Asian Market Personal Care Industry Libre

Cosmetics, Asian Rush

ASIANS DRIVE
THE PREMIUM
SKIN CARE
MARKET
All roads lead to China. What's happening in the new frontier?
By Ahn Sol (Reserch Analyst at Mirae Asset Global Investments(HK))

Worldwide cosm et ics sales have never declined in the past 18 years, and their annual growt h rat e was 4.4% bet ween 1993 and
2011. From 2001 to 2011, the Chinese skin/ cosmetics market has shown a 17.0% growth rate, and prem ium skin/ cosm etics m arket has grown by an even faster rate of 22.3% .
This is why China is often cited by cosmetics companies as a key market for growth. Estée
Lauder, L’Oréal, Shiseido, Proctor &Gamble, et c. have been m aking subst ant ial investments in the country over the past decade.
Cosm etics m arket growth rates in China are expected to decelerate compared to the past 10 years, but we believe the industry can

EMERGING MARKETS INSIGHT

9

Cosmetics, Asian Rush still continue to grow by double

like Hong Kong, New York, and Paris. Accordi-

Asian markets including China tend to offer

digit s and even fast er for

ng to Estée Lauder, every $1 spent in China

higher ret urns for m any global cosm et ics

premium cosmetics in the

implies an extra $2 in sales from Chinese out-

players. This is because Asians spend more

next five years. In addi-

side of China.

on skin care products that tend to have higher

tion to nominal GDP

The Chinese cosm et ics indust r y t r end

price points. Also, it is easier for companies to

growth and popu-

favors foreign luxury cosmetics players not

prem ium ize skin care products with added

lat ion gr ow t h ,

only because of its faster organic growth but

functions. There are m ore opportunities to

urbanization will

also because China ( and Asia overall) is a

add values on skin care products with whiten-

b e t h e st r o n g

more profitable market. The Asian cosmetics

ing, anti-aging, brightening, etc., compared to

growth driver of

market is over-indexed to premium markets.

color cosm et