The cosmetics industry is fragmented, with local brands regaining market share
The competitive landscape of cosmetics in China is scattered, and there is significant room for improvement in brand concentration.
According to Euromonitor data, the CR10 of China's cosmetics market is 28.9%, with a relatively scattered pattern.
In contrast, the US cosmetics market has a CR10 of 57.7%, while the top two brands in the Korean cosmetics market, Amory Pacific and LG Life Health, account for over 45% of the Korean cosmetics market share.
In the future, with the continuous enhancement of consumer brand awareness and the trend of industry mergers and acquisitions integration, there is still significant room for improvement in the concentration of the cosmetics industry, which also nurtures the growth potential of leading companies.
Foreign brands have long held a dominant position in the beauty market.
Foreign brands led by Japanese and Korean brands, as well as European and American brands, have long held a dominant position in China's cosmetics market. In 2017, among the top ten brands in China's cosmetics market share, domestic brands only held three places, namely Shanghai Shangmei (with brands such as Hanshu and Yiye), Shanghai Baique Ling (with brands such as Baique Ling and Sanshenghua), Jialan Group (with brands such as Naturaltang and Meisu), and the rest are foreign brands;
Among the listed companies, Shanghai Jiahua holds the 11th place in China's cosmetics market with a market share of 1.9%, while Praia has a market share of about 1.0% and Yujiahui has a market share of about 0.5%.
The outstanding performance of foreign brands is mainly concentrated in the high-end market and cosmetics and other categories.
From the perspective of high, medium, and low-end markets, according to statistics from Yibang Power Research Institute, if 200 yuan is used as the boundary between the mass and mid to high-end markets, the market share of local brands in the top 40 brands in the high-end cosmetics market in 2017 was only 7.7%, while in the top 30 brands in the mass cosmetics market, the market share of local brands reached 23.1%.
In terms of category, according to Euromonitor data, among the top ten skincare brands in 2017, local/international brand shares were 14%/86% respectively, while among the top ten brands in the cosmetics market, local/international brand shares were 5%/95% respectively. It can be seen that the advantages of foreign brands are mainly concentrated in the high-end market and cosmetics categories.
In recent years, Chinese cosmetics brands have risen strongly and their market share has gradually increased.
In recent years, with the strong rise of domestic cosmetics brands, local brands are gradually regaining market share. According to Kaidu's report, the market share of foreign brands in the skincare and makeup fields has been negative for four consecutive years from 2013 to 2017;
In addition, according to the consumer survey report released by McKinsey, in 2016, the domestic preference rate of consumers for personal care/facial care/foundation make-up/cosmetics and other categories was 81%/61%/57%/51% respectively, more than half of them.
Benefiting from the continuous investment and R&D accumulation of domestic brands in technology, raw materials, formula research and development in recent years, the product quality of some domestic brands is no longer inferior to that of international brands. In the future, as consumers' recognition of national cosmetics brands further increases, high-quality domestic brands are expected to benefit from the dual drive of market expansion and share increase.