Page 302 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
important considerations for purchasing cosmetics opening e-commerce stores and social-networking
include: ‘product benefits/efficacy’ (66 percent), ‘brand’ accounts to interact with increasingly digital-savvy
(64 percent) and ‘word-of-mouth’ (60 percent). Young Chinese consumers (Xinhua, China’s Beauty).
respondents were more influenced by factors such as
‘word-of-mouth’ and ‘price’, while mature respondents Toys
were more attracted by ‘natural/organic/herbal
ingredients’ and ‘high-tech/biotech products. Women The total retail sales of toys and games in China have
in China have gradually formed the habit of putting on soared from 111.8 billion yuan in 2012 to 276.5 billion yuan
make-up. This is particularly true for younger women, in 2017, registering an average annual growth rate of 19.9
aged 20-30. The 88 percent of the age group putting on percent. In 2017, retail sales of traditional toys and games
make-up is higher than that of 31-45-year-old women, increased by 7.4 percent year-on-year to 74.43 billion yuan,
at 83 percent. Men are also beginning to care for their representing 26.9 percent of total market turnover, while
skin, with 63 percent using cleansing milk, lotion or face retail sales of electronic toys and games increased by 24.1
cream (HKTDC, China’s Cosmetics). percent year-on-year to 202.07 billion yuan, accounting
for 73.1 percent of total market turnover (HKTDC, China’s
The China cosmetic product market was valued at Toy). Toy purchases per child below 12 years old averaged
US$47.33 billion in 2017, and it is projected to reach 276 yuan, up 14.5 percent year-on-year. The sales of
a value of US$84.39 billion by the end of 2023, at a strollers, car seats and feeding bottles reached more than
CAGR of 10.12 percent during the forecast period 12.4 billion yuan, 4.3 billion yuan and 4.9 billion yuan, up
(2018 – 2023). Growing health issues and dry weather 16.8 percent, 24.1 percent and 20 percent year-on-year
conditions in China have resulted in increasing concerns respectively (Xinhua, China Sees).
over hair loss, and other skin-related problems. These
concerns have, in turn, led to the growth of cosmetic By 2022, China is expected to eclipse the US as the
products market in the country over the past few world’s biggest toy market. The growth is fueled by
years, with consumers willing to spend more to get the rising incomes up and down the economic ladder and
best products to meet their requirements. There is a middle-class parents seeking higher-priced, higher-
huge demand for cosmetics including hair shampoos, quality items for their children. Online sales now make
lipsticks, eyeliners, highlighters, colorants, and others. up 18 percent of all toy and game sales in China and
Consumer demand for enhanced functionality and eco- is expected to grow by 20 percent annually through
friendliness in cosmetic design is resulting in exciting 2022. Safety, a prime concern of parents everywhere,
innovations in the packaging and design of cosmetics has special resonance in China. In 2008, milk and infant
products. More women are joining the workforce, thus formula tainted with melamine sickened 300,000
driving the instinct of looking good at the workplace. babies and killed at least six. It’s hardly surprising that
Interestingly, the cosmetics industry has also witnessed in a survey by Hong Kong Trade Development Council,
a surge in demand among men, owing to factors such mainland toy buyers listed the absence of hazardous
as awareness, the importance of grooming, and the chemicals and a high level of product safety as top
presence of greater number of women at the workplace. concerns. The end of China’s one-child policy in 2016
Within the cosmetics category, hair is considered as is also expected to start driving demand, producing 2
the foremost element that establishes individual style million extra births every year. One area in which China
and spells a fashion statement. Thus, the industry has lags behind is in Star Wars collectibles and other toys for
witnessed demand for styling products and hair colors adults. It’s a huge business in the United States, where
greatly; consequently, the demand for anti-damage and toys for grown-up kids make up more than 40 percent of
repair products has grown (Mordor). the market, and Japan, where more than four out of five
adults have their own toys. In sharp contrast, 99 percent
Over 80 percent of beauty products sales in third- of the Chinese toy market is geared to children (Miller).
and-lower-tier cities are achieved through brick-and-
mortar stores, presenting a huge potential market. While the country’s traditional toy market is expected
Lower tier cities experienced a major boom of consumer to grow swiftly due to an expanding middle class,
spending, while mid-tier cities have exceeded key cities the vast majority of growth in China will come from
in cosmetics spending power. Both domestic and global mobile gaming as smartphone ownership continues to
beauty brands have stepped up online promotions by increase in the country, with 90 percent of households
302
important considerations for purchasing cosmetics opening e-commerce stores and social-networking
include: ‘product benefits/efficacy’ (66 percent), ‘brand’ accounts to interact with increasingly digital-savvy
(64 percent) and ‘word-of-mouth’ (60 percent). Young Chinese consumers (Xinhua, China’s Beauty).
respondents were more influenced by factors such as
‘word-of-mouth’ and ‘price’, while mature respondents Toys
were more attracted by ‘natural/organic/herbal
ingredients’ and ‘high-tech/biotech products. Women The total retail sales of toys and games in China have
in China have gradually formed the habit of putting on soared from 111.8 billion yuan in 2012 to 276.5 billion yuan
make-up. This is particularly true for younger women, in 2017, registering an average annual growth rate of 19.9
aged 20-30. The 88 percent of the age group putting on percent. In 2017, retail sales of traditional toys and games
make-up is higher than that of 31-45-year-old women, increased by 7.4 percent year-on-year to 74.43 billion yuan,
at 83 percent. Men are also beginning to care for their representing 26.9 percent of total market turnover, while
skin, with 63 percent using cleansing milk, lotion or face retail sales of electronic toys and games increased by 24.1
cream (HKTDC, China’s Cosmetics). percent year-on-year to 202.07 billion yuan, accounting
for 73.1 percent of total market turnover (HKTDC, China’s
The China cosmetic product market was valued at Toy). Toy purchases per child below 12 years old averaged
US$47.33 billion in 2017, and it is projected to reach 276 yuan, up 14.5 percent year-on-year. The sales of
a value of US$84.39 billion by the end of 2023, at a strollers, car seats and feeding bottles reached more than
CAGR of 10.12 percent during the forecast period 12.4 billion yuan, 4.3 billion yuan and 4.9 billion yuan, up
(2018 – 2023). Growing health issues and dry weather 16.8 percent, 24.1 percent and 20 percent year-on-year
conditions in China have resulted in increasing concerns respectively (Xinhua, China Sees).
over hair loss, and other skin-related problems. These
concerns have, in turn, led to the growth of cosmetic By 2022, China is expected to eclipse the US as the
products market in the country over the past few world’s biggest toy market. The growth is fueled by
years, with consumers willing to spend more to get the rising incomes up and down the economic ladder and
best products to meet their requirements. There is a middle-class parents seeking higher-priced, higher-
huge demand for cosmetics including hair shampoos, quality items for their children. Online sales now make
lipsticks, eyeliners, highlighters, colorants, and others. up 18 percent of all toy and game sales in China and
Consumer demand for enhanced functionality and eco- is expected to grow by 20 percent annually through
friendliness in cosmetic design is resulting in exciting 2022. Safety, a prime concern of parents everywhere,
innovations in the packaging and design of cosmetics has special resonance in China. In 2008, milk and infant
products. More women are joining the workforce, thus formula tainted with melamine sickened 300,000
driving the instinct of looking good at the workplace. babies and killed at least six. It’s hardly surprising that
Interestingly, the cosmetics industry has also witnessed in a survey by Hong Kong Trade Development Council,
a surge in demand among men, owing to factors such mainland toy buyers listed the absence of hazardous
as awareness, the importance of grooming, and the chemicals and a high level of product safety as top
presence of greater number of women at the workplace. concerns. The end of China’s one-child policy in 2016
Within the cosmetics category, hair is considered as is also expected to start driving demand, producing 2
the foremost element that establishes individual style million extra births every year. One area in which China
and spells a fashion statement. Thus, the industry has lags behind is in Star Wars collectibles and other toys for
witnessed demand for styling products and hair colors adults. It’s a huge business in the United States, where
greatly; consequently, the demand for anti-damage and toys for grown-up kids make up more than 40 percent of
repair products has grown (Mordor). the market, and Japan, where more than four out of five
adults have their own toys. In sharp contrast, 99 percent
Over 80 percent of beauty products sales in third- of the Chinese toy market is geared to children (Miller).
and-lower-tier cities are achieved through brick-and-
mortar stores, presenting a huge potential market. While the country’s traditional toy market is expected
Lower tier cities experienced a major boom of consumer to grow swiftly due to an expanding middle class,
spending, while mid-tier cities have exceeded key cities the vast majority of growth in China will come from
in cosmetics spending power. Both domestic and global mobile gaming as smartphone ownership continues to
beauty brands have stepped up online promotions by increase in the country, with 90 percent of households
302
