From seniors to sunscreen, these are the trends fueling China's beauty surge

In May, China’s cosmetics retail sales reached a historic high for the month, hitting $5.6 billion (40.6 billion RMB), up 18.7% YoY, and surpassing the previous record of $4.6 billion (33 billion RMB) set in May 2022.

Overall, the beauty sector is sending positive signs about consumer spending. From January to May this year, total cosmetics retail sales reached $24.4 billion (176 billion RMB), a 5.4% YoY increase.

Mordor Intelligence values China’s beauty market at an estimated $9.8 billion in 2024, and forecasts that it will reach $15.7 billion by 2029, expanding at a 9.17% CAGR during the forecast period.

“Looking at the vast and dynamic Chinese beauty market, it’s clear that while many categories are thriving, there are still areas ripe with potential waiting to be tapped into,” Gabby YJ Chen, President of Global Expansion at Florasis, tells Jing Daily.

Here, we decode the key trends reshaping China’s beauty market in 2024 and beyond.

Gen Z not a panacea for beauty brands

In recent years, it seemed as if targeting young consumers was a cure-all strategy for beauty brands. Marketing campaigns often highlighted this group’s joys and sorrows, expanding the definition of youth from Gen Z to Gen Alpha and promoting “early anti-aging” benefits.

McKinsey’s latest China Consumer Trends Report 2024 reveals that apart from Gen Z in third and fourth-tier cities, affluent seniors in first-tier cities and wealthy middle-aged consumers in third-tier cities are spending more.

Some brands have taken notice. In 2021, Chinese personal care group Liby launched two beauty brands, Banyue Fusheng (半月浮生), and Wu Shi Jia (吾时佳), targeting the oral and skincare issues of women aged over 50.

Unlike domestic brands that primarily focus on facial care, an increasing number of international beauty brands are adopting a holistic “beauty and wellness” approach. L Catterton, the private equity firm under LVMH, recently announced a partnership with British actress Naomi Watts to acquire Stripes Beauty. The brand focuses on the physiological and psychological health of menopausal women, and offers four product lines: facial care, body care, intimate care, and nutritional supplements.

Spas: Prestige beauty’s next gold ticket

According to the National Tourism Committee, the Chinese wellness tourism market is worth $12.3 billion (90 billion RMB) in 2024.

The expanding wellness tourism market is prompting more luxury beauty brands to target high-end hotels. The combination of luxury beauty and high-end hotels creates synergies thanks to the overlap in their high-spending customer bases.

Datastory’s 2023 Luxury Beauty Report shows that 60% of high-end skincare users have experienced treatments at offline beauty salons.

Notably, LVMH’s Dior has extended the concept beyond its traditional confines, expanding spa and skincare experiences to a train. In April last year, Belmond’s Royal Scotsman announced a long-term partnership with Dior Beauty, featuring a dedicated Dior spa carriage with two lacquered treatment rooms adorned with Dior’s iconic Burgundy Toile de Jouy pattern.

“Dior’s partnership with Orient Express reflects the need for brands to differentiate themselves from increasingly popular lower-end labels – they are betting on the future of luxury while staying true to their roots,” says Allie Rooke, brand strategist at Clean Beauty Asia, who helps cruelty-free brands enter the Chinese market.

This month, the luxurious experience comes to Asia on board the Belmond Eastern & Oriental Express, featuring Asia-inspired beauty treatments.

“As Chinese consumers go up Maslow’s pyramid with more consumers looking for self-actualization, luxury travel is going to be a massive growth area and LVMH will be right there embedded deep in the experience,” Rooke says.

Ana?s Bournonville, president of Reverse Group, adds: “ Bvlgari is a great example as its hotels, opened in fashion capitals such as Paris and Milan, have climbed to the top of the most prestigious places. Today, VICs and luxury consumers are not solely buyers, but aspire to feel immersed in the universe of the brand they praise.”

Beyond traditional beauty counters

Nowadays, consumers have higher expectations of retail stores. They are seen as not just places to make purchases, but a combination of experiential space, service, and emotional connection to brand culture.

For instance, Aesop earlier this month partnered with Chinese lifestyle and fashion retailer SND to co-launch a concept store in Sanya.

“Selling products in curated luxury and lifestyle boutiques taps into a consumer base with substantial spending power and a penchant for niche brands, aligning with Aesop’s strategy to enhance brand presence and customer loyalty,” says Rooke.

On Friday evenings in October and November last year, Aesop held live music performances at Shanghai’s Jing’an Kerry Centre.

Other examples include 欧莱雅 launching its first hair salon in Shanghai, and SkinCeuticals new Shenzhen flagship store offering cosmetic clinical experiences, emphasizing the brand’s area of expertise and providing an experience that consumers can’t find anywhere else.

Booming suncare industry

In 2023, the sunscreen market expanded 12% YoY, surpassing the broader domestic market’s growth rate.

Consumers are spending more time outdoors, whether traveling or engaging in fitness activities. This trend has underscored the need for long-lasting sunscreen products that can keep up with active lifestyles.

In the UV protection category, product efficacy is paramount.

“Both local and international brands are heavily investing in product demonstrations through social media videos. Key opinion leaders (KOLs) are frequently invited to test and review sunscreens, clearly showcasing their effectiveness,” says Rooke. “Brands are innovating by integrating skincare elements into their sunscreens, such as incorporating antioxidants to enhance anti-aging benefits.”

To reach a broader audience, brands are exploring new sales points, including outdoor sports clubs and camping sites.

Key Takeaways

• China's cosmetics retail sales hit a historic high of $5.6 billion in May, marking an 18.7% YoY increase.
• Affluent seniors and middle-aged consumers are exhibiting strong spending behaviors, leading brands to launch products catering to older demographics.
• Brands should take note from Aesop, which is creating immersive retail experiences, combining product sales with cultural and lifestyle elements to enhance customer engagement.
• The sunscreen market is booming, to tap the trend, brands need to invest in effective, long-lasting products and leveraging social media to demonstrate product efficacy.