What are the differences between the UK and China make-up markets?

China’s cosmetics market has exhibited a strong recovery since the beginning of the Covid-19 pandemic, with consumers increasingly willing to spend money on make-up created by domestic brands like Florasis and Perfect Diary. Juliette Pitt investigates whether British brands still have a chance at breaking into the market

Cosmetics is an umbrella term for products used to ‘enhance’ one’s appearance, with the most common products that fall under this category including facial, nail, lip and eye make-up products. China’s cosmetics market is one of the most dynamic in the world. The market has boomed over the past few years, and it is the world’s second-largest consumer market for such products at an estimated £53 billion. It is no surprise, then, that in recent years the sector has experienced double-digit growth, with the market already recovering quickly from the effects of the Covid-19 pandemic.

Due to rising disposable incomes, many young people are becoming increasingly inclined to spend money on make-up products. And Chinese brands are now taking full advantage.

A good example of this is the unicorn Chinese brand Perfect Diary. Compared to other leading Western brands such as L’Oréal and Estée Lauder, this domestic brand is seen to offer more suitable skincare products for Asian tastes. For example, Perfect Diary offers an extra-white colour for face powder that’s proven to be hugely popular.

Other local rivals such as Florasis and Chando are also quickly taking over the mass market. In the case of Florasis, success has come by placing Chinese culture at the heart of its brand. Florasis’s lipstick shades are inspired by the colours of ceramic glazes, and its product packaging draws inspiration from Ming and Qing dynasty fashion accessories.

Nevertheless, Western brands such as L’Oréal and Estée Lauder are still thriving in China’s luxury segment thanks to their long held reputation for producing high-quality products. However, to remain on top, it’s clear that international brands will need to ramp up their research and development capabilities to stay ahead of societal trends.

The differences between the makeup markets in China and the UK

In the UK, the make-up sector saw a 22% decline in value in 2020 due to the ongoing impact of Covid-19. Unlike China’s recovering market, there has been increasing disengagement with make-up among UK consumers. Indeed, statistics show that make-up products are under threat as consumers increasingly choose to spend money on skincare instead. In 2020, skincare products stood at 25.4% of the cosmetics market, whilst make-up was 12%.

There has also been a reduction in motivation among consumers to buy make-up in the UK, as social occasions have been limited due to the pandemic. While a proportion of women reportedly continue to buy make-up to experiment, there is a trend towards multifunctional and easy-to-use products. Market research suggests that there is an opportunity to create hybrid formulations that combine skincare and makeup as consumers move towards a ‘simpler’ beauty routine.

Nevertheless, the UK’s colour cosmetics sector does share one thing in common with China’s: the popularity of lipstick, which remains one of the most purchased products in both countries. However instead of going for rosy-red colours like Chinese consumers, research suggests that more UK consumers are using products like lipstick to subtly enhance their features. Whilst pre-pandemic consumers might have tended to buy products to create a bold and dramatic look, there appears to be a market trend towards a ‘no-make-up make-up’ look.

Another difference is that Chinese consumers often search for the ‘whitest’ powder they can find in a bid to lighten their complexions, whereas in the UK liquid/cream foundations are more popular. Concealing sleepless nights and covering blemishes to look more youthful has always been a strong motivating factor for UK consumers.

It is also important to analyse the distribution channels used in the two markets. Perhaps unsurprisingly, the most common way to buy make-up products in both countries is now via e-commerce, and in-store visits are on the decline. “In China, consumers visit a website nine times on average before purchasing a product, which differs significantly from the UK’s more transactional approach,” Zarina Kanji, Business Development for Tmall Health & Wellness and Food & Beverage Brands, explains. “The Chinese consumer expects more from the brands it buys into, including provenance, uniqueness and quality, and will spend more time getting to know a brand before a purchase is made. This offers brands with a really strong proposition great opportunities to succeed, particularly when utilising interactive methods of engagement such as live streaming.”

Yet stark differences remain. In China, cosmetic brands have used rapid technological advances to change the landscape of their marketing strategies. For example, key opinion leaders (KOLs) have become a crucial part of any company’s marketing strategy due to China’s huge live streaming industry. Although KOLs are used in the UK market on social platforms like Instagram, a different type of KOL operates under the spotlight in China: the virtual KOL (also known as AI-powered influencers). Brands such as Estée Lauder have already developed their own virtual idols to sell a range of products, highlighting their ability to move quickly on new trends in the Chinese market.

How should British brands adapt to the Chinese market?

With these market differences in mind, it is relatively difficult for British brands to enter the highly competitive Chinese make-up market. Yet there is still a lot of market opportunity. As young Chinese consumers look beyond make-up to expand their self-care routines, to include products such as perfumes or higher-end bubble bath products, the trend will be towards a greater degree of sophistication encompassing a range of beauty products. Therefore, even predominantly make-up driven brands can consider expanding their product ranges and introducing non-make-up products when they enter the Chinese market.

Understanding local nuances, incorporating product preferences and ways of communicating with consumers – including live streaming – is critical for international brands hoping to succeed in China. As Pearl Zhu, CBBC retail and e-commerce lead, argues, “C-beauty brands are on a powerful rise. Major players (should) embrace a cutting-edge digital approach and dynamic new product launch pace in the market. A nimble digital footprint and turning local inspiration into a marketing campaign could help international brands to capture China’s millennial and Gen-Z consumers.”

Another key priority for Chinese consumers in the post-Covid landscape is health and wellness. “A key trend which has emerged is clean beauty, driven largely by younger consumers that want clean, non-toxic and sustainable beauty products. Recent data from Tmall found that 45% of consumers pointed to ingredients as the deciding factor behind their purchases,” Zarina says.

“The increased interest in the origins and credibility of cosmetics’ ingredients has seen the emergence of “skintellectuals,” a growing community of skincare enthusiasts, opening opportunities for brands that put an emphasis on effective, high-performance ingredients.” Turning away from big-name commercial brands, data shows more urbanites are demanding natural, safe, and environmentally friendly, boutique cosmetic products.

Overall, the colour cosmetics sector in China is expected to maintain its rapid growth, with a projected value of £42 billion by 2040. For some companies willing to be nimble in the market, opportunities still abound.