Is There Still Opportunity for Makeups in China’s Offline Market?
- Chaileedo Press
- May 1, 2023
- 2 min read
An industry insider said, there are not many types of makeups in offline beauty stores and there are not many good brands to sell. Offline channels will become a turning point for cosmetics.
In the second half of 2021, the Chinese cosmetics market fell into a slump. Among them, cosmetics brands such as Benefit and Maybelline tightened their offline presence and even withdrew from offline. Online, the cosmetics market is not optimistic either. Data from O&O Consulting shows that from June 2021 to June 2022, online facial makeup sales exceeded 37 billion yuan ($5.34 billion), a year-on-year decrease of 4.89%. Many practitioners believe that cosmetics are really not working.
However, with the retreat of the epidemic and the recovery of the industry, offline cosmetics finally ushered in a turning point this year. According to data from iResearch Consulting Group, in the next three years, the Chinese cosmetics market is expected to have an increase of 22.9 billion yuan ($3.307 billion), still the second largest market after skincare products.
In response to the topic of “Can makeup category become popular again offline?”, CHAILEEDO interviewed the owners of several CS retail stores in China. Most people said that it is not easy for makeups to become popular again through retail stores. Changing the status quo is difficult and requires a certain period of time. There are mainly three reasons.
Firstly, with the implementation of the Cosmetic Supervision and Administration Regulation and related supporting regulations, it means that cosmetics supervision will become increasingly strict.
A cosmetics retailer in Hangzhou told CHAILEEDO that after the new cosmetics regulations were introduced, the industry still needs some time to figure out the content of the regulations. “We need to adjust the entire brand and supply chain in accordance with the regulations, and consider the adaptability of all aspects to the regulations. Therefore, it will take quite a long time for cosmetics to recover,” he said.
Secondly, cosmetics is a category that urgently needs heavy education. “Unlike skincare products, cosmetics require immediate results. However, a considerable number of consumers do not have the ability to quickly apply makeup and contour,” said the aforementioned cosmetics retailer in Hangzhou. They believe that it will take long-term market education to make consumers proficient in and accustomed to applying makeup.
Thirdly, cosmetics products often have the ‘80/20 rule’, where out of 10 shades of a product, only 2-3 shades may be hot sellers. ‘Imagine a chain store with 30 stores. If one shade has 3 inventory stocks and there are 10 shades, that adds up to 900 inventory stocks. How much inventory pressure is that?’ said Li Feng, former general manager of the marketing center of cosmetics chain Yisha, revealing the dilemma of cosmetics stores.
“The current offline beauty shops have few cosmetics categories and not many good brands to sell. The offline channel will become a turning point for cosmetics.” An industry insider believe that future “emerging makeup brands” have three clear positioning. First, strict control of prices online, preferably at the standard retail price. Second, driven by professionalism offline, without discounts. Third, the products need to meet high quality, high appearance value, and high repurchase rate.
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