China's beauty industry looking good

China's beauty industry looking good

CHINA - Cosmetics usage has a long history, not only in China but in the world. Evidence of ritual body painting using red mineral ocher have been found going back thousands of years to the Stone Age. Ancient Egyptian and Greek civilisations used cosmetics to treat wrinkles with ingredients such as beeswax, frankincense, honey and herbs.

Since ancient times, Chinese have related a white complexion with nobility and power since a dark complexion indicated manual labour in the fields. To achieve the desired effect, women used white face powder and darkened their eyebrows. During the Han Dynasty, women used rouge on their lips, while in the Tang Dynasty; they put black dye on their lips. Going as far back as 3000 BC, Chinese women coloured their fingernails with a mixture of gum arabic, gelatin, beeswax and egg white. In different dynasties, the colours varied according to status.

The cosmetics industry encompasses a wide variety of products and many companies. Globally, skin care creams, lotions, face masks and so on represent more than a quarter of sales, while hair care products such as shampoos and conditioners represent about 20 per cent.

Make-up, sometimes referred to as the colour cosmetic market, including foundation, eye shadow and lipstick, also accounts for about 20 per cent. Fragrance makes up 10 per cent of global sales, while many other products such as sunscreens and deodorants make up the balance.

The world's largest cosmetics market is the United States with annual sales of US$55 billion. Although North America and Western Europe each account for just over 20 per cent of the global cosmetics market, the Asia-Pacific region is the largest, accounting for about 35 per cent.

With China becoming more and more urbanised and per capita incomes rising, it is not surprising that China has been catching up with the US in terms of cosmetics consumption. Annual sales growth in China, of beauty and personal care products, is averaging 15 per cent and is expected to reach US$38 billion this year. The 15 per cent growth is far above the single-digit global cosmetic sales growth.

Unlike the rest of the world, where skin care products represent less than 30 per cent of the market, in China, skin care represents 40 per cent of the cosmetics and toiletries market.

About 90 per cent of China's cosmetics market is dominated by foreign brands. Procter & Gamble is the largest player with a 15 per cent of the market, followed by L'Oreal with just over 10 per cent.

Another big player is Beiresdorf with its famous Nivea brand. Children's skin care is a growth area with products by Johnson & Johnson dominating over 80 per cent of the market. The men's skin care market is one of the fastest growing categories, with sales growing more than 20 per cent annually.

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