Cosmetics market-China2016.docxVIP

Colour Cosmetics in China Category Briefing | 07 Jun 2011 HEADLINES 9% current value growth from 2009 to reach RM14.3 billion in 2010 Consumer concerns and lack of tradition continue to limit sales in 2010 Eye make-up sees strongest current value growth of 13% in 2010 Players keep unit price increases below level of inflation in 2010 LOréal gains three percentage points in value share to lead with 37% share in 2010 8% constant value CAGR expected for forecast period TRENDS Colour cosmetics accounted for just RM14.3 billion in 2010 in comparison to RMB64.2 billion for skin care in the year but despite this saw a slower growth of 9% in current value terms in comparison to 13% growth for skin care. This is chiefly due to a lack of tradition for colour cosmetics, with many women being more comfortable without these products or only wearing them on special occasions. Young mid- and high-income women in first tier cities account for the bulk of everyday users, while many women in rural areas rarely wear colour cosmetics. Colour cosmetics consequently suffers due to a luxury positioning and also suffers a degree of consumer mistrust. Many are concerned that these products could be harmful, with many for example believing that foundation/concealer clogs the skin, that mascara can weaken lashes or that the chemicals in nail products are damaging to the health. Current value growth slowed towards the end of the review period in comparison to a review period CAGR of 11%. This was partly due to the ongoing impact of the economic uncertainty seen in 2009, when current value growth dropped to 6%. Slower growth was also due to a higher sales base and a more limited consumer base than for many other product areas in beauty and personal care. Many consumers are also continuing to use colour cosmetics purchased in the first half of the review period, as their occasional usage results in these products lasting for a long time. Eye make-up saw the strongest growth in 2010 over the