Top leading Cosmetics Brands in China and full strategy analysis (2023)

Chinese cosmetics market

According to Techsciresearch.com The Chinese cosmetic market is expected to grow rapidly in the next five years due to the growing demand for premium cosmetics and the growing number of working women who tend to spend more on cosmetic products. China is the second-largest cosmetics market after the United States in terms of revenue and consumption. The beauty and personal care market is facing increasing demand due to the growing urbanization and influence of social media.

The Chinesecosmetics market is classified into:

• skincare
• hair care
• bath and shower products
• makeup cosmetics
• perfumes
• deodorants.

Read: China Skincare Market Guide

Skincare products accounted for the largest market share in 2019 and the segment is expected to dominate the market in the next five years as well. Face make-up is still an emerging segment and is gaining popularity among younger consumers. The Chinese cosmetic industry is a very profitable one, not only big brands but also smaller brands have the opportunity to excel as long as they understand the value of branding.

Brands should utilize innovative and personalized strategies to draw the attention of Chinese consumers. The constant growth of digitalization can help brands increase brand awareness and boost sales through local social networks and e-commerce channels.

Themost important Chinese cosmetics trends in 2020

Natural and“Green” cosmetics

The growingdemand for wellness beauty products and natural cosmetics has significantlyincreased the growth of the cosmetics market in China. Chinese consumers areincreasingly aware of the importance of natural products and are much morecareful to use products that are good for the skin and the body.

Male grooming Growing in China

The growthof the male grooming sector is also supporting the demand for premium cosmeticsdedicated to men. This factor is a significant growth opportunity for brandsthat produce men’s cosmetics.

Cosmetics brands in China have to go for Digitalization

Digitizationis one of the main factors that has had a direct impact on the growth of thecosmetics market. the constantly growing use of social media and, in general,the internet, have given brands the opportunity to increase awareness of thebrand by Chinese consumers.

Chinese Live streaming & KOL

Live streaming, through video app, is very popular in China and is particularly loved by Chinese users. Live streaming might be the perfect choice when it comes to showcasing the personalization and authenticity of your cosmetics products.

The KOLs arethe key that guides the listening, for this reason, currently, many ChineseKOLs are producing watch-and-learn videos to share the most important tips andtricks about cosmetics products.

Due to its ability to influence Chinese consumers, KOLs marketing is widely used by cosmetics and beauty brands in China. That’s why, by using live streaming, many brands integrate KOLs collaboration into their marketing strategies to engage large masses of users in a few minutes.

Li Jiaqi, knownas the “King of Lipstick” in China or Austin Li, is a clear example of KOL’ssuccessful digital strategy in China. It is without a doubt the best salesmanof cosmetic and beauty products in China.

• He sold Using 15,000 lipsticks in just five minutes by using Taobao live streaming
• Thanks to live streaming about cosmetic and beauty products on Douyin, currently He has close to 40 million fans.

Many cosmetic consumers refer to their product comments as guidelines before buying cosmetics. He has proven to be an impressive KOL for brands that sell cosmetics in China.

Artificial intelligence: A winning tool for cosmetic brands in China

AI in China’s beauty and cosmetics industry is making changes at the level of customer acquisition, products, and event management.

Customerexperience is enhanced by the digital transformation of the beauty industry inChina, such as automated retail, virtual makeup try-on and removal, andvoice-guided mirror.

For example, in 2019, L’Oreal announced the China launch of an anti-acne advice application on Alibaba platforms, developed for its La Roche-Posay brand. La Roche Posay’s acne diagnostic tool uses selfies and AI to recommend the right anti-acne routine; it allows consumers to obtain a skin diagnostic from a photo of their face taken by a smartphone.

Whoare the Chinese major players in China’s cosmetics industry?

According to Qianzhan, foreign brands such as Procter & Gamble and L’Oréal accounted for approximately 50% of the market share in the cosmetics industry in China.

Domestic firms (Chicmax, Pechoin, and JALA Group) occupied 17.97% of the market share. However, it’s expected to grow because, from 2014 to 2017, the market share of Pechoin increased from 1.4% to 2.3%, and that of Chando increased from 1.3% to 1.7%.

The other players are:

• Unilever
• Shiseido
• Colgate-Palmolive
• Estée Lauder
• Amore pacific

P&G Strategy in China

The Procter & Gamble Company is an American multinational consumer goods corporation headquartered in Cincinnati, Ohio. It specializes in a wide range of personal health, personal care, and hygiene products. These products are organized into several segments including:

• Beauty
• Grooming
• HealthCare
• Fabric& Home Care
• Baby,Feminine, & Family Care.

P&G entry strategy

P&G’s entry strategy for China started in 1985 with market research and advertising. The advertising campaigns began 1-2 years before P&G even began selling products in China as part of a promotional strategy of building brand awareness and a reputation for the company.

The group started its business in China with a joint venture in Guangzhou, to produce Head & Shoulders, a type of anti-dandruff shampoo in 1988.

Toward a more localized approach

Like many other multinationals, P&G had initially entered the Chinese markets with premium products aimed at wealthy consumers, subsequently, P&G moved on to an approach that required them to truly understand Chinese consumers in much more detail and to develop and market products for meeting specific needs and at prices that would appeal to much larger potential consumers.

P&Gmanages companies for over 25 brands in 10 categories nationwide, including:

• Pantene
• Head& Shoulders
• Olay
• SK-II
• Safeguard
• Ariel
• Oral-B
• Crest

Many of its other global brands are also available to Chinese consumers through its e-store on the Tmall e-commerce platform owned by Alibaba.

SK-II in China

SK-II is the most profitable brand for cosmetic products in China. It is a Japanese cosmetics brand launched in the early 1980s. it is sold and marketed as a premium skincare solution in East Asia as well as North America, Europe, and Australia.

SK-II marketing strategy in China

SK-II hasrolled out a series of measures to engage with younger generations of consumersthrough art exhibitions and retail enhancement with the support of digitaltechnology.

• Brand storytelling

Forexample, SK-II has launched a “Power of Pitera” art exhibition with acollection of works of art that tell the story of its iconic essence Pitera,which is a liquid naturally derived from the yeast fermentation process.

In this wayhe has been able to exploit his marketing strategy by telling the story of the productcreation, increasing consumer involvement. Furthermore, he stressed the use ofnatural products, which as we said earlier, are very important for today’sChinese consumers.

• Influencer/KOL

The brand also used the Chinese actress Tang Wei as a brand ambassador. With a bold and sincere closeup of Tang’s face, the artwork aims to showcase the transformation to clear skin that millions of women have experienced with Pitera.

• Digitalization

All our lives today, from the time we wake up to the time we go to sleep, are driven by some form of technology, especially for Chinese consumers. That’s why SK-II is focused on digital strategy by increasing brand awareness and selling its products on Chinese apps like Wechat, Xiaohongshu, and Weibo.

L’Oreal

L’Oréal,the world’s largest cosmetic company, entered China’s market in 1997. Sincethen, L’Oréal in China has expanded and become one of the nation’s most lovedand purchased luxury cosmetic brands.

L’Oréal hasdevoted itself to beauty for over 100 years and has developed its internationalportfolio of 36 brands, covering:

• Makeup
• Cosmetics
• Haircare
• Perfume
• skincare.

Currently, 23 of its brands are present in the Chinese personal care and beauty market. L’Oréal’s sales in China grew 35% in 2019.

L’Oréal marketing strategy for China

Read the full case study

• Digitization

L’Oréalexcelled at the China digital strategies across four dimensions:

• paidand earned media
• ownedchannels
• search
• socialmedia.

• Use of social media and KOL

L’Oréalleverages social media, like Weibo, WeChat, to reach Chinese customers. Most ofL’Oréal’s brands have their own official accounts on Weibo with a large numberof followers.

In 2018, L’Oréal Paris announced Yuan Wang, an 18-year-old Chinese idol of the boy band TFBoys, who has nearly 40 million followers on Weibo, as the new Chinese brand ambassador. Wang fans purchased L’Oreal products worth more than 13.93 million yuan after the teenage idol became a supporter of L’Oreal’s beauty.

L’Oréal also launched its marketing strategy on WeChat. For example, YSL has created a mini-program that emulates the features of Xiaohongshu, allowing the creation of user-generated content.

• Offline to online strategy

L’Oréal sub-brands in China are finding new ways to connect with Chinese consumers and involve them in a more entertaining consumer experience.

For example, L’Oréal China launched omnichannel retail with partners like Alibaba. This partnership led to the co-creation of the first mobile AI diagnosis application based on artificial intelligence and the first 3D makeup test service on the Tmall mini-app.

Unilever in China

Unilever has 400 brands that fall under 14 different categories. It is currently one of the biggest producers for:

• Ice cream
• Tea drinks
• Margarine and ingredients
• Cleaning products
• Skincare products
• Haircare products

In thecategory of family and personal care, its famous brands include Lux(力士), Dove(多芬), Hazeline(夏士莲), Pond’s(旁氏), andVaseline(凡士林).

Uniliver Chinese marketing strategy

Uniliver entered the Chinese market in 1986, and in 2006, the company set up its regional headquarters in the Changning district of Shanghai.

• Localization

One of the key objectives of Unilever’s research and development center is to increase the range of natural elements used in its products, in order to better meet the demand of local consumers.

A strategythat goes very well with the new “Green” trend of the Chinese market.The company plans to leverage its global resources to better serve its“China for China” innovation strategy.

• Digitization

Unilever’s CEO, Jope, said that previous investments in digital analysis and transformation are now helping Unilever keep up with the changing circumstances of the Chinese market due to the health crisis.

In commonwith the broader trends observed across the industry, Unilever has alsobenefited from the growth in online spending and the push for e-commerce ingeneral: Alan Jope CEO of Uniliver said that digitizing Unilever is one of hismain priorities.

Shiseido in China

Shiseido isa Japanese multinational personal care company, which produces products like:

• Skincare
• Haircare
• Cosmetics
• Fragrance

It is thelargest cosmetic firm in Japan and the fifth largest cosmetics company in theworld.

Shiseidomarketing strategy

• Offline to online strategy

In 2018 the company revealed its “New Retail” strategy that combines offline and online elements. The result of this strategy was the platform called “Shiseido Official Beauty Star Product Hall”, an O2O platform that connects retailers with e-commerce and allows customers to order products not available in the store using a custom device.

The formatleads to three satisfactions:

• customersare able to purchase products that are not in the shop
• theshop can earn revenue from the incentive
• Shiseidocan obtain user data

With the support of its new office in Shanghai, Shiseido is well-positioned to accelerate its O2O strategy.

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• Digitization

In 2019 during the China Beauty Expo in Shanghai, Shiseido presented its “Beauty Method” concept store, basically a glamorous kitchen environment that combines elements of gourmet food and beauty products. It was an immersive shopping experience that made every customer feel completely spoiled. It aimed to offer customers complete advice not only on skin and makeup care but also on hair, fashion, diet, and fitness.

• Localization through “green” products

Shiseido is going to establish a new research branch of its china innovation center in the oriental beauty valley to focus on the R&D of green beauty products in response to the market trend in China.

Read more about the success of Japanese Beauty Brands in China

Colgate-Palmolive China

Colgate-Palmoliveis an American multinational company that deals with the production anddistribution of:

• Body care products (soaps, shower gel, shampoo, deodorants, shaving foams)
• House cleaning (liquid detergents, softeners, detergents)
• Oral hygiene (toothpaste, mouthwashes, brushes).

Inaddition, Colgate-Palmolive is making a foray into the beauty industry, withthe acquisition of two skincare brands:

• PCA Skin PCA, which is specialized in medical-grade in-office and take-home skincare products
• EltaMD, which offers sun care products for broad-spectrum, everyday use, dispensed by physicians.

Both brands are similar in size and are primarily sold through professional skincare channels and online in the US and China, as well as in additional international markets.

Chicmax China Strategy

Chicmax has experienced strong growth since 2012 when it started consolidating its brands and SKUs and focused on BB cream with aggressive marketing. It is now expanding its portfolio of brands for child care, natural skincare, shampoo, and human care products.

The fast growthfor this local brand in the past couple of years was driven by:

• Some mass-market consumers who continued to trade up. Consumers are becoming more rational and eventually, they will choose good-quality products that meet their specific needs, irrespective of local or foreign brands.
• The availability of manufacturing capacity and Taobao as a low-cost channel, which has helped numerous smaller brands experience rapid growth.

EstéeLauder

The EstéeLauder is an American multinational manufacturer and marketer of prestige:

• skincare
• makeup
• fragrance
• haircare products

The companyowns a different portfolio of brands, distributed internationally through both e-commerceand retail channels.

In 1993, the Estée Lauder was launched in China and today it is a leader in China’s prestigious beauty industry.

Estée Lauder marketing strategy for China

Thecompany’s success is related to initiatives taken by the beauty company, whichinvolves a marked shift in the group’s target market toward a youngerdemographic.

• Social media and KOL

The company’s renewed focus on digital engagement and the use of social media platforms such as WeChat and Weibo.

The analystfurther underlined the importance of Estée Lauder’s collaborations withhigh-profile local celebrities, such as actress and singer Yang Mi and modelLiu Wen, in driving brand awareness in the Chinese market, particularly amongyounger consumers.

• E-commerce

The company, which has been selling about 10 of its brands including M.A.C and Tom Ford on Alibaba’s online marketplace Tmall, said the site was the largest contributor to its online sales in China.

Amore pacific China

Amorepacific Groupis a South Korean beauty and cosmetics conglomerate, operating over 30 beauty,personal care, and health brands including:

• Sulwhasoo
• Laneige
• Mamonde
• Etude
• Innisfree.

Amorepacific marketing strategy

• Digitization

“Amore Pacific wants to respond to the rapidly changing Chinese digital market through innovative products developed with TMIC and plans to raise its digital business capabilities to the next level through diverse cooperation such as developing products that lead trends and content to appeal to Chinese customers,” said AmorePacific CEO Ahn Sae-hong.

• E-commerce

In 2019 South Korea’s top cosmetics maker, AmorePacific, agreed with China’s Alibaba Group to cooperate on the development and distribution of cosmetic products specialized in the Chinese market, based on cooperation through the market-research division of Tmall.

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Read more about the Korean Skincare brand in China

Pechoin Online Marketing Case Study in China

Pechoin (百雀羚) is a skincare brand. Established in 1931 in Shanghai, Pechoin grew over the decades until it became a symbol of Chinese success.

Pechoin digital marketing strategy

The brandis widely seen as a pioneer of tailored digital marketing strategies, whichopened the company up to a novel demographic and a younger consumer base. Infact, the brand’s repositioning on the market as a millennial-friendly brandwas achieved by creating a successful visual brand identity with creative andmemorable advertisings.

During the COVID-19 stay-at-home period, JD.com confirmed that sales of cosmetics and skincare products grew by 97 % year-over-year, with SK-II, Lancôme, L’Oréal SA, Olay, and Pechoin, remaining its five best-performing brands.

Jala Group

Jala Group,known for the brands Chando and Maysu, has been one of the most successful playersin the domestic market.

Chando digitalmarketing strategy

Some ofChando’s marketing launches have received big commitments, such as the ChandoLove Lines campaign, which was launched for Mother’s Day and reminiscent ofDove’s real beauty campaign. Advertising encouraged women to embrace their“natural beauty” lines and signs instead of pursuing cosmeticprocedures.

Thecampaign reached 2 billion people with 160 million views on Weibo, whilee-commerce sales exceeded expectations with a 15 times higher than averageincrease in sales.

For the men’s skincare line, Chando collaborated with the “CrossFire” video game and integrated his cosmetics into the game by offering personalized equipment and character appearance.

What is the successful market strategy to sucees as a cosmetic brand in China?

E-reputation

Cosmetics are one of the products that require a lot of budgets to check your reputation. Most of the time, sales depend on it.

You need to know where the Chinese go to find information. If you check the source of information, you can successfully check the reputation. To do so, the right SEO strategy and, eventually, SEM strategy are fundamental.

All thebrands mentioned above, have a website in Chinese and practice SEO and SEMstrategies on Baidu (the Chinese search engine).

Socialmedia promotion

To meet the demand of Chinese cosmetics consumers and acquire greater market share in China, L’Oreal, Estee Lauder, Procter & Gamble, Shiseido, and other foreign brands have constantly adapted new strategies and intensified the channels’ promotion.

WeChat& Weibo will always be great picks when it comes to brand recognitionbecause they are the first social media platforms that Chinese users will use tolearn more about your products and brand.

BesidesWechat and Weibo, there are many other interesting platforms where you canincrease brand awareness and promote your cosmetics products like Douyin andXiaohongshu.

Rememberthat in the cosmetic industry a KOL collaboration is very important to engagefollowers and boost sales.

Whatare the distribution channels to sell cosmetics products in China?

In 2018, the online retail sales value of cosmetic products in China amounted to approximately 194.4 billion yuan. This number was forecasted to exceed 350 billion yuan by 2024. More than 70 % of cosmetics sales revenue in China comes from e-commerce sites like Tmall and JD.com. There is also a Chinese professional cosmetic site called Jumei. These platforms are very useful for western brands to reach more consumers, however, you need to promote your store and try to increase the traffic and sales.

In order to promote your brand and if you have any questions related to how to enter the Chinese cosmetic market, contact GMA now!

Read more Cosmetics brands Case Studies in China:

• L’oreal China: Secret of success?
• Lancôme Digital Strategy in China
• SKII in China
• Shiseido China
• L’Occitane in China