Overview of consumer trends in personal care products in China

In the past year, the overall growth rate of China's personal care category has slowed down, and the price increase has been modest. However, the high-end trend of oral cleaning category and the rapid development of online shopping have injected impetus into the development of personal care category. In this still has great potential for development of the field, foreign manufacturers still occupy a dominant position, they have a wider consumer population and higher market share.

According to the monitoring of Chinese urban household samples by Kantar Worldpanel, as of June 2013, the market size of China's personal care products has reached 145 billion yuan. From the point of view of growth, the same period compared to a more obvious narrowing, has dropped from 15% to 9%. The slowdown in growth has been caused by several factors. Both the growth of the average household consumption has slowed down, and there are also factors that the overall price of the category is relatively stable, and its average price increase is only 2%, close to the overall trend of CPI. Overall, the average household makes about 19.6 purchases per year, with $896 spent on personal care items. Converted to the amount of each purchase, it is 45.7 yuan.

The high-end trend of oral care

When the personal care category is broken down into various sub-categories, skin care products account for more than 56% of the amount, and its growth rate of 9% is the same as that of the personal care category overall. The fastest growth was in oral care, which grew nearly twice as fast as the overall average at 17%. Can be said to be the driving engine of the overall personal care category. In second place, hair care contributed 22% of the share, and its growth rate was similar to that of personal cleaning at 6%, significantly lower than the overall average.

The upmarket trend of oral care is the only factor driving its high growth rate. Kantar Worldpanel conducted a continuous study on the shopping behaviors of 40,000 households and found that, on the one hand, more and more consumers began to try high-priced products; on the other hand, existing consumers would continuously increase the frequency of purchasing high-priced products. Major manufacturers in the context of meeting the consumer upgrade, are constantly launching their own high-priced products, such as Procter & Gamble's "shining white series" and "full effect 7 series", Colgate's "Light sense white" and comfort Da anti-sensitivity series. The new high-priced products are mainly focused on whitening, anti-allergy and oral professional care appeals. Coupled with Yunnan Baiyao, which has successfully established its market position of high-priced products with the concept of Chinese herbal medicine for anti-allergy, the entire oral care market appears unusually vigorous "upward".

Market dominance of provincial capitals and prefecture-level cities

In terms of the proportion of money, provincial capitals and prefecture-level cities are the two most important city levels, and the growth rate of money is faster than other levels of cities. Especially in provincial capitals, driven by price factors, the growth rate of average household consumption amount is significantly faster than the national average, reaching 9%, and the overall consumption amount growth rate is 12%, higher than the national average of 3%. Given that provincial capitals account for 22% of the total, it is particularly noteworthy that they have become the engine of the personal care category. (See Figure 2)

Traditional physical channels PK e-commerce

In terms of shopping channel choice, hypermarkets and supermarkets and convenience stores contributed more than 43% of the sales amount, meaning that they are still the preferred channels for consumers to purchase personal care products. Among them, the supermarket and convenience store channel grew by 12%, exceeding the average by 3%. From the perspective of consumers' shopping behavior, hypermarkets, supermarkets and convenience stores are still the channels chosen by the most consumers, and the frequency of purchase is also the most frequent. Hypermarkets are the channel with the highest spending per household, reaching 304 yuan per household per year.

Currently, e-commerce, as an emerging channel, contributes only 5% of sales to the personal care category, but the growth rate is very strong, reaching 33%, nearly four times the overall level. Nationally, 17.6 percent of consumers have shopped online in the past year, second only to department stores. At the same time, the number of consumers experimenting with online shopping is expanding rapidly, with the number of online shopping households increasing by 3.6% in the past year. The growth of consumer groups mainly came from key cities, followed by provincial capitals and prefecture-level cities. It is worth noting that the number of household online shopping in county-level cities has exceeded 15%, and its growth rate exceeds the overall growth of the country.

The average consumption amount of consumers online shopping is second only to that of hypermarkets, reaching 271 yuan per household per year. The main object of consumers buying personal care products online is the relatively high price of skin care products, accounting for 86% of the overall personal care category, hair care, oral cleaning and personal cleaning three subcategories of the market value combined accounted for 14%. Although the proportion is small, in the past year, the development rate of these three categories is very rapid, and the market growth rate of oral care products even reached 122%. (See Figure 3)

A three-way monopoly pattern of foreign capital

In the personal care category, foreign manufacturers still dominate the market. The three major manufacturers, P&G, L 'Oreal and Unilever, have their own brands in various subcategories, and P&G occupies 16.9% of the total share. In the past year, more than 93.1% of households have purchased P&G personal care products. It is followed by L 'Oreal, with 7.2% of the market, but only 24.1% of households have bought its branded products because of its focus on skin care products (see Figure 4). As a manufacturer that directly competes with P&G in all market segments, Unilever's consumer penetration rate has reached 72.5% and its dollar share has reached 6.1%. Colgate-palmolive's business is focused on oral care products, so its products can be purchased by more than 74.1% of households, but its market share is only 3.3%.