Mainland China and Taiwan
Despite minimal inflationary pressure in Mainland China and Taiwan (3.6% in China and 2.5% in Taiwan), the rising concern of pandemics and the limited mobility constraints caused by the lockdown have meant that shoppers spent less on beauty products. As a result, value sales dropped by -5% in Taiwan and -1% in China for the year ended June 2022 compared to the previous year (year ended June 2021).
Even though they spent less, when they do buy beauty, people in these markets have been trading up to more premium offers, as they seek small indulgences to help them through challenging times. This has driven sales for facial skincare and some haircare products such as shampoo.
Colour cosmetics has seen some signs of a shift out of the category. Traditionally a major beauty purchase in mainland China and Taiwan, the ongoing requirement to wear masks and restricted opportunities to socialize has reduced the frequency of using make-up. There is clear evidence that some people have shifted their spending on colour cosmetics to other categories, such as high-efficacy facial skincare and haircare, where the effects of their efforts can be more visually appreciated during these times.
Instead of applying makeup, spending more time and money on the maintenance and health of the skin is a trend that is likely to continue to gain momentum. This trend has already boosted sales in these categories and leading to further innovation by premium brands and the emergence of super premium facial products.
Increased innovation from beauty brands as they respond to the demand for more personalisation to meet shoppers’ individual needs and demands and to give them a reason to indulge is evident across facial skincare in both markets.
In Taiwan, where the desire for prestige beauty buys is a long-standing trend, brands are trying to capitalise on this by enticing shoppers to buy more. For example, Estee Lauder has been offering a larger volume of products to give shoppers better value for money for their shopping trips and prevent loyal brand buyers from lapsing out of the brand.
In Mainland China, some super prestige brands are adding science-based innovations such as anti-ageing to their mainstay ‘protect your skin’ messaging. These ‘super prestige’ offers to ensure that the prestige brands can continue to stand out among the growing number of mass market facial skincare brands dipping into the premium end of the market.
Helena Rubenstein has switched its best-selling serum, Power Cell Skinmunity the Youth Reinforcing Serum, to a cream that commands a far higher price and has evoked more prestige sentiments for consumers in China. Lancôme and Estee Lauder meanwhile are leveraging flagship shopping festivals, such as Double-Eleven Day, the biggest shopping day in the world, to display its super-prestige brands such as Lancôme Absolu and Estee Lauder Re-Nutriv.
In Mainland China and Taiwan where mask-wearing is still mandatory in public spaces in 2022, it appears that some facial skincare categories are picked up by shoppers as the “new lipstick” to satisfy their desire for a little bit of luxury even while their daily lives are disrupted, and disposable income decreases.
Consumers with a limited budget are finding their ‘new lipstick’ fix by buying entry-level premium beauty items such as a toner or facial mask, or one of the trial sachets that are becoming a popular way for brands to entice shoppers to their premium offers as part of a low regimen beauty routine. In this way, they can enjoy a small indulgence and feel the warm glow that buying premium beauty products provides for two-thirds of the price of other prestige skincare products.
This collective effort of brands to entice consumers to upgrade their skincare routines as an act of indulgence and self-care, is helping keep the beauty market stable in both Taiwan and mainland China and has given premium beauty products overall a bigger slice of beauty sales. Both markets showed growth of two percentage points for the year ended July 2022 compared to the same period the previous year.
Another pillar of premiumisation is spotted in China’s mass market. This price tier has evolved to be more efficacy-driven as local Chinese brands re-position themselves to be as good as the professional brands, backed up with top-notch technology. They have moved away from natural cosmetics with hydration/moisturizing efficacy towards anti-ageing, solution-based treatments that people can use on their skin without concern.
Do it yourself premium haircare
Fewer trips to hair salons have led to greater demand for specialist hair products. In particular special care is being taken with shampoo that meets people’s individual needs such as minimising hair loss, providing volume or giving hair styling that they display on social profiles. These added benefits have become so highly desired that haircare products are now premium brands with pricing to match.
Schwarzkopf’s FibrePlus promises to give hair thicker roots and volume has seen sales volumes rise by 81%
Skinification of haircare
Further innovation in these markets has come from borrowing some of the well-known skincare ingredients or derma concepts to give higher efficacy to haircare products. For example, Aveda brings in exfoliation benefit of micellar water into shampoo. Also, customising by adding functional essence to the main regimen is spotted in haircare, which directly targets consumers with specific hair/scalp concerns.
In China, like other markets in Asia, people continue to pay more for those essential items that meet their demands for hygiene.
+81% | shampoo buyer base
+24% | Anti-hair fall shampoo buyer base
1. Acute impact of pandemic
Restricted mobility has contracted beauty sales in Mainland China and Taiwan, but this has been tempered with lower inflation than the rest of the world and a shift to premium beauty products, particularly facial skincare and haircare.
2. Communication-driven demand
There is a growing demand by expert consumers for clearer communication of the science or efficacy of their beauty products. As more shoppers in these markets indulge in beauty as an indulgence during dark times, they will look to premium or local masstige brands teasing their way into the growing premium segment to educate them on the efficacy of their products.
3. Facial skincare - the nuovo lipstick effect
Even shoppers with less budget who wouldn’t normally buy premium beauty brands are showing aspiration to do so and are stepping up to premium beauty products by making small purchases such as a facial mask, toner or even buying the new travel-size or trial sachets that are being displayed by more premium brands
