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Derma cosmetics(skincare for sensitive skin) market in China

I. Derma cosmetics market

  • Sales revenue of skincare products(sum of toner, essence, and lotion category) sold in Tmall and Taobao for the last one year(June 2018-May 2019) is 22.1 bn yuan(KRW 3.8 tn)
  • The market size of skincare products for ‘sensitive skin’ is 270 million yuan (1.2% of total skincare market). Considering that derma cosmetics is a concept that incorporates skincare products for sensitive skin, the derma cosmetics market in China’s Alibaba platform is at least 270 million yuan.
  • Monthly sales trend shows fluctuation depending on season, but it shows relatively strong sales in all seasons except winter. The number of registered products is steadily increasing.

Figure1. Monthly sales of skincare for sensitive skin

Figure2. Market share by category, May 2019

Source: MeasureCommerce | MeasureChina

Table1. Top 5 products in skincare for sensitive skin

Source: MeasureCommerce | MeasureChina

II. High growth potential

  • Derma cosmetics is one of the fastest growing skincare categories in China. If we compare the growth rate of derma cosmetics(skincare for sensitive skin) with that of skincare for dry skin types and oily skin types, it looks as follows. As of May 2019, market size of skincare for dry skin grew +60%, yoy, skincare for oily skin grew +120%, yoy. Skincare for sensitive skin grew +123%, yoy.
  • Annual growth rate of derma cosmetics market in China is projected to be double-digit.
  • Meanwhile, the penetration rate of derma cosmetics in China is relatively low compared to other countries. This is firstly because in the past, women over their 40s were main consumers of derma cosmetics category, and secondly because of lack of interest in ingredients. The penetration rate of derma cosmetics in China is somewhere around 20% at the current moment. However, judging from the fact that the market is expanding at the speed of 20% every year, we expect the penetration rate to reach 50% in five years.

Figure3. Yoy growth rate of skincare category by skin types

Source: MeasureCommerce | MeasureChina
  • In recent years, there is a growing awareness on cosmetics ingredients in China. Li Jiaqi, top KOL in China also known as ‘Lipstick King’, introduced cream products from Makeprem and Atopalm in December last year and May this year, respectively, on his Taobao live broadcast. He emphasized non-irritant and non-toxic ingredients of the products, and the initial volume was sold out during the airing. Both Makeprem and Atopalm are Korean skincare brands that are famous for making products without harmful chemicals.
  • What’s meaningful here is the fact that 1) the person who is well-known for reviewing color cosmetics recommended these skincare products mentioning their gentle features, and that 2) he emphasized that the products’ safety has been approved by a Korean app that analyzes cosmetics ingredients, so that they could be used on sensitive skin.
  • Considering that Li Jiaqi’s influence is among the top of the industry, we expect to see rising awareness of Chinese consumers on cosmetics ingredients in the near future.

III. Key features and target points of Chinese derma cosmetics market

Table2. Brand ranking of skincare for sensitive skin

Source: MeasureCommerce | MeasureChina

Table3. Brand ranking of skincare(total)

Source: MeasureCommerce | MeasureChina

Table4. Top features of sensitive skincare category

Source: MeasureCommerce | MeasureChina

Table5. Top features of all skincare category

Source: MeasureCommerce | MeasureChina

1) Average price is relatively low

: The average price of the top 10 brands in sensitive skincare does not exceed 200 yuan. Compared to the second table, which shows brand rankings in skin care for all skin types, the price range of derma cosmetics sold in China is relatively easy to approach.

2) Most products are mist, toner, or cream; spot treatment products ae hard to find

: It is easy to find spot treatment products in derma cosmetics in Korea, but not quite so in China. This implies that Chinese derma cosmetics market is not mature and segmented enough (yet). But from another point of view, this also means that Chinese derma cosmetics market have much room to expand in the future.

3) Main purpose of using derma cosmetics is moisturization and skin renewal

: ‘Brightening’ and ‘whitening’ features, which were always on top in skin care features, are not shown on the features ranking for sensitive skincare category. For sensitive skin, ‘brightening’ ranked 11th and ‘whitening’ ranked 17th. As interest in ingredients rises and the market for derma cosmetics expands, the demand for whitening is likely to be lowered.

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