The cosmetics section of any department store anywhere in the world
might usually be the first thing you encounter when you walk through the door,
but in China it's often a mirror maze on a vast and dazzling scale.
There are serried ranks of demonstrations as
shop assistants jostle for attention armed with French moisturizers, South
Korean all-in-one BB creams and Japanese lip glosses and violet eye shadows.
If department stores in Asia are the battle
ground for its emerging middle classes, then the cosmetics counter is its front
line.
Big demand
In China, cosmetics
now outstrips groceries as the biggest selling item in its department
stores, according to a report from Fung Business Intelligence Center.
In 2013, Chinese women, and increasingly men,
spent 162.5 billion yuan ($26 billion) on cosmetics in an industry that showed
13.3% growth year-on-year, according to the same report citing figures from
Euromonitor International.
Japan's annual beauty and personal care
market is still the largest in the region at about $50 billion, second in the
world only to the United States (which is about $70 billion), according to Euromonitor International.
But China's 150 million-strong middle class
is closing the gap fast.
For them, however, ground zero in terms of
models of beauty is increasingly South Korea.
While South Korea's domestic market is only a
third the size of China, in terms of soft power the country punches well above
its weight thanks to Asia's insatiable appetite for Korean drama series and
their stars.
China's middle class is expected to grow to
500 million within a decade. By 2030 around one billion people in China could
be middle class -- as much as 70% of its projected population, according to a
report from EY.
In terms of brands, according to Euromonitor,
L'Oréal China continued to hold the leading position in the Chinese cosmetics
market in 2013 with a value share of 34%.
And while South Korean brands might be little
known outside the region, thanks to the popularity of K-pop and Korean soap
operas -- whose stars such as Song Hye-kyo and Kim Hyun-joong and Yoona of
Girls' Generation are household names in the Asia-Pacific region -- Korean
beauty brands are now the hottest ticket item in China.
Star power
One Korean brand in particular, Laneige
(meaning the "the snow" in French) and made by South Korea's
AmorePacific Corp, is popular among China's middle classes. With its blue and
white design and French cachet, the skincare product benefits from the soft
power of being South Korean and, more importantly, cheaper.
Vivienne Rudd, director of global innovation
at market researcher Mintel, said South Korean beauty and personal care retail
market posted 5.8% growth year-on-year to 2013 compared with just 2.1% for the
UK and 3.9% for the US.
"The success of South Korean brands has
a lot to do with Chinese consumers copying the style of South Korean soap opera
and music stars," Rudd told CNN. "They'll even go so far as to get
the particular products being used by these stars. The stores will try to get
in the exact shades that South Korean actresses are using."
She said the same way that H&M and Zara
will get catwalk styles in quickly, South Korean retailers will do the same
with cosmetics.
"This is particularly true with lip
color," Rudd said.
Hot market
Increasingly, however, South Korea is setting
the standard for the growing market in skincare products, creating the
all-in-one BB creams -- which contain tints, moisturizer and even sunblock --
that have become so popular in Asia.
"South Korea is really the hot market
for innovation and it's even overtaken markets like Japan as the place where
everyone looks for the experts in skincare. The Chinese are fascinated by
facial skincare and by face color cosmetics," Rudd said.
"South Korean women are very much held
up as the standard of beauty across Asia."
Despite the coverage that South Korean brands
have received recently, it is still brands from Europe and the U.S. that rule
the roost in China.
Beauty expertise
"Western brands such as L'Oreal still
have the brand recognition in China," Rudd said, adding that because South
Korean brands have been slowing recently, they have been marketing more
aggressively in the Chinese market with products aimed directly at Chinese
consumers.
Apart from creating brands that build on the
idea that South Korea has a special expertise in terms of Asia beauty, South
Korean cosmetics are seen as lighter and more fun than their Western
counterparts.
"They are very quick to use catchy new
ingredients, thick textures and they're very careful with their pricing,"
she said.
In the meantime, however, Chinese brands have
not been slow to sell in their own markets with brands such as Shanghai Jahwa
emerging as a major competitor to Western brands, especially third and
fourth-tier cities in China.
"There's a certain cachet with French
brands, however, and it's amusing to see Chinese brands creating names in
Chinese that, when pronounced phonetically, sound very much like French
names," Rudd said.
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