In 2022, wellness and anti-aging snacks and Chinese traditional medicine They were in fashion. Chinese consumers took their health seriously, especially as the country continued to battle the pandemic, and it went from looking good to feeling good. They had fun too imitating makeup looks of their favorite television characters and sharing their creations on social networks.

While it’s hard to forecast the microtrends of 2023, there are certainly broader consumer behaviors that are taking hold and serving as growth hotspots for savvy brands. Looking at recent consumer reports, product launches at trade shows, and growth projections for different sectors, daily jing has identified the major macro trends shaping China’s beauty industry below.

Consumers are willing to spend on premium brands and ingredients, even in tough times.

Euromonitor predicts that premium beauty could make up 53 percent of market share by 2025 in China. McKinsey’s Latest China Consumer Report supports this growth, noting that even during these uncertain times, “consumers still switch to more premium brands when looking to reward themselves.”

While some beauty groups with luxury divisions are already reaping the benefits, others are preparing to ride the wave. For example, the ultra-premium brand of Coty orveda is scheduled to launch in China in 2023, and Ligne Princiére de Lancaster will be available on the mainland from March. Meanwhile, Estée Lauder has agreed to buy the Tom Ford brand (which includes the brand’s beauty, apparel and accessories lines) by the end of 2022 to “fuel our momentum in the up-and-coming luxury beauty category for the long term.” said CEO Fabrizio Feda.

Orveda booth at the China International Import Expo 2022. Photo: Weibo

As demand for premium products increases, Allison Malmsten, director of marketing at Daxue Consulting, reminds brands that local consumers are looking for more than price. “Brands that communicate their premium status need to focus on highlighting their ingredients. She knows that Chinese skin intellectuals are reading the label on her products very carefully.”

Sun protection, whitening, skin rejuvenation and anti-aging: brands will increase R&D on these four consumer must-haves.

As Malmsten points out, Chinese consumers are paying more attention to ingredients. according to a Sephora and China Business News 2022 White Paper“sun protection and whitening”, “skin rejuvenation and anti-aging”, “moisturizing and soothing”, and “cleansing and oil control” have become the top four must-have items for local consumers, indicating their focus on effectiveness.

While global conglomerates often dominate beauty product sales thanks to their reputation for quality (only two of the 10 top-selling skincare brands on Tmall during Double 11 were Chinese), local brands may sneak up on them by 2023. Chinese cosmetics giant Florasis, known for its traditional Chinese aesthetics and social media marketing, announced which would invest 1 billion RMB in product innovation and build five major R&D centers. Other players like PMPM and Proya have hired scientific directors to improve their offerings.

Spurred by the proof of efficacy, “consumers will continue to move toward clinical brands founded by doctors and chemists,” explains Carol Zhou, Shiseido’s senior vice president of China Business Innovation and Investment. Malmsten adds that premium Chinese skincare brands could have an advantage here, as they cater to the issues experienced by the Chinese: “One example is the Chinese brand Winona, where the entire brand is dedicated to sensitive skin.”

YSL’s Scent-Sation, Shiseido’s holistic beauty technology signals greater personalization through AI

But customers don’t just want the best products, they want the best products. for them. And one way that brands have started to meet this demand is by leveraging artificial intelligence to provide personalized analytics and products.

At the 2022 China International Import Expo, L’Oréal introduced the YSL Scent Sation to China, which uses EEG-based headsets and machine learning algorithms to give personalized fragrance advice. Amorepacific similarly showed off its Mind-Linked Bathbot, which creates personalized bath bombs by analyzing a person’s brain waves. Prior to this, Japanese beauty giant Shiseido started a program to support startups working with “medical beauty tech” and “holistic beauty tech,” reiterating the trend for tech-driven beauty solutions.

Amorepacific’s Bathbot creates personalized bath bombs by analyzing a person’s brain waves. Photo: Amorepacific

This trend is not surprising. Chinese consumers are “some of the most tech-savvy consumers in the world” and expect their beauty shopping to be just as convenient and interesting, says Shiseido’s Zhou. Jing Diary. “By leveraging technology, such as a personalized skin diagnostic tool, individualized skin monitoring, and personalized regimen/personalized products, we build a much stronger relationship with our consumers.”

From Florasis’s first offline boutique to Armani Beauty’s global flagship in China: physical retail is not dead

While shooting ads for closure of physical stores may paint a bleak picture for brick-and-mortar, the format will remain critical in 2023, especially as the country emerges from COVID-zero. The aforementioned Sephora study also describes that “in the offline scene, consumers satisfy their desires for professionalism, security, prestige, comfort and a sense of luxury through beauty classes, casual makeup tests, musical atmosphere and exquisite exhibitions”.

In December 2022C-giant beauty Florasis opened its first brick-and-mortar store, Armani Beauty launched a high-touch global flagship in China, and niche perfume house L’Artisan Parfumeur opened its first boutique in Hangzhou. Perfect Diary, Takami, Aesop and Documents also opened new offline branches or pop-up stores in China in the last quarter.

Florasis opened its first physical store in December 2022, creating an art gallery-style space in Hangzhou. Photo: Florasi

“C-beauty is fully ready to enter the retail business,” says Gabby Chen, beauty director at Lane Crawford China. “International brand might be more hesitant about investments considering the COVID policy of the last three years, however, I think 2024-25 will have a big wave of new growth for international brands to enter China.”

Makeup Metaverse: Expect More Web3 Beauty Experiences

At the 5th World Artificial Intelligence Conference in 2022, Liu Minghua, Deputy CEO of Deloitte China, stated that China’s metaverse market is forecast to reach $5.79 trillion (RMB 40 trillion) by 2030, which equals 20% of the country’s GDP. Its future is also bright, considering it has the backing of the Chinese government: Beijing wants to multiply by six a whopping virtual reality industry by 2026.

As the infrastructure develops, more beauty brands will dip their toes into the Web3 pool. 2022 already saw a slew of activations: L’Oréal Group just unveiled a “Lancôme Rose Garden” on Tmall and WeChat, launched a Web3 online community for Urban Decay, debuted a metaverse space for Maybelline New York during Double 11, and even he created his own virtual KOL for his Yue Sai label called Yuxixi.

L’Oréal’s Yue Sai brand revealed its own virtual KOL, Yuxixi, in September 2022. Photo: Yue Sai

“In 2023, we will continue to open the door to new frontiers of beauty, including Web 3.0/Metaverse, to reinvent beauty experiences… catering to the next generation of consumers, their ‘digital cravings,’ and aspirations,” writes an L’ Oréal Spokesperson for China. Looking at the potential of virtual KOLs in particular, the company claims that branded KOLs like Yuxixi allow for high customization and control in diversified business scenarios, while digital native idols like Ayayi could strengthen brand resonance as they They represent Chinese pride and Z Gene- aesthetics.