Updated: Oct 9, 2022
The biggest trend in the cosmetics industry in the future is to focus more on self-iteration.
The beauty industry has encountered various challenges this year. The total retail sales of consumer goods in China for cosmetics was 245.3 billion yuan(about $34.1 billion) from January to August 2022, down 6.4% year-on-year. However, China’s efficacy skincare market has been growing rapidly in recent years, with a compound annual growth rate of 23.4%, and is expected to reach 41.1 billion yuan(about $5.7 billion) in 2022. CHAILEEDO invited Li Qinya, the founder, chairman and CEO of MEISHANG, to share the Chinese cosmetic trends.
CHAILEEDO: From your perspective, what are the biggest trends in the cosmetic industry next year?
Lee: In recent years, the Chinese cosmetics market has achieved rapid development in a short period of time with the help of opportunities such as capital influx and new channel marketing, and has made amazing industry achievements. 2022, influenced by multiple factors, the cosmetics industry is feeling no small challenge from product development to marketing and promotion nodes, which means that strategies that were applicable in the past now need to be adjusted.
Based on this, I believe that the biggest trend in the cosmetics industry in the future is to focus more on self-iteration: providing consumers with better products by continuously improving quality. On the one hand, we will consolidate our product power and focus on internal cultivation of differentiated products with excellent quality and unique brand connotations; on the other hand, we will cultivate our brand communication power and focus on exploring interactive play and topic volume that will move consumers more.
Based on these thoughts, MEISHANG will continue to strengthen the product power with core competitiveness in product development, R&D and supply chain. In addition, we are also steadily building brand power and maintaining efficient linkage and interaction with consumers.
We are confident about the future: First, the trend of national beauty products in recent years has made more people pay attention to the industry, and a large amount of high-quality talent and resources bring sustainable momentum to the industry development. Second, the market is gradually returning to rationality, although short-term pressure but in the long run is conducive to the benign development of the industry; third, the consumer base advantage is beginning to appear, after the initial market education, beauty and skin care products consumers have a strong sense of national products and brands national pride and self-confidence. Now, it is necessary to traverse the cycle with the spirit of resilient growth, steady development, and sure to go far.
CHAILEEDO: What categories are you optimistic about next year and why?
Lee: With more and more entrants in the cosmetics industry, the competition in each segment is very fierce. In such a market environment, for consumers, there are very sufficient brands and categories to choose from, which then also promotes the iteration and upgrading of consumer demand.
Based on current observations, there is still a broad market in the future for beauty and skincare categories related to “super segmentation needs”. For example, the efficacious skin care category is one of the most promising markets. According to Frost & Sullivan, the size of China’s efficacious skincare market will be 56.7 billion yuan in 2021, with a growth rate of 33.6%, and is expected to maintain a growth of more than 30%. The efficacious skincare category is a high growth track with high market consumption potential.
CHAILEEDO: Traffic is getting more and more expensive, what is the new breakthrough point for brands?
Lee: Due to the impact of the epidemic on offline sales channels and environment, online channels and platforms have become the main position of brand marketing in recent years. As the cost of online traffic is getting higher and higher, the traffic ROI is reduced. How to break the “traffic trap” is also a problem that brands in the cosmetics industry are thinking about and exploring.
It is difficult to attract the attention of the public with the same content and marketing methods. As mentioned above, in the current market environment, brands need to refine their brand communication power, explore more interactive ways to move consumers and explore the volume of topics, and establish effective and positive connections and interactions with consumers. We think we still need to return to “content”. On the basis of solid products and services, brands need to explore users’ consumption pain points, gain deep insight into consumers’ psychology, and output quality brand content that can trigger emotional resonance and establish deep connections.
