Related News

Home » Business » Energy

Women still spend to look like a million dollars

THEIR pockets may not be bulging as they once did, but young women in China still want to look like a million dollars. That's proving a boon for the cosmetics and toiletries industry.

"I've bought fewer new clothes and had my hair done less often, but I haven't reduced my spending on cosmetics because I consider them a necessity in my daily life," said Vivien Tang, a Shanghai white-collar worker in a multinational company.

Tang is only one of many women who refuse to compromise their beauty even as an economic slowdown in China bites into consumer spending. International cosmetics companies have long regarded China as their strongest bet for growth, and vanity means vibrancy in sales despite a global recession.

Sales of makeup, skin-care products and other cosmetics in China ranked third in the world, behind Japan and the United States last year. The China Association of Fragrance, Flavor and Cosmetics Industries said it expects nationwide sales of 130 billion yuan (US$19.1 billion) this year.

Euromonitor International, a market research and consulting firm, is forecasting almost 11 percent growth a year in skin-care products in the five years ending 2013, while the growth rate for makeup in that same time period is pegged at almost 10 percent.

L'Oreal Group, the world's largest cosmetics and beauty company, achieved sales of 6.95 billion yuan in China last year, up 28 percent from a year ago. The French company said that equated to 35 percent growth in terms of the euro, given the strengthening yuan.

"We are confident China's cosmetics market will sustain a relatively fast growth, judging from the sales performance in the first quarter," said Paolo Gasparrini, president of L'Oreal China. But "growth might not be as fast as last year."

In fact, as individuals began to tighten their purse strings, industry analysts say they see evidence of the "lipstick effect," which refers to the tendency of consumers to purchase small, comforting items during a recession even if they have to cut back on more upscale spending.

"We are finding sales of (makeup) foundation in China enjoying faster growth than that of lipsticks actually,'" said Liang Weijia, director of communications for Sasa International Holdings Ltd, a leading cosmetic retailer in Asia. "Foundations are showing the fastest growth among cosmetics products."

Liang said skin-care products are also performing well. Sales of cosmetics in Sasa outlets chalked up double-digit growth in the first three months of this year.

"Chinese consumers pay a lot of attention to their skin," said Lillian Liu, director of public affairs and corporate communications at Estee Lauder China Affiliate.

"They are very interested in skin-whitening products, sun guards and anti-wrinkle creams," she said. "Seventy-five percent of cosmetics sales in China came from skin-care products, while in Western markets it's more 50-50. That's why you see pages and pages of skin-whitening products in magazines recently."

Indeed, the importance of skin care in the daily routines of many young Chinese women accounts for a large part of China's cosmetics market, said Liang.

"I still buy some cosmetics which I think are essential," said Xia Yulin, a young Shanghai worker who cares about her appearance as well as her purse even after her bonus was recently halved.

Avon joins Ungaro

"I choose whatever works best on my face and my skin, regardless of the brand," Xia said. "I would pick the cheaper one if two products both worked well for me."

Avon Products Inc launched the fragrance U by Ungaro for Her in February, in cooperation with the leading luxury brand Emanuel Ungaro, to cater to consumers who have had to tighten spending. The fragrance is sold for less than 200 yuan, much lower than most quality perfumes on the market.

"We wanted to introduce affordable luxury to fulfill young women's desire for beauty," said Nicole Pan, marketing director of Avon Products China.

Sasa International has also adjusted its product line to include more middle-priced products in a bid to drive up sales, and L'Oreal said it plans to develop more price-friendly products globally to compete in a tighter market.

It introduced skin-care products under the affordable Maybelline brand last year to snare the middle and lower end of the market.

"We see a balanced performance between the upper and lower ends of the market," Gasparrini said. "Chinese consumers don't seem particularly keen on mass-marketed goods and they don't want to give up spending on high-end products. Upmarket sales have remained fairly stable.''

Estee Lauder, whose five brands in China are all targeted at the affluent, said sales remain strong in Asia, and China maintained double-digit growth in the fourth quarter of last year. "China is strategic among emerging markets," Liu said.

L'Oreal is also upbeat and plans to introduce its upmarket Kiehl's line into the Chinese market in July.

"We have seen so many mainlanders go to Hong Kong to buy our products," said Joanna Lee, director for the Kiehl's brand. "So we decided to enter the market despite the ongoing financial crisis. We are confident about the market here."

Pollster Nielsen survey confirmed the resilience of the Chinese market. A recent survey found that 47 percent of respondents said the next 12 months will be a good time to buy things they need, while only 20 percent said they are switching to cheaper brands.

"I wear foundation, eye shadow and eye-liner to work everyday so that I look more professional," Tang said. "But I have been more careful in choosing cosmetics.''


Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend