Attitudes towards Prestige BPC Products - China - April 2021

OVERVIEW
Key issues covered in this Report
Definitions
EXECUTIVE SUMMARY
Market and competition
The consumer 
Prestige skincare products show stable performance after the pandemic 
Figure 1: Money spent on different facial skincare products, January 2021
Domestic shopping websites become a leading channel
Figure 2: Purchase channel used for buying prestige skincare products, January 2021
Better efficacy remains the most important reason for using 
Figure 3: Reasons for using prestige brands, 2020 vs 2021
International prestige brands are seen as professional skincare solutions
Figure 4: Image associated with prestige skincare brands, January 2021
Marketing strategy focus on skin solutions is more important 
Figure 5: Brand activities that increase favourability, January 2021
Ethical related claims are on the rise
Figure 6: Interested sustainable activities for a prestige skincare brand, January 2021
What we think
ISSUES AND INSIGHTS
Launching prestige products customized to serve Chinese skin type
Figure 7: NUMBER skincare set
Legacy means more than just history
Figure 8: Vive brand story
Focus on creating value to justify premium prices
Figure 9: L'Oréal celebrating 50 years of its slogan on International Women’s Day, 2020
MARKET AND COMPETITION – KEY TAKEAWAYS
Opportunities for local brands entering prestige market
Long-established brands continue to upgrade iconic products
MARKET FACTORS
Competition from domestic brands
Prestige brands acquiring niche brand
Relaxed policy on animal testing means more ethical brands enter China market 
Live streaming continues to heat up
COMPETITIVE STRATEGIES
Brands continue updating classic iconic products
Figure 10: Prestige brands with upgraded iconic products, China 2020
Gamifying an icon
Figure 11: Serum Quest by Estée Lauder, US 2020
Launch pop-up stores to support duty-free shops 
Figure 12: Pop-up stores in Hainan, China 2020
Domestic brands build up prestige brand image by promoting technology 
Figure 13: Quadha brand story
Methods of product application to enhance efficacy and professional image
Figure 14: Brands’ posters on products application
LAUNCH ACTIVITY AND INNOVATION
More prestige skincare products launched compared to previous years
Figure 15: Price positioning of new product launches in facial skincare category, China, 2018-20
Prestige products focused on anti-aging related claims
Figure 16: Top 10 claims in prestige facial skincare products launches, China, 2020
Rose petal concentrate ingredients became a popular ingredient
Figure 17: Newly launched prestige skincare products with rose ingredients, China, 2020
Prestige make up brands entering skincare 
Figure 18: Jones Road eye/facial cream, US, 2021
Figure 19: Charlotte Tilbury magic cream, UK, 2020
Extend product range from iconic products
Figure 20: Product set from Fresh Guyuan and Helena Rubinstein green bottle, China
THE CONSUMER – KEY TAKEAWAYS
Spending per each skincare category unchanged
Domestic comprehensive shopping websites becomes a key channel
To get better results is still the top reason for using 
International brands boast a professional image 
Chinese consumers are looking for products designed for their skin
Sustainable activities are the new trend
PRICE SPENT ON DIFFERENT SKINCARE PRODUCTS 
Spending habit on prestige skincare products unchanged by COVID-19
Figure 21: Money spent on different facial skincare products, January 2021
Figure 22: Average spending on different facial skincare products, 2020 vs 2021
PURCHASE CHANNEL
Online channels become a key shopping destination 
Figure 23: Purchase channel used for buying prestige skincare products, January 2021
Younger consumers prefer to buy from social media sites 
Figure 24: Purchase channel used for buying prestige skincare products, by age, January 2021
Figure 25: Gen Z unboxing Chanel cotton
Figure 26: Types of purchase channel used for buying prestige skincare products, by age, January 2021
Offline counters attract affluent consumers and lower tier residents
Figure 27: Purchase channel used for buying prestige skincare products – ‘counters in department stores’, by selected demographics, January 2021
REASONS FOR USING PRESTIGE BRANDS
Efficacy remains the key driver for usage
Figure 28: Reasons for using prestige brands, 2020 vs 2021
Emotional benefits increase with age
Figure 29: Selected reasons for using prestige brands, by age, January 2021
Figure 30: L'Oréal campaign on International Women’s Day, China, 2020
Younger consumers show stronger conformity than older generations
Figure 31: Selected reasons for using prestige brands, by age, January 2021
BRAND PERCEPTION 
International brands do well in building up a professional image
Figure 32: Image associated with prestige skincare brands, January 2021
Figure 33: Shiseido’s refillable bottle, Japan, 2020
Younger consumers regard Chanel and Dior as fashionable
Figure 34: Image associated with prestige skincare brands – Chanel and Dior, by age, January 2021
Whereas SK-II’s marketing successfully recruits younger consumers
Figure 35: Image associated with prestige skincare brands – SK-II, by age, January 2021
MARKETING STRATEGY FOCUS ON CHINA
Suitable for Chinese skin condition is the key 
Figure 36: Brand activities that increase favourability, January 2021
Consumers with higher income pay more attention to innovations 
Figure 37: Selected brand activities that increase favourability, by income, January 2021
INTERESTED SUSTAINABLE ACTIVITIES
Sustainability is worth attention now 
Figure 38: Interested sustainable activities for a prestige skincare brand, January 2021
Figure 39: Lancôme offering reusable filler
Young consumers have stronger feelings towards cruelty free 
Figure 40: Selected interested sustainable activities for a prestige skincare brand, by age, January 2021
Organic ingredients drive affluent consumers’ affinity
Figure 41: Sustainable activities interested in a prestige skincare brand, by monthly personal income, January 2021
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology 
Abbreviations