China Luxury Cosmetics. June 2012. osec.ch
China Luxury Cosmetics. Title.
China Luxury Cosmetics.
Language.
English
Number of pages.
89 pages
Content.
China is changing. It is expected that the major growth driver for the economy will now be consumption rather than investment. This development in general and a fast growing middle and upper class make China a very attractive market for high quality consumables in general and especially for luxury products. Consumption of luxury goods is estimated to grow 18% annually in the next 4 years and will by then account for over 20% of the global luxury market, overtaking Japan as the largest market. This report will deliver an insight into the market situation of luxury goods in general and cosmetics in particular. It will assist to understand the luxury cosmetics market environment better by analyzing the competitive landscape, the distribution system and the regulatory framework. Also, some suggestions on market entry strategies are given.
Author.
Compiled by: Swiss Business Hub China In collaboration with: CBC Business Consulting
Table of Content Research Background…………………………………………………….….…..4~5 Macro Environment Analysis ……………………………………………..…......6~7 Luxury Market Overview ……………………………………………………… Luxury Cosmetics Market
8~14
………………………………………………… … 15~25
Competitive Landscape……………………………….………....................…. 26~70 Distribution System…………………… ……………………….…… .......….... 72~74 Regulatory Framework………………………….………………...................... 75~83 Conclusions & Recommendations…………………………….………………. 86~89
3
China Luxury Market Overview Luxury Goods- Definition A luxury product: a thing that is expensive and enjoyable but not essential
Must appear to be exclusive and of high quality.
Sold in a suitable environment, at a relative price level that is out of line with any rational view of the product’s usefulness.
Under a brand name that conveys a certain image.
Categorization and General Characteristics of Luxury Goods in China Class A
Private jet/plane, yacht, luxury automotive
Class B
Luxury watches, jewelry, precious metal
Class C
Apparels/shoes, handbags, cosmetics, etc.
Very exclusive to a few Less exclusive and becoming daily necessities for many & more Still exclusive to
Distribution System Traditional retail channels, particularly beauty counters in well-known and high end shopping malls or department stores are still predominant in the distribution and retail of luxury cosmetics.
The great majority of luxury cosmetic brands have been actively fighting for the best spot at various landmark dept. stores.
Some major department stores or shopping malls in tier one and tier two cities, which are always the first option for cosmetic companies to consider:
Beijing: SCITECH Plaza, Lane Crawford, Parkson, Shin Kong Place, Capitaland, Intime, Lotte, etc.
Shanghai: Plaza 66, Maison Mode, CITIC, Xintiandi, Jiuguang, Hongqiao Friendship, Isetan, Orient Shopping Centre, Raffles, etc.
Hangzhou: Hangzhou Tower, Intime, Baida, Jiebai,
Guangzhou: Guangzhou Fiendship, Laperle, etc.
Chengdu: Renhe Spring Department Store
For instance, Beijing Shin Kong Place houses approximately 40 luxury or upper end cosmetic brands, including Chanel, Dior, Estee Lauder, HR, Jurlique, La Colline, Origins, Shiseido, swissweda, Cosme Decorte, La Prairie, etc.
Online Shopping Retail Channel
With the fast-growing trend of online shopping in China, especially with the boom of Taobao which is the most well-known online shopping portal in China, various cosmetic brands have also launched online shopping system, especially those 71