Today, China stands as the world’s second-largest consumer beauty market in the world. With beauty sales approaching $60 billion, China is also considered the world’s largest dollar contributor in the category. Despite the disruptions caused by the COVID-19 pandemic, China has begun to rebound and resume normal operations, providing a real-time playbook for recovery as it continues its transformation into a consumption economy. By 2021, China is expected to surpass the US as the number-one retail market in the world, with sales estimated to hit $5.8 trillion.
The opportunity in China for beauty and personal brands is significant. The market has fueled growth for beauty giants like L’Oréal, Estée Lauder, and Coty, but there is also tremendous potential for up-and-coming indie beauty brands. This is especially true given the burgeoning demand being driven by Gen Z consumers born after 1995. These shoppers are always on top of the latest global trends and are looking for emerging brands and products that express their individuality.
China is the world’s largest e-commerce market, and online retail transactions totaled approximately $2 trillion last year, according to the International Trade Association. The level of online penetration in China is much higher than the rest of the world, with online transactions estimated to reach 44% of sales in 2020. In the US, online transactions only stand at 10.7%.
Multinational beauty brands have been reaping the benefits of the growth coming out of the dynamic, nuanced, and wildly sophisticated Chinese market for years. While no one disputes the opportunity in China, cultural differences coupled with regulatory requirements around animal testing have kept many small to medium-sized brands sitting on the sidelines. Cross-border e-commerce has changed the game by removing these barriers to entrance into the Chinese market.
Cross-border e-commerce has gained traction as a strategy for beauty companies to get their products in front of receptive Chinese consumers with significantly less investment required than with traditional trade. Cross-border sales are on track to hit $184 million in 2021, and demand for imported growth is a key market driver in China.
Fenty Beauty, Huda Beauty, Farmacy, and Drunk Elephant have all used Alibaba’s dedicated cross-border channel Tmall Global as a springboard to enter the China market over the past year. Tmall Global is China’s largest cross-border e-commerce platform. Combined with its recent acquisition of Kaola, it commands a 52% share of the market according to Azyoa. The time is ripe for indie beauty brands, and Tmall Global is the key to unlocking the immense opportunities for growth in China and engaging with more than 700 million Chinese consumers across Alibaba’s platforms.
Tmall Global on BeautyMatter Live: June 18 at 2 pm EST
Mark your calendar for an informative and interactive discussion with Tmall Global’s Demi Shi-Guth and BeautyMatter founder Kelly Kovack. By the end of our discussion, we hope you’ll be one step closer to launching your brand in China.
