On April 13, Beijing time, Xiaohongshu, a Chinese social platform for a recommendation, released the Inspiration Book of Future Consumption in Beauty Industry with the first issue focusing on China’s beauty industry.
China’s beauty industry is expected to be good in its development. The market size has gradually increased from $35.758 billion to $68.048 billion from 2016 to 2021, with a growth rate of more than 90% in six years. The proportion of consumer goods in China’s social retail consumer goods has also increased from 0.69% in 2016 to 1% in 2021.
While the market size of China’s beauty industry has risen steadily and the growth space is broad, the competition is becoming more and more fierce, and traditional Chinese brands, international big names and China’s cutting-edge brands are caught in a scuffle. Xiaohongshu, a Chinese social platform for a recommendation, is a social media marketing heavyweight for beauty brands, and it is also an important position for beauty recommendations. On April 13, Beijing time, Xiaohongshu, a social platform for recommendation in China, released the Inspiration Book of Future Consumption in Beauty Industry (hereinafter referred to as the Inspiration Book), with the first issue focusing on China’s beauty industry.
According to the Inspiration Book on Xiaohongshu, the users of the Xiaohongshu are mainly women, with women accounting for 89% and men accounting for 11%, with the majority of users being females. Fifty-five percent of Xiaohongshu’ users are concentrated in the second-tier cities such as Wuhan and Changsha with more young groups under the age of 34, and users of Xiaohongshu are inclined to be young.
In 2021, the boom of “applying Vitamin C in the morning and Vitamin A in the evening” as well as “applying the Salicylic acid” drove ingredient-related searches to increase by over 216% year-on-year on Xiaohongshu. There is a growing focus on cosmetic contact lenses, with searches up 57% year-on-year in 2021.
It is worth noting that the beauty trends or beauty products that are loved by users on Xiaohongshu also shine in the sector of investment and financing. The keywords such as “Chengfendang” (the group of people concentrating on cosmetics ingredients) and “cosmetic contact lenses” triggered heated discussion on Xiaohongshu in 2021, which also became popular in the sector of beauty investment and financing in the same year.
In 2021, the skincare category completed 33 financings, of which the number of rounds of 100 million yuan (about $16 million) reached seventeen. The main efficacy and ingredients of Chinese skincare brands such as ZHUBEN, LAN and Simpcare completed 2 rounds of financing within one year, and the ingredient trend drove the investment fever of all categories.
The Chinese cosmetic contact lens brands like Moody, 4iNLOOK and kilala have received nearly 2 billion yuan (about $314 million) in financing a year, of which Moody has raised three rounds of financing a year. The “half-face makeup” getting crazed under the pandemic allowed investors to discover a new sector for eye beauty products.
As an important platform for beauty products recommendations, Xiaohongshu is one of the users’ favourite vertical categories to search, and the average exposure ratio of beauty notes search in the past six months is 1.6 times the average of all vertical categories. For many beauty users, doing a search on Xiaohongshu before buying beauty personal care products has become a habit.
According to the Inspiration Book, the four major beauty trends in 2022 are efficient skincare, high-end makeup, single product Diediele (the stacking use of single beauty and personal care products) and de-genderization. Efficient skin care represents users prefer practical functional products, and related topics such as the search for “streamlined skincare” and “skincare pyramid” have increased by 170% and 560% respectively on Xiaohongshu.
Couture beauty represents users who need more personalized and customized makeup, related topics such as the search for “how to judge olive peel”, ” the makeup for square face and round face ” and “face folding” on Xiaohongshu increased by 470%, 1100%, and 163% respectively.
Users hope that when the two single products are superimposed, the effect can be better, and related topics such as the search for “lip oil stacking” and “perfume spray stacking” have risen by 135% and 82% respectively on the search on Xiaohongshu.
De-gendering is because men are becoming a new force in beauty, more cosmetics are added to the shopping cart by men, and related topics such as the search for “male’s eyebrow shape” and “tone-up cream for males” have risen by 130% and 354% respectively on Xiaohongshu.
Although China’s cosmetics market shows a steady growth trend as a whole with the reputation as the second-largest cosmetics market in the world, there is still a certain gap between China’s beauty industry and the industries in European, America, Japan and Korea in terms of the annual per capita expenditure and the number of listed companies. In 2020, China’s annual per capita expenditure on cosmetics is about $94, which is 1/4 of the average annual per capita expenditure of the United States, Japan and South Korea. According to the statistics, there are currently fifteen listed companies in the field of beauty and personal care in China, while there are 31 in the United States, and the number of listed Chinese beauty companies is less than half of the US market.
From this point of view, Chinese beauty brands still have a long way to go.