No ugly side to mainland beauty business during crisis

The sweeping financial crisis has taken only a mild bite out of beauty salons in Shanghai, and industry players are upbeat about the future.

"We don't see any impact on us from the financial crisis," said Ye Zi, shopkeeper of Chlitina on Pingliang Road in Shanghai, a franchise store under Chlitina, a Taiwan-based skincare company.

"We are not seeing any reduction of our business," said Ye. "Even at this point of time, people still care about how they look and would like to invest in it."

The picture is similar in Everlasting, a Shanghai-based beauty salon providing spa, beauty, slimming and massage services for both women and men.

"Generally speaking, we don't feel an obvious loss in our business," said Xu Haiying, Everlasting's spokeswoman.

The 10 shops under Everlasting's name have not shown any signs of slowing down, said Xu. "But everybody is talking about the financial crisis. Many customers are taking the crisis as an excuse to bargain with us."

To Xu, a more obvious change on the side of her customers is that they become more rational.

"In the past, people went to a beauty salon and got a trial treatment. When they felt good, they might decide to buy a pass," said Xu. "Now they will think twice."

Xu said her company is taking a series of measures to counter the side effect of the financial crisis in the new year, but she declined to disclose details.

"Those at the high-end of the beauty market, such as medical aesthetic services, will be affected more seriously than the less expensive beauty services, like facial treatments," said Zhang Xiaomei, editor-in-chief of China Beauty Fashion News and a long-time beauty industry observer.

Relatively expensive beauty salons are facing a reduction in new customers and price drops, said Zhang.

While many beauty salons sailed through 2008, Zhang cautioned if the financial crisis lingers this year, many middle-class players will be affected.

Both Chlitina and Everlasting have launched promotions for their skincare products during the first two months of 2009.

In the long term, Zhang said the demand for beauty care will still be on the rise, and compared with women in Hong Kong and Taiwan, mainlanders spend much less on beauty products and services, she said.

According to a 2007 industry annual report, China's beauty industry netted over 200 billion yuan in revenue in 2006 and the figure is predicted to double by 2011. The beauty industry has become one of the top five consumption priorities in China.

(China Daily 02/09/2009 page7)