer Brands in China 2020”]

Hand sanitizer market in China under the Coronavirus outbreak

The COVID-19 pandemic sparked Chinese interest in hand sanitizer. According to the Baidu index, the search volume of hand sanitizer showed a sharp spike when Coronavirus broke out.

[Source: Baidu Index “Attention on hand sanitizer had a sudden rise in China. Note that 洗手液 (xishouye) is commonly used for both hand sanitizer and hand soap”]

Demand for hand sanitizer soared during the epidemic in China

In this special period, medical experts suggested people wash hands often, causing the demand for hand sanitizer to rise. Suning unveiled that its sales of hand sanitizer surged by 2,315% over the same period last year. Taobao’s sales of hand sanitizer during the pandemic also rose over ten times than before the Spring Festival. Panicked people stockpiled lots of hand sanitizer at home. In a few days, hand sanitizer sold out in all channels. Meanwhile, due to virus control, the slow distribution made people could not get hand sanitizer in time. In various social platforms like Weibo, many people complained that they could not get any hand sanitizer.

[Source: Weibo “People cannot get hand sanitizer during the epidemic”]

How the government and enterprises reacted to increasing demand in the hand sanitizer market in China

Increasing demand resulted in price gouging. Moojing reported that the cost of hand sanitizer increased by 30% over the same period last year in China. Thus, the government declared to control the prices. During the pandemic prevention and control period, the government forbade sellers from driving the price up. Otherwise, authorities would punish the sellers who increased prices. Many companies promised that they would not rise in their prices to fight against the virus.

In addition, many companies opened up new hand sanitizer production lines to support hand sanitizer supplies. National Health Commission   hand sanitizer to appear on the market once passing the examination and complement records later. National Medical Products Administration presents  that over 700 records of new hand sanitizer products popped up since the outbreak. One leaf, CHANDO are popular skincare brands in China and started to produce hand sanitizer during the pandemic. Amounts of hand sanitizer eased the shortfall. Now, it is easy for people to buy hand sanitizer.

[Source: NMPA “More than 700 new records of hand sanitizer products since the Coronavirus outbreak”]

Evaluations of hand sanitizer are trendy in media

As hand sanitizer became a popular topic since the virus outbreak, more self-media utilized this hot topic to attract views. In Weibo, the hashtag, hand sanitizer evaluations, generated over 360 thousand views. You can also watch hand sanitizer evaluation videos on Bilibili. Phoenix Lab’s video, Ten Regular Hand Sanitizer Evaluation, brought about almost 60 thousand views and 1,077 shares. These evaluations offer scientific knowledge to find the most suitable hand sanitizer for themselves and boost these media’s popularity. It also becomes a tool for merchants to promote their hand sanitizer.

[Source: Bilibili “Ten Regular Hand Sanitizer Evaluation”]

Chinese attitudes towards disposable hand sanitizer has changed

People did not accept disposable hand sanitizer in the past, for it was strange to wash hands without water. Meanwhile, soap was prevalent in China as a cleaning product and cheaper than disposable hand sanitizer. Experts also mentioned that disposable hand sanitizer could not replace common hand soap. Thus, few people chose to buy disposable hand sanitizer. As Coronavirus broke out, people had to pay attention to disinfecting while outside. Disposable hand sanitizer is easy to sterilize and makes are convenient to take outside. Therefore, disposable hand sanitizer acquired substantial attention. According to Data Iceberg, the market shares of disposable hand sanitizer increased by 13.5% in the 2020 Spring Festival. Disposable hand sanitizer occupied 85.4% market shares, and standard hand sanitizer held 14.6% market shares in this Spring Festival.

Hand sanitizer becomes a necessity when traveling

Since the quarantine ended, we cannot let our guard down. On April 29th, CCTV news released a blog to call for people to take hand sanitizer when traveling. Abounding merchants launched small packs of hand sanitizer for travelers’ convenience. Disposable hand sanitizer also benefits people when they cannot get access to water.

[Source: Weibo “Four necessary things when traveling”]

Seize the opportunities from the time

The hand sanitizer market in China gained significant development due to the technological progress and the opportunities in the era. It started from a common hand sanitizer and developed many new products like disposable hand sanitizer. Hand sanitizer made great contributions to fight against the epidemic. However, the hand sanitizer market in China showed poor recognition of brands. Although many brands sold well during the pandemic, most of them did not form brand recognition. Companies could seize great opportunities from the time to promote their brands.

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The building materials market in China

The building materials market in China refers to the materials used as exterior and interior decorations for public buildings. The rapid growth of this sector is mainly due to the macro environment and the government polices.

 [Data source: qianzhan, Output and YoY Growth of the Building Materials Market in China]

The total output of the building materials market in China was ¥ 3.94 trillion rmb in 2017. This  represents an increase of 280 billon from 2016 and a growth rate of 7.65%.

[Data source: qianzhan.com, The proportion of sector output within the decoration market.]

Overall, the growth of the building materials market exceeds the growth of the home-decorating market. However, the growth of the two sectors is gradually balancing out. While in 2017 the building materials market occupied around 52% of the total output of the decoration market in China, the home-decorating market occupied around 48%. Furthermore, the continued expansion of the building materials market in China may imply that China is still at the stage that requires the implementation of basic infrastructure and public facilities.

The home-decorating market in China

The home-decorating market in China refers to the interior decorations of residential houses.

[Data source: qianzhan.com, Market scale of home-decorating market in China]

The continuous growth of real estates sales and of the Chinese economy provide the foundation for the home-decorating market to further grow. The market scale had reached ¥2.23 trillion rmb in 2018, and is estimated to exceed over ¥2.59 trillion rmb by 2020.

[Data source: qianzhan.com, Percentage of different home-decorating in China, by type]

Newly purchased homes are the main driver of the home-decoration market in China. Nearly 73% of the total revenue is contributed by new home decoration.

[Data source: qianzhan.com, Consumers of home-decorating market in China]

The main consumers of the home-decorating market are millennials, which are those born during the 80s and 90s. They contribute to more than 60% of the market revenue. Those born in the 70’s are also a large consumer group at 16%, while the remaining 22% other ages.

The rise of the E-commerce home-decorating market

E-commerce home-decorating market in China boomed in 2015, which has become the key contributor to and further intensified the competition within the overall decoration market in China.

[Data source: ebrun, Market scale and growth of E-commerce home-decorating market in China]

The market scale of the E-commerce home-decorating market in China reached ¥258.9 billon rmb and achieved a 36% growth rate in 2018. Nonetheless, it is currently experiencing a bottleneck period with less than 5% penetration rate. This rate is fairly low when compared to other E-commerce markets such as car-hailing platforms and online travel agencies with around 1/3 penetration rate.

E-commerce ,  helps address the non-equilibrium profit margins that lie within traditional home-decorating market. E-commerce home-decor companies standardize decoration methods, prices, and simplify the working procedure. However, many consumers believe the materials and the user experience of E-commerce decoration companies are too expensive for the quality. As e-commerce does not always offer acceptable after service provision, many consumers are switching back to traditional of home-decoration methods.

Consumers are constantly pushing for transparency and information symmetry. The future of the E-commerce decoration market will no longer be on price wars, but quality and value wars.

Decoration companies in China

[Data source: qianzhan.com, Number of firms within the Chinese decoration market]

The market share of Chinese decoration market is fairly scattered. Around 82% are traditional decorating companies and around 18% are E-commerce home-decorating companies. There is currently a large amount of small to mid-sized decoration firms in China. The market scale is huge with fairly low entry barrier. Although, the total amount of firms within the industry experienced a decrease of 2.22% from 2015 to 2016, the total output had increased by ¥0.277 trillion rmb. This may suggest that the market share has became concentrated as regulations imposed on the Chinese decoration market gradually standardize.

A huge market with hundreds and millions of small businesses

Over 70% companies within the Chinese decoration market achieved revenue growth in the first half year of 2018. Gold Mantis (金螳螂) achieved top revenue gain of ¥10.904 billion rmb and China Red Star (红星美凯龙) was ranked at second place with ¥6.374 billion rmb revenue. The top three players within the home-decorating market are, listed in order; Gold Mantis, China Red Star and Oppe In (欧派家居).

[Source: ebrun Market share of E-commerce home-decorating market in China]

On the other hand, E-commerce home-decorating market is concentrated. To8to.com (土巴兔) occupied around 40% of the total market share, and Jia.com around 27%.

Although the overall market is fairly competitive, it has not yet reached the mature stage. This means that there is still a large room for small firms to develop along with the expansion of medium to large-sized firms.

Opportunities in the Chinese decoration market

Aesthetic home-decoration market in China

Currently, the decoration products in China are rather homogenous. However, consumers are gradually valuing creativity, quality and environmental aspects of decoration products as their living standards improve and consumption upgrades. The aesthetic home-decoration market in China may be the answer to consumers’ concerns. It refers to the mid- to high-end furniture brands with good designs and quality products. Firms have began implementing strategies to target luxury consumers by offering environmental friendly materials, customized product design, and foreign luxury brands.

Standardized regulation across the decoration market

As regulations imposed upon the Chinese decoration market become more standardized, the industry is expected to become more concentrated. Comparing to the current market environment with mixed standards, quality and prices, the future expectation for the market will center around transparency and price equilibrium. For E-commerce home-decorating, focusing more on after-sales provision and product quality allows room for future development.

Smart home is the new go-to for modern Chinese households

Smart home stores in China offer Chinese consumers a new form of experience. Many sellers of intelligent home technologies seek to introduce their products to potential consumers through such experiences. Examples of smart home technologies include automatic adjusting lights and Homepod etc. The smart home stores in China allow consumer to touch, test and experience the products in real person. A direct-to-customer strategy by engaging customers through these brick-and-mortar stores. Smart home technology is definitely a future trend that decoration or furniture companies need to consider.

The decoration market in China has a large potential to further grow in the near future. However, the development needs more funding and more creative and quality products.

Author: Chenyi Lyu

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Although the Chinese household cleaning market for basic merchandise is quite saturated and a couple of oligopolies occupy a majority of the market share. However, there is still plenty of room on the Chinese market for diverse international brands of cleaning products. Since many Chinese families are used to doing daily cleaning tasks manually, the market penetration of many electrical appliances is still relatively low compared to the western market – e.g. vacuum cleaner.

Chinese household-care-products market is an oligopoly market: Liby (立白), Nice Group (纳爱斯集团), Unilever (联合利华), SC Johnson (庄臣) and P&G (宝洁) contribute over 50% of whole market share.

The retail sales volume of vacuum cleaners on the Chinese market is increasing and the market demands will keep growing in the next few years.

Lower-tier cities in China still have room for market growth

“The main difference between tier-1 and lower-tier cities’ cleaning products consumption is the fragmented usage for different household cleaning tasks in most urbanized areas, while in more rural areas, consumers tend to utilize one dedicated product in a multi-purpose way.” Says Thibaud Andre, research director of Daxue Consulting. The income gap is still huge in China, while consumers living in tier-1 cities are keeping up with the pace of international cleaning products market, consumers from lower-tier cities are still at a primary stage of household cleaning. Although the per capita disposable income of Chinese rural residents is still low, it has increased around 40% from 2013 to 2017. With the household earnings going upwards, consumers from lower-tier cities will also hold stronger purchasing power for expanded household cleaning products. That makes them a huge potential consumer base for international household cleaning brands.

Chinese consumers are getting more health-aware: Health~ and Eco-friendliness trends

Product-safety awareness among Chinese consumers is getting higher. Concerns about daily chemical products, like cleaning detergents are especially prominent. As we can see on Baidu index, almost all highly related terms of searching phrase “dishwasher detergent” are about safety issues like: “Harm” and “Harms of detergent to the human body”. Other related terms are e.g. “ingredients of detergent” and “brands with the safest detergent”.

There is also a higher demand for a child (baby)-specific cleaning products, e.g. bottle cleanser, as more parents are willing to spend their income on taking care of later generations.

Household cleaning appliances market still has huge potential for international brands

Home electrical appliances like ovens and dishwashers were not visible in normal Chinese households until a recent couple of years. As the quality of life increasing, more and more Chinese consumers are searching for labor-saving devices to relief them from chores. But appliance like a dishwasher, which is standard in western households, are still not common in China. What is holding this back? From the questions on Zhihu, China’s biggest question-answer platform, we can see that the interest is high. However, Chinese consumers are still determining if it’s useful for their households.

On Zhihu, the question was: “Are dishwashers overrated?” This answer on Zhihu got much attention (4.7K thumbs up and 1K comments). In the answer, a German brand has been recommended.

Several similar questions on Zhihu: “Is household dishwasher helpful?”, “Is dishwasher useful and suitable for Chinese family?”

Expected Sales of Dishwasher on Chinese Market 2017-2020

Along with the increasing sales revenue of dishwashers on the Chinese market, related products like cleansing tabs and cleansing powder also offer a huge opportunity for international household cleaning brands.

The same applies to products like oven cleaners, as ovens are becoming more popular in China, the demand for cleaning products for the oven will also be on an upward climb. Yet there are not many domestic brands on the Chinese market for oven cleaners. On Tmall most dedicated oven cleaner products are from western brands.

Chinese households are using high-end/automated cleaning appliances

Growing hygiene and health concerns coupled with automated and quick cleaning solutions have driven the household cleaning appliances industry. For example, improved standards of living and rising urban population in China is supporting the growth of household vacuum cleaners market. At the same time, Chinese consumers have driven the demand for technologically advanced products.

Looking at the high-end household electrical appliance like Dyson vacuum cleaner on Baidu index, the searching frequency of last three years has grown approximately five-fold.

Dyson vacuum cleaner

Dyson V10 wireless vacuum cleaner on Tmall

Dyson, Haier, Bissell, and Panasonic are some of the big players on the Chinese market. However, Chinese consumers are constantly searching for high-performance and more cost-effective products. Different brands are responding to consumers by incorporating new features such as robotic operation and bag-less technology. Xiaomi is a prominent competitor on the Chinese market, whose household vacuum cleaner robot has got huge success with its high performance-cost-ratio.

Xiaomi vacuum cleaner robot

E-reputation plays a crucial role in the brands’ development in China: Using Chinese social media to engage with consumers

“Brand reputation has a stronger impact on household cleaning category purchase in China than in European markets. The word-of-mouth and e-reputation play crucial roles in the development of a brand.” Says Thibaud Andre. On the most popular social media platforms in China (Weibo and WeChat), posts about household cleaner mainly consist of brand/product recommendations and their usage. Among those posts, international brands are more popular than domestic ones. For example, the following post recommended Italian brand Chante Clair’s and its degreaser cleaner by a Chinese lifestyle KOL, who owns 94,910 followers on Weibo. On this post, she described how she utilized the cleaner and successfully removed the stain on the floor, which never came off no matter what products she used in the past.

Italian brand Chante Clair’s was recommended by a Chinese lifestyle KOL on Weibo

Combination of Online and Offline is becoming the main purchasing method

In China, offline shops are still crucial for most traditional household cleaning products. Over 90% of consumers choose supermarkets as one of their offline channels to purchase household cleaning products in 2018. Convenient stores and department stores are also important purchasing locations for Chinese consumers. Yet things are a little bit different when it comes to some household electrical appliance like the vacuum cleaner. In 2017, online channels have exceeded offline stores for vacuum cleaners in China by far (63% purchased online vs. 37% offline).

E-commerce platforms like Tmall and JD are important distribution channels for most household cleaning brands (international and domestic). While Tmall is primarily for building official online shops and has a better price, JD is famous for its more competitive logistic which promises next-day delivery even for remote areas in China like Qinghai and Gansu. DJ also offers fixed-time delivery which Tmall does not. Yet dedicated website hasn’t been considered as an online retail distribution channel for most household cleaning brands.

“The setup and allocation of investment in their distribution network will probably be crucial for cleaning brands in the years to come. They should especially remain aware of new channels changing the market, such as Pinduoduo a few months ago in lower-tier cities.” Says Thibaud Andre, research director of Daxue consulting. Besides the most popular platforms like Taobao and Jingdong (JD), there are many other less-known e-commerce platforms ones which international players can leverage.

Chinese household cleaning market provides the chance for international companies to develop their brands

The Chinese household cleaning products market has a rapid growth pace and has plenty room for international companies to develop their brands for following reasons: 1) The improving living standard and fast pace of life in urban areas make Chinese consumers demanding more efficient and more convenient cleaning products. 2) Consumers from lower-tier cities are still at a primary stage of household cleaning while their per capita disposable income has significantly increased and will hold stronger purchasing power for expanded household cleaning products. 3) Many kinds of household cleaning appliances still have relatively low market penetration in China, thus have huge potential for international brands. 4) Chinese consumers are demanding more and more high-end cleaning products, according to Euromonitor International: Premium-positioned products claim a faster pace of growth over mass offerings in China.

What international cleaning products companies should pay attention to is first of all: e-reputation plays a more crucial role in the development of a brand in China than in the West. International brands have to use Chinese social media to reach and engage with consumers. Another important point to keep in mind for entering Chinese market is that both online and offline distribution channels are not to be neglected: while big supermarkets are still the most common location to purchase traditional cleaning products for Chinese consumers, some products like vacuum cleaner have a much bigger sales revenue share through online channels.

Author: Chencen Zhu

Daxue Consulting can help with the analysis of any market in China, including the household cleaning products market

Daxue Consulting, as a market research company, provides the adapted data in one of the most challenging markets in the world, China.  We have a wide range of services to deliver a competitive market research. To know more about the household cleaning market in China, do not hesitate to contact our project managers at dx@daxueconsulting.com.

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