Beauty Specialty Stores and Direct Sales Channels in China

Catching Up to the Chinese Beauty Consumer

It’s no secret that China is the number-one priority for many beauty marketers, and a CEW event held last week dives deeper into the subject. The panel of speakers in the How to Win in China’s Beauty Market event all agreed on the fast pace of the environment and that it changes in a “blink of an eye.” To effectively market in China, rules must be broken. P&G Beauty’s Freddy Bharucha, one of the panelists, said a non-traditional approach had to be taken to turn around the iconic Olay brand in China: “We cut advertising, cut the collection down, and cut counters.”

Our recently published Beauty Retailing China: Analysis and Opportunities in the Direct Sales and Specialty Stores Channels report shows just how important non-traditional channels are in China. Technology is driving market sales, narrowing the gap between physical services at the beauty counter and virtual experiences. Advanced technology, such as virtual reality and artificial intelligence, is creating a new shopping environment. Today’s Chinese consumer is light years away from the “made in China” generation.

Our report also reveals that spending on beauty products in the direct sales and specialty stores channels combined accounts for nearly 50% of the $59 billion market, up 23% compared to the prior year. Both offline and online channels register rapid growth as marketers often use a mix of these outlets to educate, entertain, and capture transactions. The Internet is the largest and fastest-growing sub-channel with considerable growth of 33%. Specialty store sales advance more than 13% between 2017 and 2018, reaching retail sales of almost CNY 94 billion (USD 14 billion) in 2018.

Skin care is the leading category of sales in the Chinese beauty equation. Wei Bryan, one of the speakers at the event, quipped, “In China, skin is like tofu,” reflecting the overall importance of the category and consumers’ willingness to spend at high levels for products they deem worth the money. The combined door count for beauty multi-brand and single-brand focused specialty stores exceeds 60,000 doors in China in 2018—more than seven times the number found in the United States—and many of these stores offer consumers a personalized approach to skin care solutions.

Beauty Retailing China: Analysis and Opportunities in the Direct Sales and Specialty Stores Channels provides a clear view of the hard-to-track and dynamically growing direct sales and specialty stores channels in China. This analysis delivers actionable information on each purchase channel and sub-channel for product categories like fragrances, hair care, makeup, and skin care. It also explains the business practices and strategies of specific types of retailers, supported by profiles of key direct and specialty retailers, as well as up-and-coming ones.

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