Shifts in Chinese skincare trends force changes in market strategy

10 May 2018 4 min. read

Beauty products are seeing growth in demand across China on the back of a growing middle class. A new analysis from OC&C Strategy Consulting explores consumer preferences in a market which is increasingly the domain of research for products as well as changes in the marketing domain.

The beauty product market has seen booming trade in recent decades in line with the global rise of the middle class, with Southeast Asia in particular driving growth. Competition is now fierce in some regions, with international corporates facing stiff opposition from up and coming local brands.

One major area of contention is the Chinese beauty products market, consumed by the growing middle class. Yet, keeping customers keen on a particular brands has been found to be increasingly difficult, according to a new OC&C Strategy Consulting report. The report, titled ‘Unmasking the secrets of Chinese beauty’, is based on data from an online survey of 2,800 female skincare consumers, stemming from 20 Tier 1-3 cities in China.Typical skincare processSkincare routines tend to be relatively broad in application, requiring almost a dozen different products in some cases, with the survey group all using a facial cleaner, toner, eye cream and serum – and with older women tending to use more steps in their routines.

The survey shows that Chinese consumers are increasing their spend on skincare products. Last year that increase was 88% – through trading up within their brand to more expensive items (58%), trading up to more expensive brands (36%), and by way of expanding skincare routines which include additional steps.Top information sources for skincare productsYet, Chinese consumers are relatively fickle when it comes to selecting a product – particularly one as sensitive as personal skin care. 90% say that they engage in extensive research to decide on a product, with the online environment playing a key role in the search.

While China is relatively stratified into two online environments, Alibaba and JD, large numbers flock to third-party online platforms to make their decisions (41%), followed by those who see social media as a key judgment resource (36%). Friends and family are noted as the third most powerful force, followed by brand websites and more traditional channels, such as television advertising.Top 3 ranking of preferred marketing scheme by ageMarketing continues to be a key driver for brand success. Traditional forms of marketing however are unlikely to succeed in creating value propositions for all age categories in the segment. The research shows that considerable differences exist between age categories; generation Z, for instance, prefers live-streaming and Key Opinion Leaders (KOL) daily usage of the products, while, in the 30+ age bracket, considerably more attention is paid to drama / TV show product placements – although KOL daily usage of products still remains a driver across all ages.

KOLs tend to either entice people to use products recommended by them, more effectively for younger generations, or trigger people to use the product recommendation as a starting point of research into the product, with local celebrities ahead of beauty bloggers in terms of the most effective opinion leaders.Top reasons for choosing online

Meanwhile, shopping online in China has boomed in recent decades, with recent analysis showing that almost 40% of most segments will be captured by digital sales channels in the coming decades – and online shopping is a key aspect of the Chinese skincare shopping journey, with customers buoyed by a wider selection and the ability to purchase wherever / whenever they want, forcing industry competitors toward a multi-channel marketing approach.

As the report concludes, “China is probably the most competitive battleground in the world, with powerful players from Europe, the US, Japan and Korea deployed at full strength. These companies have been joined by Chinese players, which have become serious challengers as they have dramatically increased their market share in recent years... The China prize is a big one. But the bar is being set higher and higher for those who wish to win big.”