1
UNLOCKING CHINA’S COLOUR COSMETICS MARKET
POTENTIAL 2014 AND BEYOND
JUNE 2015, SHANGHAI
© Euromonitor International
2
Overview for colour cosmetics in China
Consumer and players’ trends in colour cosmetics
New digital opportunities
Future outlook
© Euromonitor International
OVERVIEW FOR COLOUR COSMETICS IN CHINA
BEAUTY INDUSTRY GROWTH
3
SUSTAINED
Total / Premium / Mass Growth
Premium vs Mass Proportion
Historic vs Forecast
7
% Value Growth
6
5
4
3
2
1
0
2008
2009
Total Beauty
© Euromonitor International
2010
2011
2012
Premium Beauty
2013
2014
Mass Beauty
Note: Inner circle 2009-14, outer circle 2014-19
Premium Beauty
Mass Beauty
OVERVIEW FOR COLOUR COSMETICS IN CHINA
4
POWER SHIFT TO EMERGING MARKETS CONTINUES DESPITE
SLOWDOWN
Developed vs. Emerging Markets in Total Beauty
600,000
7
500,000
6
5
51%
41%
4
300,000
3
200,000
2
100,000
1
0
0
-100,000
-1
2009
Developed
© Euromonitor International
2010
2011
Emerging
2012
2013
2014
2015
% Growth Developed markets
2016
2017
2018
2019
% Growth Emerging Markets
% Growth
US$ million
400,000
OVERVIEW FOR COLOUR COSMETICS IN CHINA
Beauty and personal care in 2014:
BRIC Markets % Share
Beauty and Personal Care Market
Growth
20
17.9
18
China
16
14
12
10
8
12.3
12
10.8
9.2
8.1
7.6
6
4
1.6
2
0
World
© Euromonitor International
China
1.5
1.6
RSP value size, US$, billion
RSP value growth, US$, current value
CHINA AS DRIVING FORCE IN GLOBAL BEAUTY AND PERSONAL CARE
China Beauty and Personal Care
Market Size
60.0
50.0
40.0
30.0
35.5
26.9
39.9
44.2
47.8
30.1
20.0
10.0
0.0
2009 2010
2011
2012
2013
2014
5
OVERVIEW FOR COLOUR COSMETICS IN CHINA
CHINA BEAUTY AND PERSONAL CARE: CATEGORIES’ DYNAMICS
Skin care, fragrances and colour cosmetics in China, US$ mn, fixed 2014
exchange rate
Skin Care
2014
Fragrances
2009
Colour Cosmetics
0
5,000
10,000
15,000
20,000
25,000
Current value growth %
2009-2014 value growth%
25
20
15
10
5
0
2009/2010
© Euromonitor International
2010/2011
Skincare
2011/2012
fragrances
2012/2013
2013/2014
colour cosmetics
6
7
Overview for colour cosmetics in China
Consumer and players’ trends in colour cosmetics
New digital opportunities
Future outlook
© Euromonitor International
CONSUMER AND PLAYERS’ TRENDS IN COLOUR COSMETICS
8
KOREAN WAVE IN COLOUR COSMETICS: CUSHION FOUNDATION
IOPE
Sulwhasoo
© Euromonitor International
Laneige
Hera
Innisfree
CONSUMER AND PLAYERS’ TRENDS IN COLOUR COSMETICS
9
CUSHION IMPACT IN OTHER COLOUR COSMETICS
Etude House-Eye shadow
Mamonde-makeup base
© Euromonitor International
Hera-Eye shadow
Etude House
Hera-Blush
Mamonde
CONSUMER AND PLAYERS’ TRENDS IN COLOUR COSMETICS
10
KOREAN WAVE IN CHINA: CUSHION FOUNDATION
Laneige BB Cushion
 325 RMB (15g*2)
 BB cushion
 Covering skin pores to make
it sleek as baby skin
Mamonde Brightening BB
Cushion
 269 RMB (15g*2)
 BB cushion
 Strengthens the fit between
BB cream and skin
 Effective moisturizing and
anti-ultraviolet rays
Sulwhasoo Evenfair
Perfecting Cushion
 346 RMB (15g*2)
 BB cushion
 Giving perfect coverage and
long-lasting hydration
Etude House Pearl
Brightening Cushion
 188 RMB (15g*2)
 All day long pearl bright skin
Innisfree Long Wear
Cushion
 188 RMB (15g)
 All day long wear
© Euromonitor International
CONSUMER AND PLAYERS’ TRENDS IN COLOUR COSMETICS
FOUNDATION INNOVATION: DROP FORMATS
Key innovation
1. Product innovation: Armani firstly
brought in ‘drop foundation’ concept
in 2013, followed by other key
premium brands like Lancôme and
HR.
Armani Mastro Fushion makeup
HR Powercell Foundation
© Euromonitor International
Lancôme Absolute Essence
Foundation
11
CONSUMER AND PLAYERS’ TRENDS IN COLOUR COSMETICS
LIP PRODUCTS: MOST DYNAMIC IN 2014/2015
Growth Driving Factors
1. Product innovation: Maybelline NY launched
bitten lips following latest Korean wave trend in
lip products. Carslan introduced berrygirl lip
product, looks a lot similar to Clinique’s
Chubby Stick (introduced in 2012), but priced
much lower (RMB89 compared to Clinique’s
RMB160 per unit, according to their Tmall
stores).
2. Celebrity endorsement: Maybelline NY
invited Ziqi Deng to be the spoken person for
its latest new product.
Clinique chubby stick
© Euromonitor International
Maybelline bitten lips
Carslan berry girl lips
12
CONSUMER AND PLAYERS’ TRENDS IN COLOUR COSMETICS
13
LOCAL PLAYERS ON THE RISE
China: Share Growth in Selected Colour Cosmetics Companies 2009-2014
Carslan
AmorePacific
Shanghai Feiyang (Mariedalgar)
Estée Lauder
LVMH
Chanel
Christian Dior
Mary Kay
L'Oréal
Shiseido
-1.5
© Euromonitor International
-1
-0.5
0
0.5
1
1.5
2
2.5
3
Market value share growth (percentage points)
3.5
4
14
Overview for colour cosmetics in China
Consumer and players’ trends in colour cosmetics
New digital opportunities
Future outlook
© Euromonitor International
NEW DIGITAL OPPORTUNITIES
THE CHANGING RETAILING LANDSCAPE OF COLOUR COSMETICS
100%
1.0
19.4
90%
80%
15
OTHERS
Internet Retailing
% share
70%
60%
Direct Selling
50%
Department Stores
40%
30%
Health and Beauty Retailers
20%
10%
Modern Grocery Retailers
0%
© Euromonitor International
2009
2014
NEW DIGITAL OPPORTUNITIES
CHANGES IN COLOUR COSMETICS MARKETING AND ADVERTISING
649 MILLION
>700 MILLION
Chinese Internet users in
2014
Chinese Internet users in
2020
Internet boom
connected consumers
47.9%
Internet penetration
among Chinese
households in 2014
© Euromonitor International
Shift away from traditional
media
Beauty blogging
Video posting
16
NEW DIGITAL OPPORTUNITIES
POPULARITY OF BEAUTY BLOGGING
557 MILLION
Mobile phone subscribers
having m-commerce
experience in 2014
© Euromonitor International
17
18
Overview for beauty and personal care in China
Consumer trends and manufacturers responses
New digital opportunities
Future outlook
© Euromonitor International
FUTURE OUTLOOK
FORECAST OF COLOUR COSMETICS
© Euromonitor International
19
FUTURE OUTLOOK
20
2014 AND BEYOND
7.0
12.5
6.0
12.0
5.0
11.5
4.0
11.0
3.0
10.5
2.0
10.0
1.0
9.5
0.0
9.0
2014
2015
2016
2017
Colour Cosmetics value US$ bn
© Euromonitor International
2018
2019
Growth rates y-o-y %
% growth y-o-y, current price terms
US$ billion
China Colour Cosmetics: Retail Value, 2014-2019
5.9
billion
US$ value sales from China
colour cosmetics in 2019
74%
Retail value growth Over
2014/2019
FUTURE OUTLOOK
CHANNEL FORECAST: INTERNET RETAILING
21
26%
Value sales
from internet
retailing in
2019, up
from 19% in
2014
© Euromonitor International
FUTURE OUTLOOK
22
OUTLOOK FOCUS
Korean Wave
• Colour cosmetics put Korean
brands at competitive
advantages, as key players
oriented from Korea is keen to
bring in latest innovative
products from Korea, for
example, cushion foundation
and bitten lipsticks during the
review period and probably
cushion blush in the forecast
period.
• Key innovation ensure that
they are appeal to consumers,
particularly young workforce
and students who will grow to
be consumer mainstream in
next five to ten years.
Distribution
• Health and beauty specialist
retailers to expand into lower
tier cities, through either
standalone or chained format.
• Internet retailing continue to
be the most dynamic . In
addition to B2C internet
retailers like Tmall.com ,
Jumei and UCO, emerging echannel like Wechat will be
another option for internet
retailers.
Competition
• International player continue
to focus on mainland China
market.
• Local players will join the
battle, with increasing
intensified competition
between international and
domestic players.
© Euromonitor International
As always brands that are able to understand consumers and their motivation for buying
colour cosmetics will perform best
23
THANKS FOR LISTENING
Michelle Mai
Business Development Account Manager
Diwen.Mai@euromonitor.com.cn
© Euromonitor International
© Euromonitor International