Table of Contents
Overview
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- What you need to know
- Key issues covered in this Report
- Report Scope
- Subgroup definitions (Prestige Products Users)
Executive Summary
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- Market and competition
- Impact of COVID-19 on Prestige BPC products
- Long-term impact of COVID-19 will be limited
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- Figure 1: Short, medium and long term impact of COVID-19 on prestige BPC products, April 2020
- The consumer
- Facial serum and eye cream stand a higher chance to perform better after the outbreak
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- Figure 2: Money spent on different products, February 2020
- Leading brands have not changed but Estée Lauder has successfully captured more younger users
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- Figure 3: Top prestige skincare brands used in the last six months, February 2020
- Pursuit of healthier skin condition is an important driver of using prestige BPC
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- Figure 4: Benefits sought when using prestige products vs regular products, February 2020
- Advanced R&D is the key to obtaining prestige image
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- Figure 5: Features associated with prestige skincare brands, February 2020
- Getting better results remains the top reason for using prestige brands while innovative product features saw an increase
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- Figure 6: Reasons for using prestige brands, January 2018 VS February 2020
- Consumers have a high trust in prestige brands including domestic brands
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- Figure 7: Attitudes towards prestige products, February 2020
- What we think
The Impact of COVID-19 on Prestige BPC Products
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- Figure 8: Short, medium and long term impact of COVID-19 on prestige BPC products, April 2020
- Opportunities and Threats
- Loss in duty-free shops can be a win for others
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- Figure 9: Sunrise duty-free WeChat mini program, China, 2020
- Limited long-term impact of COVID-19 on prestige skincare
- Growing confidence in domestic brands pave ways for them to go upmarket
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- Figure 10: HomeFacialPro’s sunscreen product,China,2020
- Figure 11: Yuesai’s campaign,China,2020
- Flexible product sets to attract consumers’ interest during the outbreak
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- Figure 12: Lancôme combo set
- Impact on the market
- E-commerce saves the day as sales decrease for leading players
- Shifts in consumer behaviour
- More prudent consumers under financial uncertainty
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- Figure 13: Change in spending on BPC, January to april 2020
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- Figure 14: Ways of control spending on beauty and personal care products, January 2020
- How COVID-19 Will Affect Key Consumer Segments
- Key consumer segments
- Affluent consumers are more financially confident
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- Figure 15: Confidence on financial situation, 25 February– 6 March, 2020
- Key consumer segments
- Consumers of younger age spend more time on beauty
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- Figure 15: Time spent on searching beauty products (eg watch beauty products' live streaming, watch make-up vlog), 25 March – 1 April, 2020
- Consumers of higher income are experiencing more products
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- Figure 16: Used types of facial skincare products (eg mosituriser, facial serum, eye cream, facial mask), 25 March – 1 April, 2020
- How COVID-19 will reshape the industry
- Online channels will lead other channels instead of supplementing them
- Higher expectations for ethical brands
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- Figure 17: Actions that improve brand impression, 28 February – 6 March, 2020
- Impact on the marketing mix
- Live streaming become one of the mainstream retail channels
- Need stronger evidence to justify premium prices
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- Figure 18: Darphin’s multi-purpose serum
- Figure 19: Clé de Peau’s multi-purpose serum
- Clean beauty becomes more relevant to China’s market
- COVID-19: China context
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- Figure 20: Accumulative confirmed cases of COVID-19 in China, January to April 2020
- Figure 21: Status of returning to work, China, March and April 2020
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Issues and Insights
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- Attaining synergy to focus on anti-ageing benefits as well as other basic needs
- The facts
- The implications
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- Figure 22: Foreo’s day and night combo, China, 2019
- Figure 23: Fresh’s hydration combo, China, 2020
- Brands using scientific techniques and delivering innovative images are capturing the prestige market
- The facts
- The implications
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- Figure 24: Estée Lauder’s product story,China,2020
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- Figure 25: Helena Rubinstein brand story,China,2020
- Professional services will become more important in the success of prestige BPC
- The facts
- The implications
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- Figure 26: La Prairie’s online services
Market and Competition – What You Need to Know
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- Serum/Essence is the most active in prestige NPD in China
- Niche international brands joining Chinese market
- More ways of enhancing prestige brand image
Market Overview
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- Figure 27: Price positioning of new product launches in facial skincare category, China, 2017-2019
- Figure 28: Price positioning of new product launches in facial skincare category, by sub-category, China, 2019
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Market Factors
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- Impact of COVID-19
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- Figure 29: BA live streaming on Tmall, China, 2020
- Figure 30: Sulwhasoo’s new eye cream, China, 2020
- More international brands entering China’s prestige BPC market online
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- Figure 31: Niche brands opening Tmall official stores, China
- Prestige brands secure high awareness through various online channels
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- Figure 32: Lancôme live streaming, China
- Ingredient stories become powerful in convincing consumers to pay for premium products
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- Figure 33: Guerlain’s Abeille Royale serum, China
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- Figure 34: Decorte’s Emulsion First concept, China
Competitive Strategies
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- More marketing themes centring on female independence
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- Figure 35: L'Oréal Weibo post on International Women’s Day, China, 2020
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- Figure 36: Dior WeChat advert, China, 2020
- Prestige brand image created through art exhibitions
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- Figure 37: SK-II art exhibition in Shanghai, China, 2019
- Figure 38: Lancôme’s exhibition poster
- Effective solutions for late night lifestyles
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- Figure 39: Clarins’ Recovery serum, China
- Figure 40: Guerlain’s Midnight Secret moisturisers, China
- Vitamin brands launching beverages to enhance beauty from within
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- Figure 41: Bio-E Lemon drink/Swisse juice drink, China
- Developing brand expertise in solving specific skin issues
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- Figure 42: POLA white shot, China
- Figure 43: Elixir eye cream, China
Who’s Innovating?
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- More prestige skincare products focused on anti-aging
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- Figure 44: Top 10 claims as percentage of prestige products newly launched, China, 2017-19
- Figure 45: Top 10 claims as percentage of masstiage products newly launched, China, 2017-19
- Flower extract ingredients
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- Figure 46: Facial skincare products with flower extract, China, 2019 and 2020
- Anti-stress claims
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- Figure 47: Facial skincare products with anti-stress claims, Norway and US, 2020
- More focus on dermocosmetics
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- Figure 48: Tula’s probiotic products, US, 2019
- Figure 49: Dermocosmetics products, UK, 2020
The Consumer – What You Need to Know
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- Consumers are willing to pay more for facial serum than eye serum
- Estée Lauder and Lancôme have the highest penetration
- To increase skin’s firmness/elasticity and antioxidation are the top two reasons for using prestige brands
- Using prestige brands to get better results and more confidence
Price Spent on Different Skincare Products
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- 38% of women are willing to pay over RMB500 for a facial serum
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- Figure 50: Money spent on different products, February 2020
- 25-39-year-old females with high income are core users of prestige brand buyers
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- Figure 51: Profile of prestige brand users vs. non-users, February 2020
Prestige Skincare Brands Used
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- Estée Lauder and Lancôme still lead
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- Figure 52: Top prestige skincare brands used in the last six months, February 2020
- Leading brands are doing more to win younger consumers
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- Figure 53: Prestige skincare brands used in the last six months, by age, February 2020
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- Figure 54: SK-II limited editions, 2020
- Figure 55: Estée Lauder Re-Nutriv
- Chanel and Dior snatch up more consumers in lower tier cities
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- Figure 56: Prestige skincare brands used in the last six months, by city tier, February 2020
Benefits Sought When Using Prestige Products vs Regular Products
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- Healthy skin is an important driver of using prestige BPC
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- Figure 57: Benefits sought when using prestige products vs regular products, February 2020
- Prestige products face competition from other beauty methods when dealing with ageing concerns
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- Figure 58: Benefits sought when using prestige products vs regular products – ‘neither’, February 2020
- Thirties and forties are turning points for using prestige products to treat fine lines and wrinkles
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- Figure 59: Benefits sought when using prestige products vs regular products – ‘prestige products’, by age, February 2020
Reasons for Using Prestige Brands
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- Innovative product features becoming more of a winning factor
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- Figure 60: Reasons for using prestige brands, 2018 VS 2020
- Professional services are perceived as having more importance
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- Figure 61: Professional services offered, China
- Younger generations are more likely to be influenced by others
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- Figure 62: Reasons for using prestige brands, by age, February 2020
- Confidence boost and social status are more important reasons for high earners
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- Figure 63: Reasons for using prestige brands, by monthly personal income, February 2020
Features Associated with Prestige Skincare Brands
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- Advanced R&D is the key to attaining prestige image…
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- Figure 64: Features associated with prestige skincare brands, February 2020
- …whereas long brand history appeals to non-users
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- Figure 65: Features associated with prestige brands, by usage, February 2020
- Spa service is a plus for high-income consumers
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- Figure 66: Features associated with prestige brands, by monthly personal income, February 2020
Attitudes towards Prestige Products
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- Rise of domestic brands
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- Figure 67: Attitudes towards prestige products, February 2020
- Provide more options to attract new users
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- Figure 68: Yuesai’s natural product range, China
- Figure 69: Attitudes towards prestige products, by usage, February 2020
- Providing prestige product lines for younger consumers
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- Figure 70: Attitudes towards prestige products, by age, February 2020
- Figure 71: myCLARINS blemishing cream, China, 2019
Meet the Mintropolitans
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- Similar brand usage among both Mintropolitans and non-Mintropolitans
- Mintropolitans are more positive towards prestige brands
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- Figure 72: Attitudes towards prestige products, by consumer classification, February 2020
- Product competitiveness is key to winning MinTs
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- Figure 73: Features associated with prestige skincare brand, by consumer classification, February 2020
- Mintropolitans are looking for more professional services
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- Figure 68: Reasons for using prestige brands, by consumer classification, February 2020
Appendix – Methodology and Abbreviations
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- Methodology
- Abbreviations
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