Research and forecast of global and Chinese beauty and personal care industry segment product market consumption scale

1, beauty and personal care industry definition and classification: According to the National Economic Industry Classification and Code (GB/T4754-2017), cosmetics manufacturing refers to the manufacture of daily chemical industrial products that are applied, sprayed or other similar methods to any part of the human body surface (skin, hair, nails, lips, etc.) to achieve cleaning, elimination of bad odor, skin care, beauty and modification purposes.

Cosmetics refers to beauty and personal care products, including 11 fine molecular industries: skin care products, hair care products, makeup products, oral care products, bath products, baby and child exclusive products, men's care products, sunscreen products, perfumes, deodorants, hair removal products.

1) The global beauty and personal care industry shows volatile growth: In the past decade, the global beauty and personal care market has shown a volatile growth trend. According to the statistics of CICC International Consulting, from 2012 to 2015, affected by the financial crisis, the growth rate of major beauty and personal care markets such as Europe, the United States and Japan was relatively slow. From 2016 to 2019, driven by emerging economies such as the Asia-Pacific region, the global beauty and personal care market bottomed out and rebounded, and the market size climbed to the highest point in nearly a decade, $507.035 billion. In 2020, the impact of the new coronavirus epidemic saw a slight decline in the beauty and personal care industry, especially in Western Europe and the Asia-Pacific region, where the overall market size was reduced to $487.193 billion, a year-on-year reduction of 3.91%. In 2021, as the global beauty and personal care market gradually emerges from the impact of the epidemic, driven by the Asia-Pacific region, the global beauty and personal care market grew by 8.64% year-on-year to reach $529.302 billion.

2) The Asia-Pacific region is the world's largest beauty and personal care consumer market, and the Chinese market is growing rapidly: according to the statistics of CICC International Consulting, in 2021, the size of the beauty and personal care market in the Asia-Pacific region accounted for 35.95% of the global market size in the same period, the size of North America accounted for 21.13%, and the size of Western Europe accounted for 19.27%. From 2012 to 2021, the Asia Pacific region remains the world's largest consumer market for cosmetics and personal care. From the analysis of national data, according to the statistics of CICC International Consulting, the United States will be the country with the highest proportion of the global cosmetics and personal care market in 2021, accounting for 20.03%, and China will become the world's second largest consumer market with 17.19% of the market growth, and the consumption potential is prominent.

3) Offline channels are still the mainstream, and e-commerce platforms are developing rapidly: global cosmetics sales channels are mainly concentrated in department stores, large supermarkets, daily chemical stores, e-commerce platforms, etc. In recent years, the caller platform has developed rapidly, and the new coronavirus epidemic has catalyzed the general trend of online consumption channels. According to the statistics of CICC Qixin International Consulting, the proportion of e-commerce channel consumption has risen rapidly from 4.20% in 2012 to 18.00% in 2021, and the proportion of offline sales based on supermarket has dropped from 83.10% in 2012 to 73.10% in 2021. As the pace of mass consumption continues to accelerate, major brands increase investment in the layout of e-commerce platforms, and the consumption share of online channels is expected to further increase in the future.

"2023-2029 Global and Chinese beauty and Personal Care Industry Development Research and Investment Value Forecast Evaluation Report", released by CICC Qixin International Consulting

2, China's beauty and personal care industry development history: China's beauty and personal care industry has experienced four stages.

Early stage: China is one of the earliest countries in the world to use cosmetics. There are records of drawing eyebrows and touching lips in ancient Chinese books. Slow development stage: In modern times, the production of cosmetics and personal care products in China has been in the state of small family workshops. At the beginning of the 20th century, the production of cosmetics and personal care products in China gradually became industrialized. However, due to the poor living standards of the people and the imprisonment of traditional concepts, the development is very slow.

Rapid development stage: In the 1980s, with the rapid development of the national economy and the continuous improvement of people's living standards, the beauty makeup and personal care industry mushroomed and flourished. The system of the beauty makeup and personal care industry also extended from the light industry system to other systems, and the beauty makeup and personal care products experienced a journey from luxury to necessity in people's concept. Standardized development stage: After experiencing the rapid development stage, China's beauty and personal care market has presented a blossoming situation, in order to better meet the needs of consumers, the state has formulated relevant laws and regulations, so that the beauty and personal care industry has embarked on the road of standardized development.

(1) Development status of beauty and personal care industry in China:

1) The scale of the industry maintains stable growth, and the consumption development potential is huge: with the rapid development of China's economy and the continuous improvement of urbanization rate, the strong domestic demand potential and development momentum have given major opportunities to the beauty and personal care industry, and the market scale of China's beauty and personal care industry has shown a rapid growth trend.

Statistics from CICC International Consulting show that the market size of China's beauty and personal care industry has grown rapidly from 253.5559 billion yuan in 2012 to 568.605 billion yuan in 2021, with a compound growth rate of 9.39%, and has developed into the world's second largest consumer market for beauty and personal care products after the United States. With the effective control of the novel coronavirus epidemic, offline stores gradually resume operation, and consumers tend to frequent offline social networking and work, the market size of China's beauty and personal care industry is expected to grow to 616.433 billion yuan in 2022

Although the overall market size has jumped to the second place in the world, the per capita consumption of beauty and personal care products in 2021 in China is only 402.70 yuan, although compared with the per capita consumption of 187.90 yuan in 2012 has increased significantly, but there is still a big gap compared with mature markets such as Europe, America, Japan and South Korea. As China's per capita disposable income continues to grow, people's living standards continue to improve, consumer demand continues to upgrade, the economic era of appearance level continues to promote people's yearning for and pursuit of beauty, beauty and personal care products consumption frequency and per capita consumption is expected to increase significantly, beauty and personal care products consumer market has a huge space for development.

2) Development status of the beauty and personal care industry segment: statistics show that skin care products with 50.36% of the proportion of the beauty and personal care industry in 2021 to become China's largest segment, makeup and hair care are the second and third largest segment.

① Development status of skin care market: Skin care products mainly include facial care, body care, hand care and care sets. As the segment with the highest proportion in China's beauty and personal care industry, the market size of China's skin care products in 2021 has reached 293.806 billion yuan, and the compound growth rate from 2012 to 2021 has reached 9.75%.

With the increasing awareness of consumers to prevent potential skin problems, the need for diversification and functional refinement in skin care programs has been created, and the skin care market, which focuses on developing new categories and meeting new needs, is expected to become the main driving factor for the steady growth of China's beauty and personal care industry in the next few years.

② Personal care market development status: Personal care products mainly include hair care, shampoo, deodorization and hair removal four categories. With the continuous improvement of people's living standards and the increasing awareness of personal hygiene and cleanliness, the demand for personal care products has shown a steady growth trend.

Statistics from CICC International Consulting show that in 2021, China's personal care market size reached 91.915 billion yuan, of which hair care products accounted for the highest proportion, reaching 65.019 billion yuan.

Shampoo itself has the attribute of daily consumption necessities, and has a broad market capacity and space to play. In addition, according to the statistics of the National Health Commission, China has more than 250 million people are suffering from hair loss, increasing work pressure and irregular daily work and rest lead to hair loss problems are particularly significant, which will greatly improve consumers' scalp maintenance, oil control and anti-stripping, fluffy and volumized personalized demands, functional shampoo with anti-stripping effect will be popular. It is expected to help shampoo become the largest single category of personal care products.

③ Sun protection market development status: With the improvement of Chinese consumers' awareness of the need for UV protection, the concept of sun protection has developed into a daily skin care habit throughout the year, whether indoor or outdoor, and the national sun protection is becoming a trend. The improvement of cognition also gives rise to the segmentation of the market, in addition to reducing the need for UV damage to the skin, to avoid skin aging and related skin diseases, post-sun repair, etc., has also become a consideration for consumers to buy sunscreen products. Driven by this, the scale of China's sunscreen market has increased year by year,

Statistics show that China's sun protection market grew from 6.816 billion yuan in 2012 to 16.714 billion yuan in 2021, with a compound growth rate of 10.48%.

Compared with foreign mature markets, the penetration rate of sunscreen products in China is low, and the per capita consumption of sunscreen products is only 11.8 yuan, less than one seventh of the per capita consumption of sunscreen products in South Korea. With the deepening of Chinese consumers' awareness of sun protection, China's sun protection market still has a lot of room for growth.

3) Overseas leading enterprises dominate, and the proportion of local enterprises is relatively low: in 2021, China's beauty and personal care industry CR10 and CR20 are 43.70% and 55.10%, respectively. Among the top 10 enterprises, there are 2 local enterprises; Among the top 20 companies, there are 9 local enterprises.

Although the market share of local brands is low, the combined market share of the top five local enterprises has increased from 6.2% in 2012 to 7.4% in 2021, a cumulative increase of 19.35%1. Local brands have significant advantages in product cost performance, sinking channel expansion, and young group consumption trend capture. In the future, with the local brand research and development investment, new product development, brand image upgrading, the market share of local brands is expected to continue to increase.

4) E-commerce channels have developed into the single sales channel with the highest proportion: e-commerce channels have the advantages of wide coverage, fast transmission speed, strong flow effect, accurate delivery of consumer groups, and their own social attributes, and have high compatibility with local beauty and personal care brands, cost-effective, heavy marketing and publicity. Therefore, in recent years, China's local brands have made efforts to online channels, continue to increase the investment of various resources in e-commerce channels, and continue to optimize online marketing and sales. Statistics from CICC International Consulting show that the proportion of e-commerce channel sales in the beauty and personal care industry has grown rapidly from 9.90% in 2012 to 38.60% in 2021, and has developed into the single sales channel with the highest proportion. The proportion of traditional convenience store and supermarket channel sales decreased from 37.50% in 2012 to 19.00% in 2021.

3. Industry competition pattern

(1) The overall competition pattern of the industry: with the continuous improvement of the urbanization rate, the continuous growth of per capita income, the steady upgrading of consumption structure and the gradual change of consumption concept, China's beauty and personal care industry has continued to expand its scale after years of development. According to the data of the State Food and Drug Administration, by the end of 2021, as a fully competitive industry, the number of licensed manufacturers of cosmetics in China has exceeded 5,000, the number of registered cosmetics products has reached more than 1.6 million, and there are many market participants, fierce competition in the industry, and a certain binary structure attributes. The high-end market with high consumption as the main audience in the first and second tier cities has a higher income of the target group, and pays more attention to product efficacy, specific ingredients and brand awareness. Multinational leading enterprises with years of established brand image and huge research and development capital investment, with a certain first-mover advantage, occupy a leading position in the high-end market. Statistics from CICC International Consulting show that in 2021, the high-end beauty and personal care market is mainly concentrated in large multinational leading enterprises, with the market share of the top ten enterprises 65.80%, in contrast, the competitiveness of local companies in the high-end market is slightly weak, accounting for only two of the top ten enterprises.

The mass market is the focus of local companies' efforts in recent years. Local enterprises with high cost performance, flexible marketing methods, characteristic design in line with local needs, and constantly improving product quality have risen rapidly, and have won the favor of mass consumers in third - and fourth-tier cities. The total market share of the top five local enterprises has increased from 8.40% in 2012 to 13.60% in 2021, and the market share has increased year by year. According to the statistics of CICC Qixin International Consulting, the market share of the top ten enterprises in the beauty and personal care mass market in 2021 is 43.60%, and the industry competition is more intense than that in the high-end market.

(2) Competition pattern in segmented areas:

① Skin care market competition pattern: As the largest subdivision of China's beauty and personal care industry, the skin care market competition is particularly fierce. Statistics show that the top five companies in the domestic skincare market share are L 'Oreal, Estee Lauder, Procter & Gamble, Shiseido and Pecorin. Leading foreign enterprises with their own technical advantages and long-term accumulation occupy the main share of the market, but a number of local enterprises represented by Baique Ling, Jialan, Shanghai Jahwa, Shanghai Shangmei, Huanya Technology combined their respective technical advantages and product characteristics to explore the main track suitable for their own development, and gradually become the forefront of the industry. The share of Huanya technology in the domestic skin care market is 0.90%, and the local enterprise ranks eighth.

Personal care market competition pattern: there are many categories of personal care market segments, and different segments have different industry characteristics and competition pattern. Taking the market of hair care products with the highest proportion as an example, Procter & Gamble Company firmly occupies the first position in this segment with a market share of 33.50%, and the market share of the top five enterprises reaches 66.80%, indicating a high industry concentration.

With the deepening of market segmentation, local enterprises are gradually breaking the competition pattern of foreign monopoly with differentiated products and personalized management strategies, and occupy a certain market share. Huanya technology to non-silicone oil technology and scalp care as the power point, Adolf main fragrance shampoo, Lafang main nutrition and smoothness. In 2021, Adolphe, Huanya Technology and lafang ranked 3rd, 6th and 8th in the industry with market share of 8.70%, 3.20% and 1.70% respectively.