2014: An Overview of China’s Cosmetics Market & Regulatory Reform

China’s reform and opening-up policy have brought unprecedented opportunities to every industry sector across the nation. The cosmetics industry as one of the fastest growing sectors has come a long way in both sales revenue and legislative development over the past 20 years. Despite the impact of the global economic downturn and the economic growth slowdown in China, the gross sales revenue of the Chinese cosmetics industry still reached USD 25.9 billion (RMB170 billion) in 2012 ranking third after the EU and the US, of which 60% are of skin care products with cream and anti-aging products taking up a lion’s share, and 14% are of makeup products, emerging to be the second largest cosmetic stream with a 20% annual growth rate. Fragrances, represented mainly by top international brands such as Chanel, Dior, and Estee Lauder, however, only generated revenue of around USD 1.2 billion compared with USD 90 billion in Europe and USD 40 billion in the United States. It goes without saying that there is huge potential in this untapped market given that 20% of the world’s population is responsible for a mere 1% of the global fragrance consumption. The development plan of the Cosmetics Industry in the 12th Five-Year Plan has highlighted the importance of consumption, with hopes that it will boost the economy in China.