China Cosmetics Trends Report on 2023 Q3
The Chinese cosmetics market is set for a resurgence, with several trends highlighted in the “China Cosmetics Trend Report (Third Quarter 2023)” conducted by Chaileedo Research. Despite a slow start to the year with declines in promotion and import amounts, The cosmetics market size for the first half of 2023 reached 407.2 billion yuan, showing a year-on-year growth of 3.5%. This was led by domestic brands, despite the challenges faced by major e-commerce platforms like Tmall and JD.com.
- Five key trends were identified for the beauty market’s recovery:
- Customized cosmetics regulations relaxed.
- Tighter regulations on e-commerce and live streaming platforms.
- Raw material companies become investment hotspots.
- Significant disparities in brand structures between interest-based e-commerce and traditional e-commerce platforms, making it easier for domestic brands to break through on interest-based platforms.
- Research and development investment proportion of China’s domestic beauty companies continues to rise.
- Beauty devices experience a comprehensive outbreak and enter a phase of high growth.
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Market Size and Leading Platforms:
- The cosmetics market size for the first half of 2023 was 407.2 billion yuan, with a 3.5% YoY growth.
- Taobao (part of Alibaba Group) led in online sales with 119.9 billion yuan GMV, surpassing the second-place Douyin (TikTok) with 1.57 times its GMV.
Platform Differences and Brand Presence:
- Substantial disparities in the top 20 brands on various platforms, with international brands dominating Tmall and JD.com.
- Notable contributions of GMV from foreign brands on different platforms: Tmall (85.6%), JD.com (93%), Douyin (59%), and Kuaishou (19.4%).
Regional Trends in Offline Sales:
- Northwestern region had the highest single-store output, while East China had the highest average order value.
- Northeastern region had the highest average number of orders per store.
Mainstream Category Analysis:
- Makeup products gained momentum on Douyin, while hair care products were popular on JD.com.
Investment Trends and Industry Focus:
- Beauty industry investment activity cooled down in the first half of 2023, with a 40.4% decrease in investment events compared to the previous year.
- Interest in startups remained, especially in raw material and medical aesthetics sectors.
Top Domestic Beauty Companies and R&D Investment:
- China’s top 10 beauty companies experienced intensified competition, with a total revenue of 42.39 billion yuan.
- R&D investments increased, indicating a growing focus on innovation.
Emerging Product Trends:
- Trends in new skincare products, including dual-use morning and evening products catering to different skin needs.
- Rise of low-saturation makeup products to meet the demand for natural-looking makeup.
- Increased demand for long-lasting and makeup-setting products.
