From 2022 to 2026, the market size of China’s natural plant essential oil industry is expected to grow by nearly 74%, reaching approximately 18.36 billion RMB, a significant increase compared to the estimated size of 10.58 billion RMB in 2022.

Rising Trend on Online Platforms: Using essential oils as an example, oil-based skincare products have shown an upward trend in Gross Merchandise Value (GMV) on various online platforms. For instance, on the Douyin platform, GMV for essential oils/pure extracts showed a year-on-year growth of 71.7% in January-February 2023, reaching 215 million RMB. The average unit price was 105.1 RMB, a year-on-year decrease of 24.4%.

Competition in Niche Markets 

While the oil-based skincare market is still in its early stages in China, several brands have actively entered various niche markets within this category, striving to gain market share and anticipating future growth.

Consumer Insights

• Age Disparities: Consumer attitudes toward oil-based skincare vary by age. Over 60% of consumers aged 26 and above favor oil-based skincare, while this percentage drops to 40% among those under 26. 
• Emphasis on Natural Safety: 57% of respondents expressed a liking for the concept of oil-based skincare, while 43% did not. Consumers tend to choose oil-based skincare products that promote natural plant-based formulations. 
• Seasonal and Climatic Factors: Seasonal and climate conditions remain key factors influencing consumer choices of oil-based skincare products. 59% of consumers prefer using such products during winter, while only 17% opt for them during the summer.

Future Developments

• Promotion of the Oil-Based Skincare Concept: Comprehensive promotion of the concept is needed, as 43% of surveyed individuals did not accept the oil-based skincare concept, primarily due to concerns about product texture. The concept still faces knowledge gaps, especially in the domestic market, necessitating influential brands to educate and increase awareness among consumers.
• R&D and Skin Texture Optimization: Brands should focus on optimizing product textures to provide formulations that are refreshing and effective. Additionally, research should prioritize pure plant-based formulations to meet consumers’ demands for natural safety.
• Breaking Seasonal Limitations: Product design needs to address the issue of seasonal dependency to attract more consumers year-round.
• Opportunities for Domestic Brands: Emerging domestic brands, especially those leveraging digital marketing and online channels, have the opportunity to gain market share rapidly. As they establish brand recognition and scale, they should consider exploring offline consumer markets to avoid intense online competition.

Key Data Highlights:

• Estimated market size of oil-based skincare products in the Asia-Pacific region in 2022: 139.3 billion RMB.
• Estimated market size of China’s oil-based skincare products in 2022: 48.8 billion RMB.
• Predicted market size of China’s natural plant essential oil industry in 2026: Approximately 18.36 billion RMB.
• GMV of essential oils/pure extracts on Douyin in January-February 2023: 215 million RMB, with a 71.7% year-on-year growth.
• GMV of essential oil products on Tmall in January-February 2023: 1.058 billion RMB, with a 16.2% year-on-year growth.