Beiersdorf eyes greater localization in skincare

China is emerging not only as a key growth market for foreign consumer companies, but also as an increasingly important source of innovation, as local consumer insights, digital capabilities and supply-chain strengths are reshaping how multinational brands develop products for China and beyond, according to a Beiersdorf executive.

China stands as one of Beiersdorf's most important markets and a key source of business growth worldwide, said Xue Wei, managing director for Northeast Asia at Beiersdorf Group, the parent company of Nivea, La Prairie and Eucerin. The group has built its second-largest innovation center in Shanghai, enabling the company to better tap local consumer insights, pursue homegrown innovation and develop products tailored specifically for Chinese shoppers.

While multinational companies face intensifying competition in China, analysts say the country's vast consumer base, expanding middle-income groups and well-developed industrial ecosystem continue to create long-term opportunities for global businesses.

Joe Ngai, senior partner of McKinsey & Company and chairman of McKinsey Greater China, said that China remains an ultra-competitive market, but foreign companies can still thrive if they are able to keep pace with the country's rapid innovation and increasingly sophisticated consumers.

Research from McKinsey shows that China accounted for roughly one-third of incremental global GDP growth in 2025. The Economist Intelligence Unit estimates that the number of Chinese households with annual disposable income above $25,000 reached 64 million in 2024 and is projected to nearly double to 116 million by 2029.

China is the world's second-largest beauty market, valued at about $65 billion, according to McKinsey & Company and London-based fashion industry platform The Business of Fashion. Foreign brands continue to have a strong presence in premium skincare, although domestic brands are gaining ground, particularly in mass and masstige segments.

According to consulting firm Bain & Company, Chinese consumers are increasingly prioritizing efficacy-driven, clinically validated products over low-cost alternatives, reshaping research and development priorities for international consumer companies.

Beiersdorf's innovation center in Shanghai exemplifies this shift. Rather than simply bringing formulas developed in Europe to China, the company uses the facility to study local skin characteristics and consumer preferences, and to develop products tailored to Chinese consumers that may later be introduced to other markets.

"In terms of R&D, in China, we have a mode that is both 'slow' and 'fast'. Being 'slow' refers to our long-term accumulation of scientific research and expertise in Germany and globally, while being 'fast' refers to the rapid pace of clinical validation in China, the rapid digital validation within China's e-commerce ecosystem and the rapidly evolving skincare needs of Chinese consumers," Xue said.

Li Jiaqi, a director at Shanghai-based China Insights Consultancy CIC, said: "The high stability of German craftsmanship and industrial quality control, coupled with China's agile and flexible supply chain and comprehensive digital marketing conversion capabilities, make the products highly competitive in the market."

Even as competition intensifies across consumer sectors, China's digital infrastructure, diverse consumer segments and well-developed supply-chain ecosystem continue to create opportunities for international brands. Analysts say success increasingly depends on genuine integration into the local market, including understanding consumer needs, investing in domestic R&D capabilities and working with local industry partners.

On Sept 14, a series of sensitive-skin repair products from Eucerin made their global debut in Shanghai. On the same day, Eucerin announced a strategic partnership with Tmall Hey Box for new product launches, further expanding its omnichannel presence in China.

zhengyiran@chinadaily.com.cn