Cosmetics sales hit the largest increase in 8 years, and vigorous promotion became the "key" of growth

Source: Securities Daily

On January 17, the National Bureau of Statistics released data showing that the total retail sales of cosmetics in 2021 reached 402.6 billion yuan, compared with 340 billion yuan in 2020, an increase of 18.41%, the largest increase in total retail sales of cosmetics in 8 years.

Not long ago, the State Food and Drug Administration issued the "Cosmetics Production Quality Management Practice", which supervises the whole process of product production, puts forward higher requirements for cosmetics production equipment and production environment, and raises the threshold for new brands to enter.

Chen Wen, chief analyst of the large consumption group of Wanlian Securities Research Institute, said in an interview with the Securities Daily reporter that under the influence of the epidemic and the tightening of supervision and other factors, the total retail sales of cosmetics have grown against the trend, mainly related to the continuous expansion of consumer groups and the increasing frequency of consumption. In the medium and long term, there is still room for the improvement of cosmetic penetration rate and consumption frequency, and the two will continue to drive the market to continue to improve.

Industry Growth "Key"

From March to June 2021, the monthly growth rate of total cosmetics retail sales was 42.50%, 17.80%, 14.60% and 13.50%, respectively, all of which outperformed the growth rate of total social retail sales; although the growth rate began to decline from July, and even zero growth in August, from October, the total retail sales of cosmetics once again led the growth rate of social retail growth.

It is worth noting that the total retail sales of cosmetics in 2021 totaled 7 months (March, May, June, September, October, November, December) of more than 30 billion yuan in a single month, and in November hit a full-year peak of 57.1 billion yuan, which was 33.2 billion yuan higher than the lowest value (total retail sales in July of 23.9 billion yuan).

Chen Wen told reporters: "This is first based on the continuous expansion of cosmetics consumer groups, related products quickly penetrate into the exquisite young generation, there are trends such as 'young age' and 'male consumption'; second, from the perspective of consumption frequency, the frequency of chinese people using cosmetics continues to increase, consumption gradually changes from optional to mandatory, and young people's emphasis on appearance promotes the rapid growth of cosmetics consumption." ”

Cosmetics industry analyst Li Jingyi believes that these months almost all appear before and after various "big promotions": "March 8 Women's Day", "618", "Double 11" and "Double 12", and promotional activities have become an important driving force to promote the growth of the cosmetics industry.

According to the data, thanks to the first big promotion node in 2021, the total retail sales of cosmetics in March 2021 increased by 42.5% year-on-year, the largest increase in 2021.

Collection store successfully "breakout"

In terms of channels, due to the epidemic, the live broadcasting industry has developed rapidly in the past two years, and the cosmetics industry has also benefited from it. However, according to the data released by Guoyuan Securities, the turnover of Taozhi cosmetics in 2021 was 254.318 billion yuan, down 8.72% year-on-year.

In this regard, Wu Daiqi, CEO of Shenzhen Siqisheng Company, told the Securities Daily reporter: "The decline of Tao's cosmetics is not unrelated to the decline in the traffic of the entire Tao's e-commerce. Diversion is mainly reflected in the following aspects: first, it is affected by the live e-commerce of the two major short video platforms of Kuaidi; second, the epidemic has caused many platforms that rely on social networking to rise, and some goods are sold through social media; third, the rise of cosmetics collection stores, providing young consumers with more shopping place choices. ”

Ai media data show that in 2020, the market size of China's cosmetics collection store industry is 41.9 billion yuan, of which the proportion of new beauty collection stores reaches 7.6%. It is expected to increase to 15.8% in 2021, and the market size is expected to reach 13 billion yuan.

Tian Liming, vice president of Hemaheda Group, believes that the proportion of online channels and offline channels of cosmetics may tend to stabilize. Among them, the line has gradually saturated and entered the stage of stock competition, and it is difficult to erupt again, but there is no need to worry about rout.

Today, consumers value the ingredients that make cosmetics. According to Ai Media Consulting data, 63.9% and 53.9% of consumers believe that product effect and product composition are important factors in their purchase of cosmetics.

In the past two years, the functional skin care products of Bloomage Biology, one of the three giants of "hyaluronic acid", have ushered in explosive growth. In 2020, the revenue of this sub-product was 1.346 billion yuan, an increase of 112.30% year-on-year, accounting for more than 50% of the company's total operating income for the first time, reaching 51.13%. From 2017 to 2019, the operating income of Bloomage's functional skin care products was only 0.95 billion yuan, 290 million yuan and 634 million yuan, respectively.

Chen Wen believes that the reason for the rapid growth of the mainland functional skin care market is that "from the demand side, affected by environmental changes, increased pressure and improper skin care and other factors, the sensitive skin group of Chinese people is increasing, and the proportion of sensitive skin groups in mainland China is currently 1/3; at the same time, under the publicity and education of social media platforms, the awareness of sensitive skin care of Chinese people has gradually increased; from the supply side, brand, research and development, channels and marketing have built barriers for the industry, making the market concentration of functional skin care products higher. For example, the top three and top five brands in terms of business scale reached 47.4% and 61.7% respectively. With the tightening of supervision in the cosmetics industry, the head enterprises with R&D, channels, marketing, branding and other advantages are expected to be strong. ”

Reporter Li Chunlian

Trainee reporter Wang Jingru