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International Beauty Giants Speed Up Introduction of Imported Brands in China

China’s ever-expanding cosmetics market has seen many overseas brands accelerate their introduction of imported products. International beauty giants, including L'Oreal, Procter & Gamble, Estee Lauder, and Unilever, have acquired at least 78 beauty brands in the past ten years, 39 of which have entered the Chinese market (50%).

According to online data, from 2010 to 2019, China's cosmetics market grew much faster than the global market. In 2013, China surpassed Japan to become the world's second-largest consumer of cosmetics and has accounted for 12.8% of the global market in 2019 [1]. The rapid development of the Chinese cosmetics market has created huge opportunities for overseas beauty brands. 

2010-2019 Retail sales and growth of global/Chinese cosmetics market

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Source: Qianzhan Industry Research Institute, Pinguan.com

Brands under beauty giants

According to statistics by Pinguan.com, 14 international beauty giants, including L'Oreal, Procter & Gamble, Estee Lauder, and Unilever, have acquired at least 78 beauty brands in the past ten years. Among them, there are 35 skincare brands, accounting for about 45%; 23 household personal care brands (washing/hair care/oral), accounting for about 30%; 12 cosmetics brands, accounting for more than 15% and 8 perfume brands, accounting for 10%. 40 brands are showing relatively strong performance after acquisition [2].

Brands acquired by 14 major beauty giants in the past ten years


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Source: Pinguan.com

Tmall is the first port of entry new brands in China.

Tmall has become the first choice for international beauty giants to introduce their brands to the Chinese market. 39 of the above brands have entered the Chinese market, and 37 have settled on Tmall [3]. Even in the first quarter of this year, when the COVID-19 pandemic plagued China, several brands opened stores on Tmall, such as Colgate's PCA Skin, Estee Lauder's TooFaced, LG's REACH and Unilever's TATCHA.

Brands that have opened Tmall stores(partly) (data were taken on June 28) 

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Source: Pinguan.com, ChemLinked

In China’s market, e-commerce has become the biggest sales channel in the beauty industry [4]. The beauty market size on Tmall now exceeds 200 billion yuan [5]. In 2019, Tmall had 16 cosmetic brands with an annual turnover exceeding 1 billion yuan [6]. In this year’s 618 Shopping Festival, the beauty sector recorded remarkable sales data: 

  • One minute after midnight on June 1, Tmall beauty makeup sales exceeded 100 million yuan;

  • One hour after Tmall 618 was officially launched, 490,000 lipsticks were sold.

  • Sales of facial lotion cream and perfume increased by 100% and 97%, respectively [7].

Proactive branding in Little Red Book

In the Chinese market, beauty giants also adopt hyper-localized marketing by taking advantage of popular social media platforms such as Little Red Book, Bilibili, and Douyin. Among them, Little Red Book is the hottest because cosmetics, skincare, and fashion KOLs generate the highest content. At present, 31 have opened official brand accounts on Little Red Book. 3CE under L'Oreal is harnessing social media and gaining traction among young consumers. The brand has 200,000 followers and 140,000 notes on Little Red Book.

The number of followers/notes of the acquired brands on Little Red Book (data recorded on June 28) 

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Niche brands perform well.

Brands such as Le Labo under Estee Lauder, Urban Decay of L'Oreal, Drunk Elephant of Shiseido, and TATCHA under Unilever are all niche brands that are followed by a large number of young people on social media platforms. In the Chinese beauty market, where Gen Z has become the main consumer group, the more unique a brand is, the more potential it has for development.

For example, Drunk Elephant, owned by Shiseido, advocates Clean Beauty. Its efficacy-based product positioning and its bright and colorful packaging design make it a hit in China. In September 2019, Drunk Elephant opened its Tmall store and quickly secured its position in the top 10 selling brands in Tmall Global during the 2019 Double Eleven Shopping Festival despite being in the Chinese market 44 days [8]. According to Tmall, more than 100 niche beauty brands will open stores in Tmall Global in 2020, with an average annual growth rate above 50% [9].  

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