China's beauty market isn't all doom and gloom. While much is being made of weakness in this massive market, two key growth areas offer brands an opportunity to tap into consumer engagement. Let's break it down.
China's Beauty Market Has Faltered...
First, the bad news.
While China's beauty and personal care market is expected to generate $70.36 billion in 2024 and grow at 4.85% annually through 2028, it's hard to ignore the tough headlines coming out of the region.
Recently the Estée Lauder Companies' 2024 sales decline was partially blamed on ongoing "softness" in China, which is anticipated to continue through fiscal 2025.
And Coty, which recently released fairly upbeat financials, also flagged weak points in APAC that included China and its related travel retail channels.
Then, most recently, Sephora China announced it was cutting more than 100 jobs, or less than 3% of its workforce, in response to weak demand in the market.
The cuts would impact employees at some of the ~350 stores it operates in China.
The negative market trends have spurred a flood of new investments and market entries in another Asian powerhouse, India.
Yet, while these aren't the headlines the industry wants to see, some recent consumer data shows there are a pair of key growth areas in China's beauty space.
...However, There Are 2 Notable Beauty Market Bright Spots
Globally, for the first half of 2024, NIQ data shows that beauty dollar sales grew 10% in all regions.
Strength in Asia Pacific was boosted in part by an expansion of ecommerce and social selling in China, as well as South Korea.
In the first half of the year, worldwide online beauty sales grew 14.1% over the last year, helping to drive 8.5% growth in the beauty market, which NIQ values at $104.9 billion.
Online sales gains have been particularly strong in China and, again, South Korea, which drove 12.3% growth for APAC.
According to Statista, 2024 online beauty and personal care sales in China are forecast to account for 26% of the market's total revenue.
As for social selling, TikTok, which operates as Douyin in China, charted 50% growth in China, per NIQ, helping drive double-digit sales growth in the market.
Brands with the strongest competency in the social and ecommerce space are likely those best positioned to grow, even in difficult times.
