Prestige Beauty is China’s Next Growth Engine

In mid-January 2022, Shiseido decided to sell two of its brands, Za and Pure&Mild, to a beauty brand management group. The deal is expected to close this year. So far, in more than a year, Shiseido has sold 15 mass and cosmetics brands, which further signals that Shiseido is concentrating on more prestige and premium business segments.

The Japanese giant attributed its business growth in China to its high-end brands’ growth, according to its annual financial report for 2021. During Singles’ Day in November 2021 in China, its prestige segment grew 1.5x. Brands with the most improved rankings included Shiseido, Clé de Peau Beauté and Nars.

Just before the COVID-19 pandemic started, China’s demand for luxury beauty had been on the rise. According to CBN Data’s statistics, the sales scale of high-end beauty reached 151.8 billion RMB ($24 billion) in 2019, accounting for 51% of total cosmetics retail sales, with market share surpassing that of mass beauty for the first time.

Well-being Driving China’s Market

The craze has evolved post-pandemic. If COVID-19 has taught Chinese customers one thing, it is that health is earned rather than given. This is true for both physical well-being, as well as skin health. The pandemic has fostered the overall awareness of self-care and shifted the focus to skin care products, as consumers are paying more attention to skin health. Because everyone wears a mask, there are fewer reasons to wear makeup and fewer opportunities to go out. With China’s disposable incomes continuing to rise, high-end and efficacious skin care products are more likely to be recognized for their ingredients and technology, resulting in significant sales growth for high-end beauty products.  Read the full article at Global Cosmetics Industry.