It is no secret that China is a key market the world's biggest brands. Wealth and demand for high quality beauty products in China has been growing over the last ten years. With these kinds of conditions, China is a gemstone in a sea of recession, so why are so many European and American cosmetics brands now struggling to capture the imagination and wallets of Chinese customers? KSF is based across America, UK and China so we have an insight to Chinese retail and design like no other in our sector.
The cosmetics industries are a prime example of the changes going on in Chinese business. Last year, the Chinese beauty industry was worth $26 billion, with men’s cosmetics and skin care becoming one of the largest areas of growth. So why is it that Western brands are finding it increasingly difficult to hold on to Chinese markets? Household beauty brand Avon has reported a 30% decline in profits this year and is continuing to close stores around China as a result Once upon a time; it was enough for a brand to boast of its American/European heritage to create a demand amongst Chinese customers. Shoppers are fast developing their own unique identity that brands are struggling to understand.
Chinese consumers are very aware of beauty products that also have pharmaceutical benefits. Natural and locally sourced beauty products have seen a big increase over the last few years, not only in China but across the world. Chinese shoppers are very savvy when it comes to choosing the right product from themselves and are leaning towards smaller China based companies. Beauty brands would be missing out massively if this kind of USP were omitted from their POP.
Getting the ‘selling environment’ of personal cosmetics is vital, as Chinese consumers are known to be fiercely loyal so getting the visuals of a brand spot on is even more important in Asian markets. It’s not unknown for brands to change the look and even the name of their brand to suit a Chinese audience. Even China’s most popular cosmetics brand, l'Oreal has shifted is strategy, pulling Garnier products out of the market to concentrate on Maybelline and Paris lines. In short Chinese consumers are practically beauty experts in their own right, retailers need to take them seriously and listen.