"Even more so than in the Western markets, Chinese consumers want the efficacy of a powerful clinical-type product combined with the perceived benefits of natural ingredients based in traditional Chinese medicines," says Susan Babinsky, senior vice president and head of Kline’s Consumer Products consulting practice. "This is a very viable value proposition in China, and in fact may yield some novel new products and ingredient platforms that could offer potential in Western markets."
Kline’s study, PROFESSIONAL SKIN CARE 2006, Volume III: China, pegs the overall market at $720 million at the manufacturer level and rising, quickly gaining ground on the $870 million U.S. market. In fact, the facial treatments sector in China is currently the third-largest in the world, larger than any single country in Europe, according to preliminary data from Kline’s Gl COSMETICS & TOILETRIES 2006 service. While it is already a highly fragmented market space, with more than a thousand local brands competing with approximately 100 imports, the promise of a steadily expanding growth market is alluring. Kline’s study forecasts annual growth of nearly 15% in China through 2011, compared to just over 9% for the U.S. market. This will push sales in the Chinese market past the $1.4 billion mark -- and the U.S. market -- within this timeframe.
The lion’s share of skin care product sales through professional channels in China belongs to the beauty institutes, with about a 70% share. However, Kline’s study suggests that the spa market is poised for a surge, which would give the foreign brands a chance at raising their market share. "We’re expecting sales through spas in China to grow by more than 17% a year over the next five years," says Mellage. "The emerging middle class is beginning to discover the day spa, which offers some of the same amenities of the full spa experience but at a much more affordable price."