Sales of beauty and personal care products in the Asia-Pacific region are strong and expected to grow at a compound annual growth rate of 7% between 2018 and 2023, according to market research provider, Euromonitor International. China and Thailand will be the fastest-growing markets in the region at 9% apiece, while Taiwan and Singapore will grow by 4% and South Korea and Japan each growing 3%.
A Region of Regions
Consumer expenditures on personal care products differ widely across the region, with Hong Kong far ahead, primarily due to its high tourist spend. Following Hong Kong are Singapore and Japan, South Korea and Taiwan, down to the smallest countries such as Malaysia, the Philippines and Indonesia.
There are also differences in perceptions of beauty; in South Korea, 45% of consumers embrace aging. Meanwhile, in Japan, 56% want to look presentable and 48% of Chinese want to look their best. Loyalty to skin care brands is variable too and is lowest in South Korea (14%) and highest in Indonesia (53%) and China (41%).
Skin Care Is a Lifestyle
Skin care dominates beauty and personal care in the Asia-Pacific region and is worth $69.9 billion, accounting for 42% of all beauty sales; this is significantly higher than all other regions, including Europe, where skin care takes a 23% chunk of total beauty and personal care; in North America, it stands at 22%. The reason is China, where skin care sales topped $30 billion in 2018, more than double that of Japan. In contrast, skin care sales in South Korea were valued at $6 billion.
Asian consumers are not especially sophisticated in their use of skin care, predominantly choosing basic moisturizers over other types of product. However, fast growth in emerging sectors, such as face masks, anti-agers and skin care sets/kits, suggest there is still room for significant growth.
According to Euromonitor International, pollution and lifestyle changes are impacting Asian consumers’ choice of skin care products. Asia has a long history of air pollution and the region ranks second worst globally in terms of particulate matter concentration. In addition, stress, bad dietary habits and exposure to blue light is affecting skin condition. Local brands are well-placed to target these concerns, such as IPSA, Winona, Yunifang and Cogi, which all posted sales gains in excess of 25% between 2017 and 2018.
Youth Drives C-Beauty
In China, local beauty brands are proving increasingly popular among Millennial and Gen Z consumers and are growing rapidly in second- and third-tier cities, too. Euromonitor International Research Analyst Kelly Tang observes that new local brands are targeting a new generation of consumers, benchmarking themselves against international brands in terms of quality and rich content marketing.
“This is what makes C-Beauty brands stand out in the local market. C-Beauty brands are largely responsible for leveraging fast-growing internet retailing in China, making e-commerce their core strategy to gain share,” she said.
Perfect Diary, a Chinese e-commerce color cosmetics brand, is a prime example. Founded in 2017, it takes international trends in color and fashion and translates them into high quality cosmetics products for young Asian women. Another recent success story in color cosmetics is cult Chinese beauty brand Marie Dalgar, founded by Masa Cui, who struggled to find a mascara that could lengthen her short sparse eyelashes so she created her own “grafting” mascara. The brand is sold in more than 16,000 stores and counters across China and has a collaboration with Sephora.
Compared to beauty consumers in other APAC countries, Chinese consumers are heavily reliant on the internet for beauty messaging, especially reviews from key opinion leaders (KOLs) and key opinion consumers (KOCs).
“The emerging social platforms RED, DouYin and Taobao Livestreaming enable KOLs to show products directly to consumers,” explains Tang.
Leading Chinese male beauty blogger Li Jiaqi, reportedly livestream-tests as many as 380 lipsticks a day, earning him more than $1.5 million during the past year. He is a strong promoter of the Perfect Diary brand.
“In terms of online presence, the availability of review apps such as Xiao Hong Shu and online stores such as TMall have increased the exposure and distribution of small to medium size C-Beauty brands,” affirms Tang.
Mature and Brand Loyal
Nearly 50% of sales in the Hong Kong beauty market come from tourist spending, where international beauty brands hold strong appeal. According to Emily Leung, analyst, Euromonitor, local Hong Kongers have no interest in C-Beauty brands at all.
“The Hong Kong customer has a more mature beauty routine, are often more loyal to brands and, when selecting products, look for efficiency and proven benefits.”
The beauty category in Asia-Pacific could not be more diverse, offering rich opportunities for local and international brands to prosper.
Euromonitor will present at this year’s In-Cosmetics Global Marketing Trends presentations in Barcelona, from March 31-April 2, 2020. https://www.in-cosmetics.com/global/
The Marketing Trends theater is the most popular educational feature at the event. Priority passes are available for visitors to book and get a guaranteed seat in the sessions. To register and book a pass, visit in-cosmetics.com/register.