As COVID -19 Pandemic Reshapes the Global Business Pattern, What Is the Biggest Opportunity for Imported Beauty Makeup in 2021?

Paying attention to consumer demand and creating a differentiated and personalized business model.

Due to the COVID-19 pandemic, the beauty makeup industry has undergone a difficult year in 2020, which was a year full of transformation. In the face of the changes in consumers, products and markets under the new normal, "how to seize opportunities” and "which opportunities to seize" of imported products have been the hot topics in the industry. 

On December 21, Jin Zi, the Deputy Customer Director of CTR Market Research, delivered a speech themed "What are the opportunities for imported products under the new normal and new demand”, sharing opinions in these topics at the E-commerce sub-forum of the China Cosmetics Business Summit & 2020 COSMETICS NEWSPAPER ANNUAL MEETING.

01

After the pandemic, the beauty makeup and personal care markets suffer great losses.

Local affordable brands such as Dr.Yu and Perfect Diary stand out

According to CTR Market Research, after the outbreak of the pandemic, the sales of beauty makeup and personal care in China actually dropped by about 5% in the first half of 2020. It is predicted that the sales in the same period without the impact of the pandemic would have increased by 9%. Thus, the losses caused by the pandemic reached nearly 29 billion yuan. Up to now, the recovery of different sub-categories such as cleaning, personal care and makeup is varied, but the industry on the whole is under recovery.

It is worth noting that 70% of the cosmetics brands that have witnessed great growth are local affordable brands including Dr.Yu, Perfect Diary and DR PLANT in the difficult market environment during the pandemic. 53% of those experiencing growth are still local brands even after the pandemic. Domestic cosmetics brands have demonstrated competitiveness.

In terms of imported brands, Estee Lauder, Lancome, WHOO and other high-end brands, as well as popular brands such as Freeplus and 3CE, responded quickly and returned to normal operations. L'Oreal, Shiseido, Amore and other global beauty makeup brands have even made more efforts in the Chinese market and achieved significant growth. 

In terms of import consumption channels, as the pandemic blocked overseas purchases, the number of overseas channel purchasing of imported beauty makeup decreased by 64% year over year. At the same time, domestic e-commerce channels grew rapidly. Since the demand for imported beauty makeup expanded in China’s domestic local channels, e-commerce is embracing the favorable situation.

02

The demand and opportunity in the import market under the new normal

Changes have taken place in the choice and consumption of imported products after the pandemic.

According to CTR Market Research, consumers have paid more attention to promotion after the pandemic, and there are sub-category differences in terms of price selection. Consumers have paid greater attention and shown more consumption desire for worthy products such as essence and facial essence, and basic affordable products with positive product experience such as facial cleanser and loose powder. Due to this consumption behavior, European and American famous high-end products have core competitiveness, and have attracted much attention. However, Japanese imported beauty makeup has achieved stable development in basic categories.

In addition, consumers have varied concerns about the price/performance ratio. Data shows that the middle class in the developing cities pursue exquisite images, while  they tends to pursue higher cost effectiveness for products in the developed cities. Jin Zi said, "In view of the consumption trend, operators should provide novel products achieve differentiated positioning in imported beauty makeup. In small towns operators should provide renowned imported brands to enhance satisfaction and social impression for the middle class consumers, and in urban cities operators should import products with a high performance to cost ratio."

Another obvious fact is that the expansion process of e-commerce has accelerated, and the overseas purchase online of imported beauty makeup products has become the most important channel for the consumption of imported products. Jin Zi stated that with the continuous development of e-commerce within population, platforms and categories, the online development of imported products is blessed with potential in scale, entry points and categories. Therefore, e-commerce is the must-have for imported beauty makeup to survive and grow. 

Concerning e-commerce operation, strong promotion sales events are an opportunity for merchants to attract and convert more customers and achieve growth. Merchants on different platforms all can utilize imported beauty and makeup products during the promotion sales events to greatly increase traffic and revenue.