Updated: Sep 14, 2022
Pan Qiusheng, Chairman and CEO of Shanghai Jahwa, talks about cosmetic trends in China.
According to public information from the National Bureau of Statistics, in the first half of 2022, total retail sales of consumer goods amounted to 21,043.2 billion yuan ($3016.298 billion), a decline of 0.7% year-on-year. Among them, the retail sales of cosmetics reached 190.5 billion yuan ($27.306 billion), decreasing by 2.5% year-on-year, which is the first time in the past 10 years that the total Chinese retail sales of cosmetics fell in the first half of the year.
CHAILEEDO invited Pan Qiusheng, the Chairman and CEO of Shanghai Jahwa, to talk about the future trends of cosmetics in China.
From his point of view, the impact of the pandemic may be short-term, but the decline in overall economic growth and changes in consumer confidence derived from the pandemic will be the biggest variables affecting the cosmetics industry next year.
He revealed the following two possible trends in the cosmetics industry next year.
First, with the improvement of overall consumer quality and knowledge, as well as the new cosmetic regulations taking root, the Chinese cosmetic industry is likely to gradually shift from traffic benefits to the word-of-mouth effects. Meanwhile, the approach of relying on money to appeal to new customers will gradually migrate and balance with the approach of depending on quality for repurchases. At this point, the company’s technology R&D and innovation capabilities will contribute to the sustainable development of the product.
Furthermore, the category development growth rate may change significantly due to the economic environment, requiring companies to observe and adjust strategies promptly. For instant, if the economy goes up, consumption will continue to upgrade, and the category will show high-end, which is beneficial to skincare and beauty in general, especially for medium and high-end brands and similar essence and other categories of consumer upgrading.
However, if the economy goes down, the personal care category will accelerate growth due to inelastic demand, and there may be a phenomenon of accelerated growth of big brand duplicates in the skincare category.
In addition to these trends, Pan Qiusheng is optimistic about the future development of soothing, repairing, and anti-aging products, the baby product category, and aroma and fragrance area.
He said that the market share of soothing, repairing, and anti-aging products, baby product category will continue to grow due to the rising proportion of sensitive skin, as well as macro factors such as aging and increased concern for the safety of baby products.
It is worth noting that the Fragrance Product Insight Report 2022 released by CHAILEEDO shows that the Chinese perfume market size is expected to reach 16.9 billion yuan ($2.422 billion) in 2022, and by 2025, its retail sales are projected to 30 billion yuan ($4.3 billion), which is expected to become the second largest market in the world. The fragrance has also become a new category for Shanghai Jahwa to focus on. For example, recently, Shanghai Jahwa completed its investment in local fragrance brand Timingbox.
Finally, about the future of the beauty channel, Pan Qiusheng believes that the private domain of new retail opened will become the next new field for beauty companies competing to arrange.
On September 22, the 5th Conference on China’s Cosmetics Trends will be held in Hangzhou, China. CHAILEEDO will be live streaming the entire event, register now to book a live stream: https://www.chaileedo.com/events.