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China Cosmetics Industry Monthly Market Monitoring Analysis Report

China Cosmetics Industry Monthly Market Monitoring Analysis Report

Last Update:2014-05-03

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Recently, Biotherm, one of brand in China’s high-end cosmetics L’Oreal, has first entered in the third-tier cities, which opened in the International Trading Building, Yichang. At present, most high-end cosmetics products have become saturated, thus many of them extend their sales to the third and fourth-tiers cities, including Biotherm brand. From the decades of development history, the growth of cosmetics in the first-tier cities lags far behind that of the second and third-tiers cities. However, if a high-end brand hopes to gain success in low-tier cities, it must have enough brand recognition and quality assurance. Comparatively speaking, for high-end brands culture, the consumers in the first and second tiers are more easily to aware and accept; as to those consumers on the third and fourth cities, the enterprises need to spend more time in spreading their brand culture.

Currently, as to most high-end brands, the channels in the third and fourth-tiers cities are immature. There is no market experience to learn and follow, but China’s third and fourth-tier cities can provide huge and broad development space for the development of high-end cosmetics.

According to statistics, the need for moisturizing effectiveness of skin care products always ranks first. However, due to the simple effectiveness, low value-added and fierce competition of the products, many product with core for moisturizing are gradually out of the mainstream position, after consumption market upgrading.

With the recognition improvement of Biotherm, H20+, Clinique, etc. with moisturizing effectiveness, many value-added content and technologies are applied to the products, traditional moisturizing products enter into a fierce competitive stage, competing for high-end product market. Since the growth in the first and second-tiers has become saturated, many importing moisturizing high-end products are seeking growth opportunities in the second and third-tiers cities.

However, from the performance of China first-tier high-end cosmetics, the enterprises leading by well-known brand, aiming at creating moisturizing, anti-wrinkle and essence series products perform better than those aiming at developing moisturizing products for its differentiation brand. It shows that those enterprises which pursue differentiation brands should improve its production line and reshape their brands images The brands, such as Clinique and H2O+ begin to optimize their production lines, by bring out essence, oral collagen and other products to promote their brands image and recognition, so that they can get rid of the image with simple effectiveness products.

In addition, many people are worried whether the decrease of tax will shock the domestic brands. Analysts consider, the consumer group of importing cosmetics is middle and high-end personage. If the tariff decreases, foreign brands are cheaper in domestic country, then national brands will lose their advantages. With more and more foreign cosmetics brands enter China, the competition of national brands in China will further increase, and local brand cosmetics will face severe challenges.

Qianzhan Business Information Co., Ltd. Industry Research Center

Monitoring and Analysis Team of Cosmetics Industry


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