Page 304 - 2020 White Paper on the Business Environment in China
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0 White Paper on the Business Environment in China
new consumption. About 80 percent of consumers years. In 2018 the cosmetics market in China was
search for information online and purchase offline, worth over US$ 26 billion. Growth of the cosmetics
30 percentage points higher than the global average. industry in China is driven by rising disposable
People in third and fourth-tier cities are also incomes and an increase in beauty consciousness.
becoming new consumers because they have more The huge demand has attracted many enterprises
access to luxury goods both through offline stores to the cosmetics industry in China, consequently
and e-commerce. Global luxury goods companies creating intense competition between brands.
have invested more in marketing and localization in Among the top 10 cosmetics players in China, 7 are
China, with targeted designs, frequent exhibitions international brands. Collectively, the international
and promotional events, as well as inviting Chinese cosmetics brand hold a 61.5 percent share of the
idols to be brand spokespersons. Although 88 cosmetics market in China. Despite the relatively
percent of consumers still purchased goods in higher prices of international cosmetics, Chinese
offline stores, online channels offer great potential consumers are drawn to international brands
for the future (Chen, Consumption). because of brand name recognition and perceived
effectiveness of the product.
Cosmetics
However, international and domestic cosmetics
Chinese cosmetics market witnesses the brands alike are subject to strict government
burgeoning online sales. The penetration rate of regulations. The Chinese government first began
online cosmetics has been on a rapid rise in China regulating cosmetics products in 1990 and has since
since 2009, hitting 25.3 percent in 2018. China’s released dozens of laws and ordinances relating to
online penetration rate of cosmetics will range at 31.4 the cosmetics market in China. The most important
percent in 2022. From the perspective of Chinese regulation that governs cosmetics production and
cosmetics consumers, people born in 1970s-1990s company operations in China is the Regulations on
are the leading force whose consumption accounts Hygiene Supervision of Cosmetics, which was last
for nearly 90 percent, of which nearly 40 percent updated in August 2018. Before cosmetic products
is contributed by those born in 1980s. In addition can be manufactured in or imported to China for the
to traditional gifts such as flowers and chocolates, first time, companies must conduct their own safety
“imported cosmetics”, especially lipsticks, have assessment. The assessment must be carried out by
become a new option for gifts, with the sales volume a responsible person in charge of safety and quality,
soaring by 76.5 percent year on year. In recent who has at least five years’ experience working in
years, people born between 1995 and 2000s have cosmetics manufacturing or quality management
the growing demand for cosmetics as they enter and has specialist knowledge in medicine, pharmacy,
colleges, universities and the society. Compared with chemistry, toxicology, chemicals, and biology. After
other age groups, they are keen on online shopping the safety assessment, manufacturers can obtain
with changing demand, diversified brand preference an application for a Hygiene License of Imported
and focus on both high-end and affordable brands. Cosmetics from the Chinese Hygiene Administration
They were also brought up in Chinese and foreign Department. Upon receipt of the application, the
cultural turmoil, but they have more confidence Hygiene Administration Department will inspect
in Chinese culture. Changes in demographics, the products in question with their own cosmetics
consumption upgrades, skin care and makeup safety panel (Daxue Consulting).
habits will be crucial to the future Chinese cosmetics
market. Japanese, Korean, European and American Also in 2018, China’s National Institute for Food
brands have long dominated the cosmetics market and Drug Control (NIFDC) issued a statement
in China. In 2017, only three Chinese brands ranked about its commitment to overhauling testing in the
among the top ten cosmetics brands in China, while cosmetics industry and exploring viable alternatives
the rest were foreign brands (Reportlinker). to animal tests that are commonly used in countries
where the practice is banned. The NIFDC emphasized
China is second only to the US when it comes to that research, development, and the standardization
cosmetics. That will reverse in the next couple of of testing methods that don’t use animals are its top
priorities. Animal-protection organizations have
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new consumption. About 80 percent of consumers years. In 2018 the cosmetics market in China was
search for information online and purchase offline, worth over US$ 26 billion. Growth of the cosmetics
30 percentage points higher than the global average. industry in China is driven by rising disposable
People in third and fourth-tier cities are also incomes and an increase in beauty consciousness.
becoming new consumers because they have more The huge demand has attracted many enterprises
access to luxury goods both through offline stores to the cosmetics industry in China, consequently
and e-commerce. Global luxury goods companies creating intense competition between brands.
have invested more in marketing and localization in Among the top 10 cosmetics players in China, 7 are
China, with targeted designs, frequent exhibitions international brands. Collectively, the international
and promotional events, as well as inviting Chinese cosmetics brand hold a 61.5 percent share of the
idols to be brand spokespersons. Although 88 cosmetics market in China. Despite the relatively
percent of consumers still purchased goods in higher prices of international cosmetics, Chinese
offline stores, online channels offer great potential consumers are drawn to international brands
for the future (Chen, Consumption). because of brand name recognition and perceived
effectiveness of the product.
Cosmetics
However, international and domestic cosmetics
Chinese cosmetics market witnesses the brands alike are subject to strict government
burgeoning online sales. The penetration rate of regulations. The Chinese government first began
online cosmetics has been on a rapid rise in China regulating cosmetics products in 1990 and has since
since 2009, hitting 25.3 percent in 2018. China’s released dozens of laws and ordinances relating to
online penetration rate of cosmetics will range at 31.4 the cosmetics market in China. The most important
percent in 2022. From the perspective of Chinese regulation that governs cosmetics production and
cosmetics consumers, people born in 1970s-1990s company operations in China is the Regulations on
are the leading force whose consumption accounts Hygiene Supervision of Cosmetics, which was last
for nearly 90 percent, of which nearly 40 percent updated in August 2018. Before cosmetic products
is contributed by those born in 1980s. In addition can be manufactured in or imported to China for the
to traditional gifts such as flowers and chocolates, first time, companies must conduct their own safety
“imported cosmetics”, especially lipsticks, have assessment. The assessment must be carried out by
become a new option for gifts, with the sales volume a responsible person in charge of safety and quality,
soaring by 76.5 percent year on year. In recent who has at least five years’ experience working in
years, people born between 1995 and 2000s have cosmetics manufacturing or quality management
the growing demand for cosmetics as they enter and has specialist knowledge in medicine, pharmacy,
colleges, universities and the society. Compared with chemistry, toxicology, chemicals, and biology. After
other age groups, they are keen on online shopping the safety assessment, manufacturers can obtain
with changing demand, diversified brand preference an application for a Hygiene License of Imported
and focus on both high-end and affordable brands. Cosmetics from the Chinese Hygiene Administration
They were also brought up in Chinese and foreign Department. Upon receipt of the application, the
cultural turmoil, but they have more confidence Hygiene Administration Department will inspect
in Chinese culture. Changes in demographics, the products in question with their own cosmetics
consumption upgrades, skin care and makeup safety panel (Daxue Consulting).
habits will be crucial to the future Chinese cosmetics
market. Japanese, Korean, European and American Also in 2018, China’s National Institute for Food
brands have long dominated the cosmetics market and Drug Control (NIFDC) issued a statement
in China. In 2017, only three Chinese brands ranked about its commitment to overhauling testing in the
among the top ten cosmetics brands in China, while cosmetics industry and exploring viable alternatives
the rest were foreign brands (Reportlinker). to animal tests that are commonly used in countries
where the practice is banned. The NIFDC emphasized
China is second only to the US when it comes to that research, development, and the standardization
cosmetics. That will reverse in the next couple of of testing methods that don’t use animals are its top
priorities. Animal-protection organizations have
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