民族气息：中国香水品牌如何重塑身份

ContentsIntroduction-------------------------------------------------------------------------------------------------3Section I: The impact of COVID-19 on China’s beauty market-----------4Section II: Rising segments---------------------------------------------------------------------12Section III: Skincare----------------------------------------------------------------------------------19Section IV: Fragrances in China--------------------------------------------------------------26Section V: Digitalization----------------------------------------------------------------------------31Conclusions: 5 tips for beauty brands to stay relevant in China -----------35About Daxue Consulting----------------------------------------------------------------------------38 IntroductionAfter two years of the central government’s Zero-COVID strategy, China lifted most of its restrictions inJanuary 2023 and decided to adopt a “living with COVID-19 approach”, thus reopening the country toinbound travelers and fostering consumer confidence.The outbreak of the global pandemic boosted Chinese consumers’ interest in self-care and deeplychanged the beauty and personal care market. The local demand for makeup and skincare productsdiversified and premiumized, thereby untapping new opportunities for both homegrown and foreignbrands.New buzzwords, such as “anti-EMO”, “streamlined skincare”, and “mask makeup” gained popularity,driving consumption and growth. Moreover, increasingly more brands invested in e-commerce solutions,while a new class of offline multi-brand stores emerged.Last but not least, Gen-Z’s coming of age has morphed China’s fragrance market, fostering the emergenceof new trends. “Niche brands”, “domestic players”, “natural ingredients”, and “emotional value” are thekeywords better describing where China’s perfume market is going. Section I:The impact of COVID-19on China’s beauty marketThe COVID-19 pandemic acted as a catalyst, accelerating some of the pre-existing trends in China’sbeauty market as well as shaping new consumer habits. Now that China’s Zero-COVID strategy is over,which trends are bound to vanish and which ones are here to stay? The beauty sector in China before and afterthe COVID-19 outbreakSince 2015, China’s beauty market has grown fast, becomingtheworld’s second-largest beauty market by 2019at a marketsize of 425.6 billion RMB (62 billion USD).¹ In 2021, sales ofbeauty and personal care products reached around550-600billion RMB (80-87 billion USD), a 10% more than the previousyear.²Three key trends in China’s beauty market beforeCOVID-191. Chinese beauty goes premiumAs China’s household disposable income rose, people weremore willing to consume, and had higher requirements in termsof product quality. It is not surprising thatbetween 2013 and2018, the growth rate of the domestic high-end cosmeticsmarketrecorded a 28.1% rise year-over-year (y-o-y) in 2018.³Sources:1. China skincare market status and trends analysis in 2020https://fashion.ifeng.com/c/7v0KgWx35fP2.Recovery growth surge drives beauty in Chinahttps://www.euromonitor.com/article/recovery-growth-surge-drives-beauty-in-china3.China skincare market status and trends analysis in 2020https://fashion.ifeng.com/c/7v0KgWx35fP2. Social e-commerce platforms on the riseAn increasing number of Chinese consumers weremaking their purchases through social media platformssuch asXiaohongshu and WeChat. Both sellers and buyers in China especially appreciated social e-commerce because it allowedconsumers to purchase the items they were looking for without leaving the app, enabled them to interact directly withbrands, and gave them the chance to share their shopping experience with their circle of friends.3. Rising preference for domestic brandsDomestic beauty brands have risen strongly in recent years by leveraging social media marketing and e-commerce. Someof them such as Florasis have evencrossed national bordersand gained success abroad. 550-600 billion RMBof beauty and personal care salesgenerated in 2021 COVID-19 led to the emergence of new beautytrendsThe global pandemic undoubtedly hampered China’s beautyindustry. Although beauty sales have fluctuated,consumersreacted quite positively during promotional events in 2021and 2022.4COVID-19had varying degrees of impact on differentcategories in the beauty market: the epidemic had a morenegative impact on cosmetics, while skincare and personalcare products gained more popularity in this period.According to Quest Mobile,facial masks, skincare sets,serums,lotions/creams,and electronic beauty deviceswere the top five most sold beauty product categories onDouyin during August 2022.51. Skincare products gained great popularityamong Gen-ZsOne major change in beauty consumption after COVID-19was that people began to consume more skincare products.Due to the damage from wearing face masks for a long time,products with “skin repair”, “basic skincare” and “first-aidcare” functions gained popularity.6Gen-Z accounted