Chinese make-ups firms outperform global competitors
(MENAFN) In her initial foray into the cosmetics realm, 18-year-old Chinese student Yiva Zhang was drawn to the allure of "Japanese and South Korean brands." However, a shift has occurred, and Yiva now proudly displays a box adorned with products from Chinese brands, driven by the allure of purchases facilitated through social media advertisements and live broadcasts. Notably, she mentions that discerning differences between these local brands and global giants in the cosmetics industry has become increasingly challenging.
Chinese cosmetics companies are making significant strides in competing with international heavyweights such as L'Oreal, Estee Lauder, and Shiseido, particularly in China, the world's second-largest cosmetics market by sales. Their success is attributed to savvy social media utilization and a strategic focus on less affluent cities, a market segment overlooked by many foreign counterparts.
Market research data from Euromonitor reveals a noteworthy surge in the share of local brands in online sales among the top 40 cosmetics brands in China. The figure climbed to 47.9 percent during the first ten months of 2023, compared to 43.6 percent in the preceding year. Forecasts indicate a robust trajectory for the Chinese cosmetics market, encompassing items like foundation creams, lipstick, and nail polish, with an estimated worth of 111.3 billion yuan (USD15.6 billion) by 2028, a significant ascent from 71.6 billion yuan in 2022.
Miro Li, founder of DoubleV, a marketing consultancy in Shenzhen, notes that these are opportune times for Chinese brands, emphasizing the heightened openness of consumers. He points to the success of Dooyin, the Chinese counterpart to TikTok, in broadening its consumer reach. Stephen Huang, head of strategy at Joy Group in Shanghai, further underscores the impact on young consumers in lower-tier cities, previously beyond the scope of traditional e-commerce platforms like Tmall. This evolving landscape signals a paradigm shift where local Chinese cosmetic brands are not only holding their ground but emerging as formidable contenders on the global stage.
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