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Online Beauty Sales Slated to Top $20 Billion in China by 2016, Reports Kline

PARSIPPANY, NJ, APRIL 23, 2012 –

According to the new report Beauty Retailing Through Direct Sales in Emerging Markets 2011: Channel Analysis and Opportunities from worldwide consulting and research firm Kline & Company, beauty sales through the Internet in China have been growing at a rate of nearly 200% since 2006 and are estimated to be worth nearly $8 billion at the retail sales level in 2011, making it the largest Internet beauty market in the world.

“This news is astounding,” remarks Karen Doskow, Industry Manager at Kline, “and to put this into perspective, Chinese online beauty sales in 2011 are nearly equal in size to the entire beauty market for France, which is the largest market for cosmetics and toiletries in Europe. Furthermore, Chinese Internet beauty sales are nearly nine times larger than the U.S. Internet beauty market.”

Undoubtedly, marketers and retailers alike will be wondering how did this market get so big. “The rapid growth of Internet usage over the past five years has given way to a tremendous surge in sales and availability of local and foreign cosmetic and toiletry brands,” explains Li Wang, Vice President of Kline Asia. “The number of online users and buyers in China has skyrocketed. Internet user numbers in China approached 457 million in 2011, up from 137 million in 2006. Online buyers now total some 205 million in 2011.”

Further driving the online phenomenon are cosmetics “e-malls,” such as Tiantian.com and Alibaba’s Tmall in China, that enable customers to buy from a wide range of domestic and foreign skin care and makeup brands in a convenient one-stop shop. “We expect the growth of these portals to remain quite robust, driven by continually improving socio-economic dynamic, as well as an increasing appetite for Internet convenience among all consumers,” adds Doskow.

The popularity, uptake, and success of e-commerce offers is driving companies once focused exclusively on person-to-person sales to embrace the online shopping potential. In some markets, consumers may purchase through an individual consultant’s online storefront, effectively marrying the personal interaction and trust upon which the direct model was built with new consumer shopping habits. According to Kline’s research, the person-to-person model is still dominant in Brazil, the largest BRIC market where players like Avon and Natura are entrenched. Although the online beauty business is growing, consumers in this market still prefer the personal attention afforded by a consultant.

Kline’s Beauty Retailing Through Direct Sales in Emerging Markets 2011: Channel Analysis and Opportunities is the first of its kind research that looks exclusively at beauty sales by company, product category, and sub-channel through the direct channel in the BRIC markets. Given the robust 19.9% CAGR the BRIC markets have experienced through 2011, this report is both timely and invaluable.

About Kline
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit www.KlineGroup.com.

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