Women still spend to look like a million dollars
Their pockets may not be bulging as they once did, but young women in China still want to look like a million dollars. That’s proving a boon for the cosmetics and toiletries industry.
“I’ve bought fewer new clothes and had my hair done less often, but I haven’t reduced my spending on cosmetics because I consider them a necessity in my daily life,” said Vivien Tang, a Shanghai white-collar worker in a multinational company.
Tang is only one of many women who refuse to compromise their beauty even as an economic slowdown in China bites into consumer spending. International cosmetics companies have long regarded China as their strongest bet for growth, and vanity means vibrancy in sales despite a global recession.
Sales of makeup, skin-care products and other cosmetics in China ranked third in the world, behind Japan and the United States last year. The China Association of Fragrance, Flavor and Cosmetics Industries said it expects nationwide sales of 130 billion yuan (US$19.1 billion) this year.
Euromonitor International, a market research and consulting firm, is forecasting almost 11 percent growth a year in skin-care products in the five years ending 2013, while the growth rate for makeup in that same time period is pegged at almost 10 percent.
L’Oreal Group, the world’s largest cosmetics and beauty company, achieved sales of 6.95 billion yuan in China last year, up 28 percent from a year ago. The French company said that equated to 35 percent growth in terms of the euro, given the strengthening yuan.
“We are confident China’s cosmetics market will sustain a relatively fast growth, judging from the sales performance in the first quarter,” said Paolo Gasparrini, president of L’Oreal China. But “growth might not be as fast as last year.”
In fact, as individuals began to tighten their purse strings, industry analysts say they see evidence of the “lipstick effect,” which refers to the tendency of consumers to purchase small, comforting items during a recession even if they have to cut back on more upscale spending.
“We are finding sales of (makeup) foundation in China enjoying faster growth than that of lipsticks actually,’” said Liang Weijia, director of communications for Sasa International Holdings Ltd, a leading cosmetic retailer in Asia. “Foundations are showing the fastest growth among cosmetics products.”
Liang said skin-care products are also performing well. Sales of cosmetics in Sasa outlets chalked up double-digit growth in the first three months of this year.
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To the point and an excellent article.