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Internet Beauty Sales Skyrocket in China

Posted: April 23, 2012

According to a new report Beauty Retailing Through Direct Sales in Emerging Markets 2011: Channel Analysis and Opportunities from Kline & Company, beauty sales through the Internet in China have been growing at a rate of nearly 200% since 2006 and are estimated to be worth nearly $8 billion at the retail sales level in 2011, making it the largest Internet beauty market in the world.

“This news is astounding,” remarks Karen Doskow, industry manager at Kline, “and to put this into perspective, Chinese online beauty sales in 2011 are nearly equal in size to the entire beauty market for France, which is the largest market for cosmetics and toiletries in Europe. Furthermore, Chinese Internet beauty sales are nearly nine times larger than the U.S. Internet beauty market.”

Undoubtedly, marketers and retailers alike will be wondering how did this market get so big. “The rapid growth of Internet usage over the past five years has given way to a tremendous surge in sales and availability of local and foreign cosmetic and toiletry brands,” explains Li Wang, vice president of Kline Asia. “The number of online users and buyers in China has skyrocketed. Internet user numbers in China approached 457 million in 2011, up from 137 million in 2006. Online buyers now total some 205 million in 2011.”

Further driving the online phenomenon are “e-malls,” such as Tiantian.com and Alibaba’s Tmall in China, that enable customers to buy from a wide range of domestic and foreign skin care and makeup brands in a convenient one-stop shop. “We expect the growth of these portals to remain quite robust, driven by continually improving socioeconomic dynamic, as well as an increasing appetite for Internet convenience among all consumers,” adds Doskow.

The popularity, uptake, and success of e-commerce offers is driving companies once focused exclusively on person-to-person sales to embrace the online shopping potential. In some markets, consumers may purchase through an individual consultant’s online storefront, effectively marrying the personal interaction and trust upon which the direct model was built with new consumer shopping habits. According to Kline’s research, the person-to-person model is still dominant in Brazil, the largest BRIC market where players like Avon and Natura are entrenched. Although the online beauty business is growing, consumers in this market still prefer the personal attention afforded by a consultant.

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