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August 12th, 2020

As China’s business economy gets fully back on track, the consumer industry also moves in tandem, and high-end beauty brands have begun to restart omni-channel marketing. Latest research from the world’s leading market intelligence agency Mintel reveals that new products at prestige/luxury price positions comprised 25% of total new facial skincare products launched in 2019 before the outbreak of COVID-19, remaining at a similar level to previous years.

Of course, effectiveness remains the top reason for using prestige products. From Mintel data, nearly 60% of consumers are looking for anti-aging benefits in high-end skincare products. Anti-ageing related benefits such as ‘increases skin’s firmness/elasticity’ (63%) and ‘provides antioxidation’ (60%) are the most sought after benefits from prestige skincare products. 54% of respondents have used prestige skincare products to moisturise skin, which is the fourth most sought benefit from prestige products. 44% of consumers spend more than RMB500 on facial serum/essence/concentrate while 38% spend more than RMB500 on eye cream/essence.

Amy Jin, Mintel Beauty Analyst said, “Consumers will still have demand for high-end skincare products, and there is a chance that prestige BPC can perform well during an economic downturn, as people may drop big ticket spending (such as travel or big luxury items) for smaller indulgences, which is an opportunity for this category. Meanwhile, China’s economy has started to recover and brands are expected to resume their offline services and retailing channels in the latter half of 2020.”

Technology Bolsters High-end Innovative Brand Image

The innovative image presented by high-end brands is deeply rooted in people’s hearts. According to Mintel data, 59% of consumers believe that “developed by experienced researchers” and “uses advanced processing techniques” are the most important features associated with a brand’s premium image.

Mintel’s 2030 Beauty and Personal Care Trends also shows that in the near future, science and technology will play an important role in skincare; the “vegan” trend will involve people’s understanding of biotechnology. As products cultivated in laboratories continue to enter the market, consumers’ acceptance of biotechnology will also increase. For example, laboratory-grown ingredients such as biotechnology and probiotics can lead new trends.

Amy Jin continued, “Brands need to create an image for their products, that is, to emphasize their scientifically proven ingredients, innovative process techniques and professional verified effectiveness. They need to convey how the brand uses advanced technology to produce skincare products. In fact, across categories, the top three factors that make consumers willing to consume and upgrade are high-quality raw materials (ingredients), the latest technology and social responsibility.”

High-end Opportunities for Chinese Brands

However, although 80% of consumers said that “prestige skincare brands have the best technological innovation”, a large number of interviewees believe that high-end skincare brands are expensive because of their high reputation and advertising. In addition, Mintel’s COVID-19 China tracker research which was conducted from 25 March to 1 April 2020 shows that 77% of

consumers would like to buy more Chinese brands to show support after the outbreak. Meanwhile, 45% of consumers surveyed disagree with the statement that “domestic skin brands do not have many prestige products”.

Mintel’s research has further revealed that when it comes to BPC products, consumers will scrutinize the necessity of discretionary spending to control spending, but they are the least likely to trade down for a cheaper brand.

“Chinese consumers have high trust in prestige BPC products not because of their marketing stories but because they believe that their products are genuinely more advanced. They are also willing to invest more to get better results. To that end, the demand for prestige BPC products remains solid in the long-term. At the same time, consumer support for domestic products has further increased due to the pandemic, and niche domestic brands are indeed expected to develop high-end product lines and gain market share.”Amy Jin concluded

*3,000 internet users aged 20-49, February 2020.