Personal care industry development status analysis Personal care industry is on the rise

1. Market overview: China's personal care consumption continues to increase its global market share

Although the personal care industry has been affected to a certain extent during the epidemic, the market has high long-term development potential. According to the data of Insight Consulting, the scale of China's personal care market grew to 458.7 billion yuan in 2019, far exceeding the 305.8 billion yuan in 2015, with a compound annual growth rate of 10.7%, and is expected to grow to 701.4 billion yuan in 2024, with a compound annual growth rate of 8.9%. Under the severe impact of the new coronavirus epidemic, data from the National Bureau of Statistics show that the cosmetics category will still achieve 9.5% growth in 2020.

The proportion of China's personal care products consumption in the global market scale is on the rise. Since 2011, China's share in the global market has surpassed Japan to become the world's second largest cosmetics market. According to IIMedia Research, China's share of personal care consumption in the global market increased from 9% in 2013 to 11.8% in 2019, and is forecast to reach 12.9% in 2021. Domestic emerging brands, relying on highly digital, technology-driven omni-channel direct consumer (DTC) and other distribution models have risen rapidly, taking the lead in seizing the domestic sinking market.

2. Market segment status: "skin care" and "makeup" have broad prospects, and improving ingredients and experience is the king

Compared with developed countries, China's per capita personal care consumption has a large growth space, and makeup consumers are young and low-line. China's per capita consumption of makeup products in 2019 was about 39 yuan, while Japan, South Korea and the United States were 421 yuan, 321 yuan and 390 yuan, respectively. Chinese makeup consumers are young and low-line. Euromonitor data show that compared with European and American markets, the penetration rate of China's makeup market, especially in cities below the second and third tier, still has room for improvement.

Skin care products account for most of the consumption in the personal care market, and the makeup market has great potential. Driven by the epidemic, the rise of "mask makeup" has driven the sales of eye beauty products, and the problem of "mask face" has made anti-acne and anti-allergy skin repair facial essence popular. According to Euromonitor data, from 2016 to 2019, the proportion of skin care consumption in personal care consumption increased from 50.6% to 52.4%, the growth rate increased from 6.6% to 13.3% and is expected to reach 14.7% in 2023. The proportion of makeup consumption in personal care consumption increased from 8.3% in 2016 to 12% in 2019, the growth rate increased from 11.4% to 25.3% and is expected to achieve 27.4% in 2023.

2.1. Normal improvement of skin care functional needs such as repair and anti-sensitivity

In the post-mask era, repair and anti-sensitivity have become mainstream skin care trends. In the context of the new coronavirus epidemic, 50% of consumers pay more attention to skin care, and gradually establish a healthy skin care concept during the home, and more than 60% of consumers have skin allergies, breakouts, and enlarged pores in the post-mask era. According to CBNData, 57% of male consumers experience skin problems after wearing a mask, and the proportion of female consumers is as high as 69%. Different genders in choosing "mask face" skin care products, the most concerned factors include product safety, efficacy and product ingredients, and they have higher trust in professional dermatologists and expert opinions.

2.2. The concept of "ingredient Party" and "clean skin care" is the future development trend of domestic brands

The circle of "component party" continues to expand, and both component and functional skin care products are the future direction of domestic brands. The concept of "clean skin care" focuses on no added and natural organic products, rejecting harmful substances and supporting zero harm, which has gradually become a popular trend. China's "division party" emerged in 2014-2015, and brands began to use ingredients to define product efficacy. According to Euromonitor statistics, since 2012, the scale of dermatology grade products in China has been on the rise, and in 2019, the scale of dermatology grade products in China was 13.55 billion yuan, with a faster growth rate of 32.3%. From 2016 to 2019, China's dermatology grade skin care products grew at a CAGR of 25.7%, far exceeding the overall growth rate of skin care products of 12.9%. According to iResearch consulting data, ingredients and efficacy, cost performance and brand protection are the three most concerned factors of beauty and skin care consumers, especially sensitive muscle consumers, more than 60% of the requirements of natural ingredients. The domestic "raw material bucket" representative brand Home Facial Pro entered the top 10 beauty sales on Tmall in 2018, and the annual sales scale exceeded 1 billion. 诺斯贝, as a domestic Clean Beauty enterprise with relatively mature technology, has established relevant technology and processing very early, and has long-term development prospects.