Ally Dai, Freelance Writer12.19.22
Melancholy is the mood of consumers in the world’s No. 2 beauty market.
Clearly, in China’s beauty market nowadays, the sentiment is anything but upbeat. Compared to a 26.6% increase in 2021, retail sales of cosmetics for the first nine months of 2022 fell 2.5% to about $38.7 billion. That’s the worst performance in the past decade, according to the latest figures from the National Statistics Bureau. And the impact has also been felt during this year’s Double 11 Shopping Extravaganza.
According to Syntun, a third-party digital retail data provider, for this year’s Double 11 (from 8pm on October 31 to 11:59pm on November 11), the GMV of the major e-commerce platforms (including traditional and live-streaming ones) was estimated to be $155 billion. In terms of sales, personal care and cosmetics lagged household appliances, mobile phones and digital devices, and apparel. Skincare sales exceeded $8.4 billion. Fragrance and makeup sales totaled $3.0 billion.
Across the leading e-commerce platforms (Tmall and JD) and content-sharing ones (Douyin and Kuaishou), Austin Li still tops the list of best performing live-streamers. The top 10 best-selling beauty brands lists are similar in Tmall and Douyin (the Chinese version of TikTok), where the big international names dominate. A few domestic ones making the lists include Proya by Proya Cosmetics, Winona by Botany, Chando by Jala, and MedRepair and QuadHA of Bloomage BioTechnology in skin care, and Florasis by Yige Beauty, and Zhuben by Shucai Network Technology in makeup.
By product category, facial masks, serums and medicated skincare outperformed the rest, and the former two are led by the domestic players. The SKUs in these lists include Winona’s Soothing Repairing Freeze-Dried Mask, and Inoherb’s Gentiana Repairing Freeze-Dried Essential Mask, as well as Quadha’s Superior Antioxidant Concentrated Essence and Proya Elastic Brightening Youth Essence. If best-selling lists expand from Top 10 to Top 20, we can find the rising proportion of domestic brands, with Douyin a more popular destination than Tmall.
Actually, scent-based remedies or aromatherapy have been actively pursued for years by consumers with a commonsense belief that scents can improve mental and physical wellbeing. Perfume and fragrance product sales overtook makeup expenditures last year, thanks largely to increasing self-pampering and health awareness among young people. For perfume and fragrance, Alibaba reported that the sales on its platforms grew over 20% since May 2020. And various market research companies also forecast double-digit growth for this sector in coming years, like a CAGR of 17% with sales reaching $2.14 billion by 2025, according to Mintel.
Apart from soaring sales of traditional perfume and fragrance, the market is also witnessing a rapid rise in fragranced products featuring mood-enhancing scents, that are often based on aromatherapy or contain essential oils. This newly broadened subcategory ranges from personal care to household care products, be it fragranced facial/hair/body care and oral care, to fabric care and home care. It all taps into the consumers’ craving for something that could improve their wellbeing through olfactory experiences—dubbed the “olfactory economy” in China.
On the flip side, an increasing number of skin care brands are doubling down on efforts to enter the subcategory of fragranced skin care products, essentially using scents as a differentiating factor. Some notable examples include Zhuben in makeup cleanser and Little Dream Garden in body care, all prioritizing the scent experiences and winning in this year’s Double 11 skin care category.
Another interesting example is Procter & Gamble’s Safeguard soap. The brand debuted its first perfume in its local online store in September. This limited edition reportedly features a signature scent of the brand’s best-selling soap and body wash in China, so-called “pure white” or “the scent of protection.” The launch is a marketing campaign to celebrate the brand’s 30th anniversary, but it is also viewed as a test to see if this approach has promise.
Increasingly viewed as a new growth area in China, it is getting better at tapping into the local consumers’ strong quest for emotional benefits, with innovative scents often with local twists like the notes of Osmanthus, as well as the help of technological advancements enabling the quantitative measurement of subjective feelings, and immersive interactions and digital engagement.
Ally Dai
Freelance Writer
allisondai@126.com
allydai73@gmail.com
Ally Dai is a freelance writer/independent consultant based in Shanghai. She has covered the beauty industry for more than 15 years. Previously a senior editor and industry researcher, she now works on content creation with publishing houses, event organizers and PR companies in the personal care and life science industries.
Clearly, in China’s beauty market nowadays, the sentiment is anything but upbeat. Compared to a 26.6% increase in 2021, retail sales of cosmetics for the first nine months of 2022 fell 2.5% to about $38.7 billion. That’s the worst performance in the past decade, according to the latest figures from the National Statistics Bureau. And the impact has also been felt during this year’s Double 11 Shopping Extravaganza.
A Double 11 Downer
In sharp contrast with previous feverish growth, 2022 China Double 11 cooled considerably in its 14th year. Unlike in years past, there were no heavy promotions, no live gala ceremonies and no Gross Merchandise Volume (GMV) results proudly announced by Alibaba and JD.com, two e-commerce giants. Here’s a quick recap of limited sales information published so far.According to Syntun, a third-party digital retail data provider, for this year’s Double 11 (from 8pm on October 31 to 11:59pm on November 11), the GMV of the major e-commerce platforms (including traditional and live-streaming ones) was estimated to be $155 billion. In terms of sales, personal care and cosmetics lagged household appliances, mobile phones and digital devices, and apparel. Skincare sales exceeded $8.4 billion. Fragrance and makeup sales totaled $3.0 billion.
Across the leading e-commerce platforms (Tmall and JD) and content-sharing ones (Douyin and Kuaishou), Austin Li still tops the list of best performing live-streamers. The top 10 best-selling beauty brands lists are similar in Tmall and Douyin (the Chinese version of TikTok), where the big international names dominate. A few domestic ones making the lists include Proya by Proya Cosmetics, Winona by Botany, Chando by Jala, and MedRepair and QuadHA of Bloomage BioTechnology in skin care, and Florasis by Yige Beauty, and Zhuben by Shucai Network Technology in makeup.
By product category, facial masks, serums and medicated skincare outperformed the rest, and the former two are led by the domestic players. The SKUs in these lists include Winona’s Soothing Repairing Freeze-Dried Mask, and Inoherb’s Gentiana Repairing Freeze-Dried Essential Mask, as well as Quadha’s Superior Antioxidant Concentrated Essence and Proya Elastic Brightening Youth Essence. If best-selling lists expand from Top 10 to Top 20, we can find the rising proportion of domestic brands, with Douyin a more popular destination than Tmall.
A Lackluster Year
Overall, “lackluster” is the word that best describes China’s beauty market performance during the past year. This is somehow expected under the recent covid policy which largely led to logistic and supply chain disruptions, as well as depressed consumer sentiment and a shift in buying priorities. Still, some reports argue for the market resilience by describing it as “maturing.” Commenting on the sales performance for this Double 11 in a positive tone, both Alibaba and JD stressed the need to think more about the offline economy, and better service and consumer experience.Scent lifts Mood
Experience is a buzzword for retailers and brands. Experience is an effective way to attract and retain the consumers. In the wake of the pandemic, especially under increasing mental stress caused by the recent strict lockdowns across China, people’s desire for mood enhancers or pleasure is running high. They want products that boost the mood with a holistic approach; i.e., reinforcing sensory experiences with visual, tactile, olfactory and even audio elements. Scent is a leading sensory experience in beauty and personal care.Actually, scent-based remedies or aromatherapy have been actively pursued for years by consumers with a commonsense belief that scents can improve mental and physical wellbeing. Perfume and fragrance product sales overtook makeup expenditures last year, thanks largely to increasing self-pampering and health awareness among young people. For perfume and fragrance, Alibaba reported that the sales on its platforms grew over 20% since May 2020. And various market research companies also forecast double-digit growth for this sector in coming years, like a CAGR of 17% with sales reaching $2.14 billion by 2025, according to Mintel.
Apart from soaring sales of traditional perfume and fragrance, the market is also witnessing a rapid rise in fragranced products featuring mood-enhancing scents, that are often based on aromatherapy or contain essential oils. This newly broadened subcategory ranges from personal care to household care products, be it fragranced facial/hair/body care and oral care, to fabric care and home care. It all taps into the consumers’ craving for something that could improve their wellbeing through olfactory experiences—dubbed the “olfactory economy” in China.
Domestic Activities
Against this backdrop, the key market players waste no time to capture the opportunities. On the one side, there has been a flurry of brands and products coming into the perfume and fragrance scene, which up until now is largely dominated by the international prestige marketers and brands. Meanwhile we are seeing a rapid rise in homegrown niche brands, including Documents (acquired by L’Oréal earlier this year), To Summer, Scent Library, Uttori, Reclassified (RE) and Young Beast, as well as the debut of Emotif by ByteDance, TikTok’s parent company last September.On the flip side, an increasing number of skin care brands are doubling down on efforts to enter the subcategory of fragranced skin care products, essentially using scents as a differentiating factor. Some notable examples include Zhuben in makeup cleanser and Little Dream Garden in body care, all prioritizing the scent experiences and winning in this year’s Double 11 skin care category.
Another interesting example is Procter & Gamble’s Safeguard soap. The brand debuted its first perfume in its local online store in September. This limited edition reportedly features a signature scent of the brand’s best-selling soap and body wash in China, so-called “pure white” or “the scent of protection.” The launch is a marketing campaign to celebrate the brand’s 30th anniversary, but it is also viewed as a test to see if this approach has promise.
A Mixed Picture
Economic uncertainty has consumers on edge. The downbeat mood explains the sluggish sales figures in many discretionary categories during this year’s Double 11. While the overall picture of beauty sales looks gloomy, the new subcategory of fragranced products offers promise. That’s due, in part, to the booming “olfactory economy” driven by pleasure-seeking consumers.Increasingly viewed as a new growth area in China, it is getting better at tapping into the local consumers’ strong quest for emotional benefits, with innovative scents often with local twists like the notes of Osmanthus, as well as the help of technological advancements enabling the quantitative measurement of subjective feelings, and immersive interactions and digital engagement.
Ally Dai
Freelance Writer
allisondai@126.com
allydai73@gmail.com
Ally Dai is a freelance writer/independent consultant based in Shanghai. She has covered the beauty industry for more than 15 years. Previously a senior editor and industry researcher, she now works on content creation with publishing houses, event organizers and PR companies in the personal care and life science industries.