Business / Industries

Beauty business tilts from West to East

By Wang Zhuoqiong (China Daily) Updated: 2016-03-08 08:10

Beauty business tilts from West to East

Customers check out luxury brand Chanel's cosmetics at a duty-free shop in Shanghai. [Photo provided to China Daily]

The momentum started during the Singles Day Shopping Festival on Nov 11, when AmorePacific's L brand sold 45,000 sets of its bb cream worth more than 9 million yuan, a new e-commerce record for this category.

The brand is popular online and offline, which translates into higher sales and improved financial performance for the company.

The South Korean company's October-December net profit surged more than 77 percent year-on-year to 92 billion won ($76.2 million), thanks to a strong performance in overseas markets like China, rising popularity of Korean pop culture and expanded distribution channels.

Although Japanese cosmetics brands are now ahead of their French counterparts in sales to Chinese consumers, they still lag South Korean players.

Much of their sales are due to strong demand from Chinese tourists. In 2015, Shiseido Co Ltd's sales rose 12.6 percent year-on-year to 763.1 billion yen ($6.7 billion) on the back of the support from Chinese consumers.

Similarly, Kao Corp's 2015 sales of beauty and health products rose 5 percent year-on-year to 1.47 trillion yen, thanks to its Asia-wide presence.

Jason Yu, general manager of Kantar Worldpanel China, said demand for Japanese products is huge, but Japanese brands have not evolved fast enough, in terms of wooing Chinese consumers with products, distribution channels and marketing communications.

Relative to South Korean labels, Japanese brands are more conservative in market investment.

Yu said many Japanese brands still rely heavily on offline options like department stores and cosmetic shops, but are slow in embracing e-commerce. "They aren't engaging the younger consumers as much as Western and South Korean brands."

Despite the upsurge in popularity of South Korean and Japanese cosmetics brands among Chinese consumers, skincare products of Europe and the US still retain their advantage, according to Mintel.

Its report The Importance of Brands in Skincare Purchasing said French brands command tremendous customer loyalty. For some 21 percent of shoppers, French skincare brands are their favorites, followed by the US brands (preferred by 13 percent) and South Korean labels (2.3 percent).

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