Total Retail Sales of Cosmetics First-Time Decline in November

Chinese Double 11 Shopping Festival also failed to save cosmetics consumption.

On Dec. 15, the National Bureau of Statistics released the main data on total retail sales of consumer goods in November. The data shows that total retail sales of cosmetics saw a decline in November rarely, reaching 56.2 billion yuan (about $8 billion), down 4.6% YOY.

Since the beginning of this year, the Chinese cosmetics retail market has continued to be in a downturn. Chinese Double 12 Shopping Festival, which just passed, also seemed “quiet”. Many industry sources predict that the total retail sales of cosmetics will continue to decline in December due to the epidemic and the winter of retailing will continue for a while.

According to the latest data released by the National Bureau of Statistics, the total retail sales of consumer goods in November was 386.15 billion yuan (about $55.4 billion), down 5.9% year-on-year. From this dimensional data, the total retail sales of cosmetics in November were slightly lower than the total retail sales of consumer goods due to the impact of the Double 11 promotion, etc.

In this regard, the National Bureau of Statistics publicly stated that “by the impact of COVID-19 and other factors, the consumer market was significantly under pressure in November. The market sales decline has expanded. However, with the continuous optimization of the epidemic prevention and control measures, the consumer demand will steadily releases, shopping network trend further strengthened, the development of consumer market resilience will continue to show up.”

From an overall perspective, the total retail sales of consumer goods were 39.92 trillion yuan (about $5.7 trillion), down 0.1% year-on-year from January to November this year. The total retail sales of cosmetics were 365.2 billion yuan, down 3.1% year-on-year, not beating the general market, but the situation is still grim.

Looking back at the total retail sales of cosmetics from January to November this year, the total retail sales of cosmetics in China rose in only four months, January, February, June and July. But the rise was small with all in single digits.

The cosmetics industry has always had prosperity in September and October every year. Coupled with the continuous development of online e-commerce channels, the shopping promotion in each fourth quarter every year can also contribute to a larger revenue performance for beauty companies.

However, since August this year, the total retail sales of cosmetics have declined for four consecutive months, and the industry-wide Chinese Double 11 Shopping Festival has failed to save the sluggish cosmetics consumption. In November, the year-on-year growth rate of total cosmetics retail sales fell for the first time in nearly five years, according to CHAILEEDO.

All decline

The downturn in cosmetics retailing has also been met with a cold in imported cosmetics in China. According to data from the General Administration of Customs, imports of beauty cosmetics and toiletries in November this year amounted to 34,427.9 tons, down 14.26% compared with the same period last year. The import amount was 12.57 billion yuan (about $1.8 billion), down 11.54% year-on-year. From January to November this year, the cumulative import of beauty cosmetics and toiletries products was 388,671.5 tons, down 11.2% compared with the same period last year; the import amount was 138.64 billion yuan (about $19.9 billion), down 5.8% year-on-year.

An imported cosmetics trader told CHAILEEDO, “Imported beauty cosmetics have been struggling.” He said that the epidemic is only one side of the decline in the amount of cosmetics imports. The main factor is the macroeconomic regulation of the national economy. “Now the people have no money in their wallets, so the demand for imported cosmetics is declining year by year. There are fewer consumers are picking cosmetics inside the offline shopping mall.”

In addition, the cosmetics industry has seen declines of varying magnitudes from all areas since this year. According to research data from CHAILEEDO, in the first nine months of this year, overall sales in the online channel declined slightly compared to last year, with a monthly average sales decline of 0.4%. Also according to data released by Minsheng Securities, in November, the GMV of the Tmall beauty market was 57.8 billion yuan (about $8.3 billion), down 10% year-on-year, of which GMV of skincare was 47.7 billion yuan (about $6.8 billion), down 6% year-on-year, while GMV of color cosmetics reached 10.1 billion yuan (about $1.4 billion), down 23% year-on-year.

The decline in online platforms is obvious and offline stores are having a hard time. According to data from CHAILEEDO, the researched 13,000+ CS stores achieved total sales of about 830 million yuan (about $119 million) in November 2022, down 17.6% year-on-year. The number of customer orders was 7.089 million, down 21.1% year-on-year.

Entering the post-epidemic era

In recent years, the cosmetics industry has entered a period of accelerated reshuffling under the grip of new regulations overlaid with the epidemic. In December, the change in the epidemic prevention and control policy allowed many industry players to see the “dawn”. However, CHAILEEDO learned from a number of industry sources that they still have a negative attitude toward the national cosmetic consumption figures in December, “December is expected to decline even more than November” and “this year is not expected, let’s look ahead to 2023”.

For example, in the past Chinese Double 12 Shopping Festival, many brands and factories in charge said that they didn’t put much effort into this shopping festival. The pull of the promotion on business performance is “not obvious”.

A brand responsible said “There is only less than half a month’s time from policy liberalization to the Chinese Double 12 Shopping Festival. The recovery time for the industry is too short. Many companies are even too late to prepare in advance. Coupled with the overall consumer purchasing power has declined, the overall data this year are flatter.”

An OEM marketing director also said that many brands will focus on doing internal inventory and summary. Their main resources and energy were put into next year’s market expansion and sales channels. Basically, they will not have a big move in this year.

“If the market withstands the first wave of impact after the ‘opening’, consumption and customer flow should pick up after the Spring Festival, by the second quarter of next year at the latest.” An industry insider who has been engaged in cosmetics retailing for more than 30 years believes that.

In recent times, a number of industry insiders posted that the cosmetic industry has now truly entered the “post-epidemic era”.

In the post-epidemic era, the battle for brands is obviously long and arduous. But all in all, the cosmetic industry has been experiencing a 3-year-long “winter” and now the light has dawned. We just need to wait to survive the last wave of the “cold” and truly welcome the arrival of spring.



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