In 2016 the premiumisation trend in skin care became more evident, with consumers preferring to select skin care products with higher prices or premium brands. Alongside growing awareness of personal wellbeing and rising disposable incomes as a result of urbanisation, more domestic consumers were willing to trade-up to high-quality and functional skin care products for a better effect. Moreover, consumers changed their consumption habit from price-oriented to quality- and brand-oriented; they were more open to purchasing premium brands, as they had easier access to international brands through online platforms. Besides, rising overseas purchases also increased awareness of premium brands and boosted sales in mainland China.
L’Oréal China maintained its leading position in skin care with a value share of 9% in 2016. The company offers a wide range of products, from mass to premium brands, as well as dermocosmetic brands, which cater to the needs of a large number of consumer groups in China. In addition, with a long history in the market and consistent product quality, L’Oréal China has built a reputable and positive brand image, giving confidence to consumers; not to mention its widespread nationwide distribution network, including deep penetration via online and offline channels, which sustained the leading position of L’Oréal China in the review period.
Over the forecast period skin care is expected to register a value CAGR of 6% at constant 2016 prices, to reach CNY223.3 billion in 2021. Growth will be driven by rising awareness of skin health and consumption upgrading amongst domestic consumers.