“So many consulting clients, no time for lunch.” “It’s not convenient for me to do an interview right now, as I have clients I’m currently negotiating with.” After a three-year hiatus, the Cosmoprof Asia has finally returned to Hong Kong, and the bustling scene at the exhibition once again confirms the enormous potential of the Asia-Pacific beauty market.
As one of the most important international beauty expos in the Asia-Pacific region, and also a rare platform that connects the Chinese and Asia-Pacific markets with the global beauty industry, the Cosmoprof Asia this time has attracted over 2,400 exhibitors from 44 countries and regions.
As the Cosmoprof Asia returns to Hong Kong for the first time after the pandemic, the three-year hiatus undoubtedly signifies a wealth of market trends and interpretable information. So how do international beauty brands and upstream companies from countries like Japan, South Korea, Europe, and the United States perceive the Chinese market? What are the noteworthy trends in the global beauty market?
Behind the popularity boom: China’s foreign trade exports experience “two different worlds”
CHAILEEDO noticed that the Cosmoprof Asia this time continued the format of “two exhibitions in one location,” with the Cosmopack Beauty Supply Chain Solutions targeting upstream and downstream companies such as packaging materials suppliers, contract manufacturers, and raw material suppliers, and the Cosmoprof Asia targeting beauty and personal care brands.
Regarding the bustling scene at the event, the head of a Chinese domestic contract manufacturing company expressed to CHAILEEDO that last year’s Cosmoprof Asia was held in Singapore. Due to the impact of the pandemic, there were fewer Chinese exhibitors. After a three-year hiatus, the Cosmoprof Asia returned to Hong Kong, and Chinese domestic exhibitors who hadn’t attended for a long time showed great enthusiasm, hoping to “meet old clients and find new ones” at this exhibition. According to official data, there are as many as 437 Chinese exhibitors participating in the supply chain exhibition.
CHAILEEDO visited dozens of upstream and downstream exhibitors from China, Japan, South Korea, Europe, and the United States to get a glimpse of the current state of the cosmetics packaging materials and contract manufacturing market and the latest trends in products.
In terms of exhibitors, the Cosmopack Beauty Supply Chain Solutions mainly includes Chinese domestic contract manufacturers and packaging materials suppliers with some overseas business or a focus on overseas markets, as well as Japanese and South Korean upstream and downstream companies seeking Chinese clients at this exhibition.
STB, a South Korean eyeliner contract manufacturing company, told CHAILEEDO that their main purpose of participating was to seek cooperation opportunities with Chinese clients. However, they admitted that in the past, South Korea held an advantage in eyeliner manufacturing technology, but with China’s rapid progress in this area, the two sides’ capabilities are now almost on par, which puts pressure on their company.
In addition, several Japanese and South Korean contract manufacturers also expressed that China remains an extremely important market, and they will continue to consider the Chinese market as a strategic growth core for their business. They hope to find suitable Chinese partners at this exhibition to achieve breakthroughs in the Chinese market.
In terms of products, the breakthrough directions for makeup products include appearance, 3D printing technology, the fusion of skincare and makeup, and formula innovation, which have become important highlights. Skincare products show a clear trend towards gentle effectiveness and pure skincare. Among them, products that incorporate traditional Chinese culture and use traditional Chinese plant-based ingredients as their main components are popular overseas.
In terms of packaging materials, several well-known Chinese domestic and international packaging materials suppliers emphasized that environmental protection has become one of the most important trends in the development of cosmetic packaging. However, there are different approaches and attitudes towards environmental protection in China and abroad. In addition, replacement packaging, biodegradable materials, and environmentally friendly materials have become important forms of packaging development towards environmental protection.
Axilone’s China market department, responsible for packaging materials for global leading beauty brands such as Dior and Estée Lauder, told CHAILEEDO that in the post-pandemic era, international brands primarily focus on green and environmentally friendly packaging. However, due to the slowdown in the Chinese domestic makeup market, Chinese domestic brands mostly adopt a wait-and-see attitude towards environmental protection and prefer to attract consumers through limited edition packaging designs and launching multiple versions of products.
Another packaging materials supplier stated that Chinese customers pay more attention to functional and innovative packaging, while foreign customers have more basic requirements for product appearance and higher expectations for environmental protection.
For example, WWP Beauty, an internationally renowned beauty packaging materials supplier, focused on green and environmentally friendly themes at their booth and showcased various products such as PET and PP material packaging and biodegradable packaging. Jinsheng New Materials displayed their internationally certified calcium carbonate material packaging.
Combining Chinese culture, including Chinese ingredients, with overseas market demands has become a new highlight for companies going global. A Chinese domestic contract manufacturing company focusing on Latin America launched its own brand RICESLIK, using rice extract and rice powder as its main ingredients and incorporating Chinese cultural concepts into the products, with the appearance design featuring elements from the terraced fields of Guangxi to create differentiation.
It is worth mentioning that through visiting numerous domestic contract manufacturing company booths with a focus on foreign trade, CHAILEEDO found that their perceptions of the market vary significantly. Companies targeting the overseas mass market expressed concerns about intense competition and thin profit margins. On the other hand, contract manufacturers specializing in high-end products experienced good growth.
The head of a domestic contract manufacturing company Xindi primarily serving the European and American markets, as well as Russia, admitted to CHAILEEDO, “It’s tough now. Although the market has improved and order volumes have increased, intense competition has driven down prices, resulting in thin profit margins.”
The aforementioned person stated, “The reason for the intense competition is the global turmoil, which has caused certain markets to shrink, to the point where some companies can’t even collect payments in certain regions. This has led Chinese domestic contract manufacturers to focus more on the European and American markets, resulting in even fiercer competition and price pressure.”
Another OEM company that focuses on mass-market products expressed, “In the past two years, it has been challenging to do foreign trade, and the overseas market has also faced severe internal competition. The global economy has been affected by the pandemic, leading to a decline in consumer purchasing power.”
On the other hand, several OEM companies that position themselves in the mid-to-high-end market segment stated that they have not experienced a significant impact. Zhongshan Meidu, which primarily targets the European and American markets, mentioned that their product line is positioned as mid-to-high-end, and they have had good performance growth this year. While they haven’t felt the effects of internal competition, they acknowledged that customer demands for cost-effectiveness have indeed become higher.
It is worth mentioning that several domestic OEM manufacturers that focus on foreign trade stated that emerging markets such as South America and Southeast Asia have seen a rebound in demand after the pandemic and have become promising markets with impressive performance.
The enthusiasm of Japanese and Korean brands remains undiminished
For a long time, due to cultural affinity and a similar customer base, Japanese and Korean beauty products have been favored by Asian consumers, and Japan and Korea have always been among the top importers of cosmetics in our country.
However, compared to the previous success of Korean cosmetics in the Chinese market, Korean cosmetics have been declining in recent years, with many Korean brands withdrawing from the Chinese market. On the other hand, since the Japanese nuclear wastewater discharge incident in August this year, consumers have been concerned about the nuclear contamination of Japanese beauty products, resulting in many Japanese cosmetics being returned.
At the Hong Kong Cosmoprof Asia, it was noticed that Japanese and Korean brand merchants were still enthusiastic. Not only did they occupy a prominent position in the exhibition hall, but there were also a large number of participating brands. According to official data, this year, Japan and Korea respectively brought 20 and 253 selected exhibitors to the Cosmoprof Asia, showcasing the trends of Japanese and Korean beauty.
On-site, it was learned that the organizer of the Japanese exhibition group was the Japan External Trade Organization (JETRO), a government-affiliated organization dedicated to helping small and medium-sized Japanese companies maximize their global export potential. It is reported that the 20 Japanese companies participating in the exhibition mainly focus on cosmetics, personal care products, and home appliances.
From the perspective of Japanese exhibitors, many brands have launched anti-aging products. For example, Japan’s JNC Trading Co., Ltd. brought its flagship anti-aging brand. In addition, anti-aging products such as WRINKLE AI Anti-Aging Essence, WHITEST Anti-Aging Skincare, and CHRONO RHYTHM Essence were also showcased at this exhibition.
Similarly, the Japanese brand AXZIA’s products all focus on deep moisturizing and anti-aging effects. According to the the brand, which started with salon products, it now covers over 1,000 salon franchise stores in China. In addition to salon products, it also includes daily chemical products and oral beauty products.
It is reported that the organizer of the Korean exhibition group is the Korea Trade-Investment Promotion Agency (KOTRA), and the participating brands mainly focus on cosmetics and personal care products. Compared to Japanese cosmetics focusing on anti-aging, Korean cosmetics have a broader deployment in natural and medical beauty salon channels. For example, at this exhibition, the Korean pure beauty skincare brand IUNIK brought its popular Centella Asiatica series. The IUNIK brand told us that they focus on minimalist skincare and hope to provide consumers with highly effective and safe products through pure natural high-quality ingredients. They have developed cleansers, toners, essences, makeup removers, and other product categories.
Another major medical beauty skincare brand from Korea, ISOV, brought its latest Bomeisai series to the exhibition. By using the latest cosmetic permeation technology, all effective ingredients are encapsulated in microcapsules, which penetrate into the deeper layers of the skin, allowing the skin to better absorb nutrient components. It is introduced that ISOV entered the Chinese market in 2003 and mainly focuses on salon channels. This is its third participation in the Hong Kong Cosmoprof Asia.
In addition to Japanese and Korean brand exhibitors, there were also a considerable number of American and French participating companies. According to official data, the French Investment Agency brought over 80 French cosmetics companies to the French Pavilion. Among them, French perfume brand L.T. PIVER, professional skincare brand MEDICEUTIC, and functional skincare brand Laino all made appearances.
It is worth mentioning that at the Hong Kong Cosmoprof Asia, many niche countries such as Sweden and Malaysia also brought related products.
For example, Bigelius from Sweden showcased its men’s series and gender-neutral series. According to the staff of Bigelius, the brand focuses on anti-pollution, and all their products contain 40% bio-sugar gel, which forms a protective film on the skin surface to isolate pollution.
On the other hand, the well-known Malaysian beauty brand Empro Medibelle brought its new heavyweight anti-aging essence to the exhibition. Previously, Empro Medibelle beauty products were highly recognized and praised by the market due to their natural ingredients and unique patented designs.
Rise of Domestic Brands, Higher Entry Barriers for Overseas Brands in China
As an international exhibition connecting Chinese domestic and foreign beauty companies in the Asia-Pacific region, the Cosmoprof Asia serves as a barometer for China’s import and export cosmetics industry. In the current economic downturn and increased uncertainties, the active participation of exhibitors from various countries confirms that China, and even the Asia-Pacific beauty market, remains one of the most vibrant markets globally.
However, within this overall picture, there are different microclimates. For example, Chinese foreign trade OEM companies, which mainly serve the overseas mass beauty market, are struggling under internal and external pressures. Meanwhile, Japanese and Korean OEM companies actively embrace the Chinese market, and positioning themselves as mid-to-high-end OEM companies are thriving in the European and American markets.
From this exhibition, it can be seen that many overseas brands are exhibiting for the first time and have never entered the Chinese market before. They are currently planning to enter the Chinese market and express their hope to find agents and distributors in China or other markets through this exhibition.
For example, at the event, the representative of Meiyou Co., Ltd. expressed that their main purpose of participating in the exhibition is to seek cooperation opportunities and they are currently planning to enter the Chinese market. The AXZIA also stated that they have already established a subsidiary in Shanghai and plan to open subsidiaries in Hong Kong and Singapore.
At the same time, many brands believe that the Chinese market is developing rapidly, and domestic brands have improved in terms of product quality and performance, making them increasingly competitive.
The representative of Meiyou Co., Ltd. stated that Chinese consumers used to favor overseas brands because of the quality assurance of foreign products. However, currently, Chinese beauty brands have a competitive advantage. Firstly, they offer better value for money in terms of price, and secondly, the quality of domestic brands has also improved in recent years.
Overall, with the consensus that China is a key player in the global beauty industry, the Chinese cosmetics market remains a highly competitive arena that overseas brands cannot ignore. At the same time, with upgrading consumer preferences and the rise of domestic brands, the competition and challenges for overseas brands have become more intense, requiring them to innovate and differentiate themselves.