From January 2021 to February 2022, the average monthly growth rate of the TikTok market was 10.32% and the average monthly growth rate of TikTok’s beauty category was 25%, which was much higher than that of the entire TikTok E-commerce market. In February this year, the sales of TikTok’s beauty industry increased by multiples compared to February last year. In February this year, the growth rate was 21.55% compared with that in January. The TikTok e-commerce beauty industry is in a stage of good development.
With the increasing demand for beauty and individuality among Chinese consumers, the beauty industry has ushered in a positive trend in China. According to the data from the National Bureau of Statistics, the Chinese cosmetics industry accounted for 1.02% of the annual market consumption in 2021 with the sales of cosmetics growing by 14% year-on-year compared to 2020, exceeding the year-on-year growth rate of the overall consumption in the Chinese market. Cosmetics occupy a small share of the overall market consumption as they are not necessities for the daily life of the Chinese people. However, with the awakening of more and more young people’s awareness of “beauty” and the enhancement of their spending power, the current cosmetics industry has been promoted. There is still room for growth in the consumer market.
In just a few years, TikTok e-commerce has become one of the largest sources of business growth in China’s beauty industry. From promoting goods sales in the form of short videos and live streaming by influencers to the official announcement of interest in e-commerce, this rapidly evolving platform has also brought more growth opportunities for beauty brands. From January 2021 to February 2022, the average monthly growth rate of TikTok’s broader market is 10.32% with the average monthly growth rate of TikTok’s beauty category being 25% and the growth rate of TikTok’s beauty category being higher than that of the entire TikTok category.
Since last year, the live streaming has built the daily sales base of TikTok e-commerce for many beauty brands, which has become one of the most important GMV incremental sectors. From January 2021 to February 2022, the TikTok e-commerce beauty industry has maintained a good growth rate, and the main increase comes from live streaming. Due to the e-commerce activities set up by the TikTok platform, the TikTok beauty industry will refresh the historical high point of sales in the current month. The sales data in February this year increased exponentially compared with February last year. In February this year, the TikTok beauty industry increased by 21.55% in sales revenue month-on-month compared to January. And the TikTok e-commerce beauty industry market is in an upward growth stage.
From the perspective of consumers, female consumers account for more than 80% in terms of viewing live streaming and transactions, indicating that in the TikTok beauty category, female users have strong content consumption power and commodity purchasing power. In terms of age, users aged 18 to 23 have stronger purchase intentions, and consumers aged 24 to 30 are more inclined to content consumption. From the perspective of cities, users in China’s new first-tier cities watch live streaming the most, while China’s second-tier cities and above have the most transactions, accounting for as high as 90%, while the small-town and rural market needs to be penetrated.
According to the official classification of TikTok, the beauty category is divided into 4 first-level categories: “makeup/perfume/beauty tools”, “beauty skincare”, “beauty/personal care equipment” and “beauty body medical equipment”. From the monthly sales data, from January 2021 to February 2022, “beauty and skincare” accounted for 75% of TikTok’s beauty industry sales, ranking first, with monthly sales increasing steadily throughout the year. Followed by “cosmetics/ Perfume/beauty tools “, accounting for 22% of the sales revenue in the beauty industry, ranking second. The sales revenue of “beauty/personal care equipment” accounted for 2.53% and the current market volume of “beauty and body medical equipment” is small, with only 0.14% sales revenue of the total.
It is worth mentioning that facial skincare ranks first in TikTok’s beauty industry, accounting for 62.55% of TikTok’s secondary category sales revenue. Facial makeup is the most important subcategory of all makeup, accounting for 9.92% of sales revenue in TikTok’s secondary category. It can be seen that the demand for skin care is significantly higher than the demand for makeup as users pay great attention to the maintenance of the overall face. This is because the skin around the corners of the eyes is relatively thin and the deterioration of the skin condition will first be reflected in the eyes, so some users have certain eye care demands. And with the popularity of sunscreen products in recent years which can prevent UV sunburn and protect the skin, as an indispensable part of daily skincare, the sales volume is also increasing.
From January 2022 to February 2022, 200 yuan (about $31) and 400 yuan (about $67) are the watersheds in the pricing of TikTok beauty and skincare products. The price of goods that is less than 500 yuan (about $77) are mostly Chinese brands with the average CR3 being 15%, while the prices of goods above 500 yuan (about $77) are dominated by international brands with the average CR3 being 36%. This shows that in the TikTok skincare industry, Chinese beauty brands tend to be affordable and friendly to consumers with a relatively weak brand concentration. The international brands tend to aim at the high-end market with a relatively high industry concentration and less competition. (CR3: Brand CR3 refers to the sum of the market shares of TOP3 brands in a certain industry.)
Among the TOP50 sales of TikTok e-commerce cosmetics, the number of Chinese brands accounted for 72% with the sales revenue of Chinese brands accounting for 82%. Chinese cosmetics brands performed well. Through the analysis of brand CR3 in each price segment of the product, the brand concentration of the cosmetics industry is significantly higher than that of the entire beauty market, and users are more trusting of brands. In the part of the product price above 400 yuan (about $67), the brand CR3 is as high as 50% or more, and the advantages of Chinese brands such as Florasis, PRAMY, and MAOGEPING are becoming growingly obvious.
As the portal for merchants to undertake online traffic, the most important core function of brand live streaming is product sales. However, with the normalization of live streaming e-commerce, brand live streaming has become an online real-time window for businesses to face users and industries. Judging from the number of live streaming (from June 2021 to February 2022), the TikTok beauty industry had a high output of live streaming content in the fourth quarter of 2021 and maintained a monthly increase in the fourth quarter. In 2022, due to the logistics outage during the Spring Festival and holidays, the data in January and February this year decreased slightly compared with the fourth quarter of 2021. From the perspective of live streaming, it reached its peak in October 2021 and then decreased month by month.
Judging from the number of short video releases (from January 2021 to February 2022), the content release volume of short videos is relatively stable and average throughout the year with the corresponding beauty video viewing volume being also increasing, indicating that users’ demand for beauty content is still in an increasing. quantity status.
TikTok e-commerce live streaming has been incorporated into the long-term planning of e-commerce business by more and more brands. It even carries some public relations and information publicity functions. Based on the “promoting goods sales field”, it has also become a “detonation field” for new product incubation, user mental education and spokesperson official announcement.