Five Key Personal Care Trends in China

China’s personal care market is growing rapidly over the past 10 years, and has been growing at a faster rate than the overall grocery market. The female population aged between 15 and 45 in Urban China currently exceeds 100 million, which is larger than the combined total of France and Spain.  This huge population combined with rising disposal income, growing aspiration for beauty and consumerism makes it one of the most attractive market sectors for both manufacturers and retailers. 

The global financial crisis that broke out in the second half of 2008 did hit China, leading to slowdown in overall grocery expenditure.  According to past experiences, economic crisis typically boost the sales of inexpensive cosmetic and person care items  So In time of economic uncertainty, what is happening to the buying trend of the Chinese consumers? Kantar Worldpanel reveals the following five key personal care trends that will carry through in 2010 and the years ahead.

1.Consumers are NOT cutting back amid the Economic Slowdown

It is true that throughout 2009 consumers are more careful about what they buy, and are more willing to delay purchases, shopping more frequently for deals or buy less of non-essential items.  However the overall personal care market growth remained robust, reporting a largely buoyant 7% growth in value term in the latest 12 months.  Kantar Worldpanel also indicates that price inflation - driven largely by the resilient market demand and expansion of their person care repertoire- was a key driver behind the growth. Consumers also are moving towards affordable luxury, and this trend drove growth of higher-tier mass products despite the maintenance of prestige market sector.

2.Consumers are also increasingly seeking value

While consumers are spending more on their personal care products, they are also that consumers are placing greater emphasis on value, and are willing to search for trustworthy performance at a reasonable price.  This means that brands with a strong value proposition tend to outperform their competitors during this period of time.  Kantar Worldpanel observed that consumers are willing to part with a higher cash outlay if larger pack sizes provide better value.  Upsizing trend accelerated in key personal care sectors e.g. shampoo, body wash, hand & body moisturizer as well as toothpaste where bigger pack size are taking a higher share of those markets.

3.Consumers are more getting sophisticated

Chinese consumers are increasingly catching up their counterparts in other mature Asian economies in using a wider and better range of personal care products to satisfy themselves.  For example, consumers are caring more and more about their skin.  Apart from using facial moisturizing products only, they are also using more toner, mask, make up removal, makeup base etc to protect their skins- all those sectors enjoyed a growth rate of over 20%.  Hand & body care growth rate reaches 27% in the latest 52 weeks, much faster than the overall skin care market (10%). At the same time, for each shopping occasion, we also found that facial and body care combination is one of the most popular choices when consumers purchase more products in a single shopping trip.

4.Male glooming is emerging

Personal care products targeted at male users are in strong growth, especially in categories such as hair care and facial cleansers. There is an increasing emphasis on male beauty, driven by improved distribution and in-store presence of key brands such as Nivea, Biore and L’Oreal Paris etc.  The latest Kantar Worldpanel report on facial skin care markets indicated the male sector reached a penetration of 13.6% in the latest 52 weeks, though 75% of the sales were contributed by facial cleansing products.  Major brands’ “for men” line-extensions have been one of the most important male-consumer oriented launches in recent years, with key shampoo players like Clear and Hand & Shoulders launching their male line to widen their appeals.

5.Going Hyper and online

Shopping beauty products in department stores and specialist can be fun and enjoyable to many females.  Yet with the further expansion of hypermarkets to 2nd/3rd tier cities, the one-stop shopping channel continued to grow in popularity, not only in the its traditional strongholds like hair care and oral care, but also in the emerging color cosmetic categories.  The value contribution of hypermarkets for color make up already moved from 11% in 2008 to 13% in 2009.  Another striking fact is that explosive growth of home/internet shopping for person care markets.  While internet shopping already becomes part of life for many young urban dwellers, Kantar Worldpanel reveals that the contribution of value purchase from internet grew from 1.3% in 2008 to 2.1% in 2009, with over 80% of the purchase spend were made on skin care and make up products.

Today’s Chinese consumers are evolving rapidly in how they shop and how they use personal care products, with growing urban population, the willingness to spend, and a younger generation grown up under a barrage of branding and advertising.  Contact Kantar Worldpanel team to understand further how those five key trends are shaping the future for your brand and market