Euromonitor Asia Color Cosmetic

COLOUR COSMETICS IN ASIA PACIFIC
August 2019


INTRODUCTION
REGIONAL OVERVIEW
LEADING COMPANIES AND BRANDS
FORECAST PROJECTIONS
COUNTRY SNAPSHOTS


INTRODUCTION

Scope
Disclaimer

ll values expressed in this report are in US dollar terms, using a fixed
exchange rate (2013).
013 figures are based on part-year estimates.
ll forecast data are expressed in constant terms; inflationary effects are
Beauty
and Personal
Care
- 2013 in current
discounted. Conversely,
all historical
data are
expressed
terms; inflationary effects areUS$454.4
taken intobillion
account.

Baby and ChildSpecific Products

Bath and Shower

Deodorants

Oral Care

Fragrances

Skin Care

Hair Care

Colour Cosmetics

Men's Grooming

Depilatories

Sun Care

Sets/Kits

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BEAUTY AND PERSONAL CARE: COLOUR COSMETICS IN ASIA PACIFIC

Much of the information in this
briefing is of a statistical nature and,

while every attempt has been made
to ensure accuracy and reliability,
Euromonitor International cannot be
held responsible for omissions or
errors.
Figures in tables and analyses are
calculated from unrounded data and
may not sum. Analyses found in the
briefings may not totally reflect the
companies’ opinions, reader
discretion is advised.
Colour cosmetics in Asia Pacific
grew significantly over 2013-2018,
driven by urbanisation, growing
consumer sophistication and
rising purchasing power. Facial
make-up and lip products were
the best performers in the region,
supported by fashion trends.
Store-based retailers have a
strong position in the distribution
of colour cosmetics in the region,
but internet retailing is rapidly
gaining relevance among
consumers.

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INTRODUCTION

Scope
Disclaimer
Much of the information in this
briefing is of a statistical nature and,
while every attempt has been made
to ensure accuracy and reliability,
Euromonitor International cannot be
held responsible for omissions or
errors.
Figures in tables and analyses are
calculated from unrounded data and
may not sum. Analyses found in the
briefings may not totally reflect the
companies’ opinions, reader
discretion is advised.
Colour cosmetics in Asia Pacific
grew significantly over 2013-2018,
driven by urbanisation, growing
consumer sophistication and
rising purchasing power. Facial
make-up and lip products were
the best performers in the region,
supported by fashion trends.
Store-based retailers have a
strong position in the distribution
of colour cosmetics in the region,
but internet retailing is rapidly
gaining relevance among
consumers.

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INTRODUCTION

Key findings
Asia Pacific outperforms all Asia Pacific is the largest regional market for colour cosmetics globally, with
other regions in terms of
sales reaching USD21.5 billion in 2018. Urbanisation and increased
growth in colour cosmetics purchasing power have heavily influenced category growth.
China and India are key
markets for companies
expanding in Asia Pacific

Despite strong value sales growth in China and India in recent years, these
markets still offer considerable opportunities for future retail value growth, as
they are relatively immature and far from before becoming saturated.

Younger generations
become a strategic target

Younger generations represent an opportunity for companies operating in the
region in the form of a broader consumer base and the potential to gain loyal
consumers in the long term. This will be particularly important for companies
operating in more mature markets, such as Japan and South Korea.

E-commerce and social
Internet retailing continues to gain share from store-based retailers in Asia
media will continue to drive Pacific, attracting consumers with a broader range of products, price
sales of colour cosmetics
promotions and convenience. This has been further supported by the use of
social media and local celebrities to engage and educate consumers on makeup routines and the latest products.
Localisation is key

© Euromonitor International

Leading international companies, including Estée Lauder and LVMH Moët
Hennessy Louis Vuitton, have strengthened their positions through localisation
strategies.

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INTRODUCTION
REGIONAL OVERVIEW
LEADING COMPANIES AND BRANDS
FORECAST PROJECTIONS
COUNTRY SNAPSHOTS


REGIONAL OVERVIEW

Asia Pacific leads in colour cosmetics

sia Pacific is the largest regional
market for colour cosmetics
globally, with sales of USD21.5
billion in 2018.
sia Pacific outperformed all other
regions in terms of growth in
colour cosmetics over 2013-2018,
with a 7% CAGR, driven by
urbanisation, growing consumer
sophistication and rising
purchasing power.
owever, in terms of per capita
spending, Asia Pacific is 10 times
smaller than North America and
Australasia, indicating substantial
potential for growth.
olour cosmetics usage in Asia
Pacific is still largely confined to
consumers in urban areas, with
higher disposable incomes and
who have become more fashionand beauty-conscious.

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REGIONAL OVERVIEW

Colour cosmetics will continue to growth in the next five years
olour cosmetics sales rose steadily over
2013-2018, as consumer sophistication
grew and incomes rose. In some markets,
such as China, premiumisation was a key
driver of growth, in line with rising
purchasing power and improved living
standards.
he steep growth between 2014 and 2018
was largely the result of increased
penetration of colour cosmetics in China.
A change in consumers’ attitudes to the
use of colour cosmetics attracted the
interest of industry players, with many
investing significantly in marketing,
developing products for the local market,
with digital engagement and use of local
social media platforms, such as WeChat,
Weibo and Miaopai, as well as multiple
channels of distribution. These strategies
resulted in growth rates of 30% over
2013-2018 for companies such as
Oriflame, LG Household & Health Care,
Estée Lauder and AmorePacific.

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REGIONAL OVERVIEW

Social media drives growth of facial make up among Japanese
males
acial make-up performed well in most
major Asia Pacific markets, including
Japan, China and South Korea, driven
by younger consumers, who tend to
be more self-aware and are highly
exposed to, and influenced by social
media.
n Japan, sales of facial make-up
increased significantly in 2018, driven
by the emergence of the concept of
men’s cosmetics. This was further
accentuated by greater exposure to
social media, with a significant
proportion of men believing that a
well-groomed appearance contributes
to their confidence and, in turn, to
their professional success.
ip products outperformed facial
make-up in India, supported by new
product development and successful
collaborations between companies
and celebrities.

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REGIONAL OVERVIEW

Colour cosmetics sales fall in Taiwan, following rapid growth
rowth in facial make-up and lip
products in Taiwan faltered in 2018,
after three consecutive years of
strong growth. The popularity of
South Korean TV dramas had created
a trend that resulted in consumer
regularly using facial make-up and
lipstick to match styles seen on the
shows, but in 2018 the trend faded.
n Thailand and Hong Kong, growth in
facial make-up and lip products was
driven by busy urban professionals
opting for multifunctional make-up
products and multi-use colour
cosmetics. For instance, in Thailand,
Kiss Thailand launched BB cream
offering to smooth skin, treat acne
and act as sun protection. Similarly,
in Hong Kong, Etude House launched
its Play lip and cheek mix and match

tint, which can be used as both a lip
colour and a blush.

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REGIONAL OVERVIEW

Lip products growth supported by “lipstick mania”
ip products was the fastest growing category
in most countries over 2013-2018.
Consumers in the region have developed an
appreciation of South Korean popular
culture, including music, films, television
dramas and fashion, and Korean celebrities
are increasingly influential. For example, in
China, the two-tone lip bar from Laneíge,
endorsed by popular South Korean actress
Song Hye Kyo, saw a boost to sales when
Song’s drama was aired on television in mid2016. Similarly, YSL’s Rouge Pur Couture No
52 sold out in a number of markets after
rumours that it was used by actress Jeon JiHyun in the South Korean drama “My Love
From Another Star”.
rowth was supported by product innovation
and strong marketing, particularly through
digital channels. For example, for MAC’s

store launch on Tmall, the brand created a
marketing campaign centred on its Bullet
Head line of lipsticks, supported by a
campaign on Weibo.

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REGIONAL OVERVIEW

China’s absolute growth is almost five times higher than Japan’s

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REGIONAL OVERVIEW

Apps and social media key platforms engage with younger
consumers
hina, South Korea and Japan led growth in sales of facial make-up over 2013-2018, accounting for almost 80%
of absolute value growth. China contributed more than half of this absolute value growth, supported by the
country’s rising purchasing power and improved living standards among local consumers, resulting in

stronger demand for premium brands. In South Korea and Japan, growth has been supported by an increase in
the consumer base, with companies in both countries targeting younger generations. With Japan’s population
ageing rapidly, and older consumers preferring low maintenance beauty regimes, several companies are
looking for growth by targeting younger consumers.
ompanies are seeking to engage with a consumer base that is highly influenced by social media. For example,
in Japan, reviews from other consumers are highly influential when purchasing cosmetics, with apps
specifically developed for the industry growing in popularity. Apps such as LIPS, with over 3 million downloads
and the majority of users being teenagers, offers users the ability to post and search for reviews of cosmetics.
The app also leverages AI to provide further personalisation based on preferred reviewer, brand or skin type.
acial make-up and lip products were the categories that grew most over 2013-2018, accounting for 85% of
absolute sales growth. Lip products growth was largely driven by “lipstick mania” in countries such as Taiwan,
Indonesia and China, owing to the product’s popularisation in South Korean dramas. In 2018, lip products
growth was also supported by innovation, with products such as the lipstick card launched in Japan, which can
be used like a stamp, and lipstick infused with ingredients such as aloe vera and honey launched in India.
n China, the rapid growth of facial make-up has attracted the interest of companies that have traditionally
competed in skin care, and which are now extending their ranges to add facial make-up, further supporting
growth in this category. For example, Chinese company Proya Cosmetics Co Ltd launched its Insbaha series,
which includes eye shadow, mascara, BB cushion, foundation and blusher. Similarly, Jala (Group) Co Ltd
launched the Chando cosmetics line.

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REGIONAL OVERVIEW

Department stores the biggest losers to e-commerce

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REGIONAL OVERVIEW

Store-based retailing under pressure from the internet channel

A

lthough channels vary across countries in Asia Pacific, store-based retailing remains the main distribution
channel for colour cosmetics. In China, department stores is the most important channel of distribution, but it
lost share to internet retailing and beauty specialist retailers over 2013-2018. Chinese consumers have been
attracted to the competitive prices offered by internet retailers, as well as their convenience and promotions.
Internet retailers are also gaining share thanks to the robust growth of cross-border e-commerce, as more
consumers turn to overseas brands. On the other hand, beauty specialist retailers have attracted consumers
due to their unique market positioning of serving particular needs and offering in-store services, with brands
such as Sephora and Innisfree continuing to increase their presence.

I

n Japan, drugstores continues to be the main distribution channel, supported by product variety, with unique
new products often launched in this channel, along with discounts being available. Number of outlets and
locations are also a strength for drugstores, as they are located near almost every train station in Japan, which
often makes them go-to shopping areas for inbound tourists visiting Japan. Nevertheless, internet retailing is
gaining traction, particularly for repeat purchases.

I

n India, the entry of online beauty specialist retailers, such as Nykaa.com and Purpple.com, and general online
retailers, such as Amazon, has changed the way consumers purchase colour cosmetics, as these retailers are
able to offer a broader range of products, as well as discounts and convenience. This has been particularly
evident in tier-II and tier-III cities, where consumers were previously restricted to grocery retailers, primarily for
mass brands, and did not have access to department stores, as the presence of department stores was mainly
restricted to major cities.

I

n South Korea, beauty specialist retailers continue to lead in colour cosmetics, particularly “roadshop” brands –
mass brands that are mainly sold through their own beauty specialist retailers. However, these have been losing
share to direct selling, a channel that has been growing thanks to local brand Atomy and to AmorePacific and
LG Household & Health Care, as these also operate through direct selling for their premium brands.

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INTRODUCTION
REGIONAL OVERVIEW
LEADING COMPANIES AND BRANDS
FORECAST PROJECTIONS
COUNTRY SNAPSHOTS

LEADING COMPANIES AND BRANDS

Five largest companies typically command at least 40% of sales
espite the entry of new brands in
Asia Pacific, the colour cosmetics
market remains highly
concentrated, exhibiting minimal
changes in most countries.
he top five companies command at
least 40% of category value in the
majority of markets in the region,
with the exceptions being India,
Pakistan and Sri Lanka.
nilever remains the leading
company in India, due to strong
brand recognition and competitively
priced colour cosmetics offerings
under its Lakmé brand.
n South Korea, leading companies
are losing share to private label
brands and products from
manufacturers such as Clio
Cosmetics Co Ltd and Aekyung
Industrial Co Ltd.

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LEADING COMPANIES AND BRANDS

Industry leaders see mixed performances over the review period
'Oréal maintained its position as
market leader in 2018, with 15% of
value sales. Yves Saint Laurent,
Lancôme and Giorgio Armani saw
rapid growth, posting double-digit
CAGRs between 2013 and 2018,
evidencing the premiumisation
trend, aided by rising purchasing
power in the region.
stée Lauder performed strongly in
2018, overtaking AmorePacific
Corp to claim fourth position. The
company has strengthened its
position in the region by investing
in key markets like China, with
initiatives including the launch of a
limited edition lipstick for
Christmas and special products
for Singles Day. Brands such as
MAC and Tom Ford were
particularly successful through
online channels including Tmall in
China and Lazada in Vietnam.

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LEADING COMPANIES AND BRANDS

China becomes a key territory in colour cosmetics
apanese companies like Shiseido,
Kao and Kosé Corp rely strongly on
their home country, deriving more
than 78% of their sales from Japan.
Similarly, the South Korean
companies AmorePacific and LG
Household & Health Care Ltd have a
strong reliance on their home market.
hile there are risks in focusing heavily
on a single region, most global
companies, including L'Oréal, Estée
Lauder and LVMH Moët, have been
successful in growing their
businesses in Asia Pacific,
particularly in China. They have been
investing in marketing and selling
through Chinese social media
channels and key online retailers like
Tmall, as well as implementing more
localised strategies, with initiatives

such as LVMH launching an official
flagship store on Tmall for Givenchy
and YSL Beauté.

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LEADING COMPANIES AND BRANDS

Industry leaders maintain their rank through a localised strategy
he top two brands, Shiseido and
Maybelline, maintained their
leadership over the review period,
supported by innovation and
successful localised marketing. For
example, Maybelline launched a
“mini” line of products in India, with
smaller versions of products such as
Maybelline Fit Me foundation and Mini
Palette Eye Shadow, whilst in China it
launched a Red on Fire lipstick series
for Chinese New Year.
ves Saint Laurent made a significant
jump over 2013-2018, reaching
seventh position from 65th. The brand
benefited from its strong performance

in China, where growth was driven by
its success on Tmall. In April 2018, the
brand was the most sold beauty brand
on the Luxury Pavilion (a separate
section of the platform’s site available
to top spenders) on its first day of
operation.

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INTRODUCTION
REGIONAL OVERVIEW
LEADING COMPANIES AND BRANDS
FORECAST PROJECTIONS
COUNTRY SNAPSHOTS


FORECAST PROJECTIONS

China will overtake Japan as the largest colour cosmetics market

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FORECAST PROJECTIONS

China and India offer the largest unmet potential
sia Pacific accounted for one third of global industry value in 2018, and is anticipated to generate over half
of the total USD12.3 billion in absolute growth over 2018-2023. Due to the size of the markets, countries
like China, South Korea, Japan and India will remain attractive for companies looking to enter the Asia
Pacific region. However, in terms of potential growth over the forecast period, South Korea and Japan are
anticipated to slow down, due to the maturity of the markets, with South Korea expected to see only
marginal growth, whilst Japan is anticipated to grow by a 2% CAGR. Growth in these markets will depend
largely on the strategies used by companies to innovate, and also to increase their consumer base and
consumer spending. For example, in Japan, men’s cosmetics is still untapped and holds potential for
growth in the future, whilst in South Korea, innovation in the form of new products that can replace the
“cushion foundation” will be key to support growth between 2018 and 2023. The arrival of Sephora in
South Korea later in 2019 could inject some much needed variety into the landscape, and perhaps help
bring penetration of colour cosmetics in the country closer to the global average.
hina is expected to see the largest absolute value growth over 2018-2023, despite increasing concerns
about a domestic demand slowdown and the impact of the US-China trade dispute. The market is forecast
to grow at an 11% CAGR, adding USD4.2 billion in value. China’s growth in absolute value terms is
predicted to be larger than that of North America and Latin America combined. Growth in this market will
continue to be supported by Chinese millennials and the rise of the middle class, alongside Chinese
consumers’ increasing demand for premium products.
n India, with consumers becoming more exposed to the latest beauty trends and make-up routines, the
transition from occasional specific usage to daily use will be a key driver of sales of colour cosmetics
over the forecast period. Colour cosmetics is anticipated to register a 9% CAGR between 2018 and 2023.

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FORECAST PROJECTIONS

Competition will negatively impact growth in China

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FORECAST PROJECTIONS

Targeting younger generations is a key strategy
sia Pacific is anticipated to continue to grow over 2018-2023, as populations grow and disposable incomes
continue to increase in the region. China and India offer the largest unmet potential for colour cosmetics,
meaning they still have considerable room for retail value growth before becoming saturated. China’s unmet
potential of USD23.4 billion equates to how much more sales could grow if all demand drivers were positive,
whilst the unmet potential for India is USD12.9 billion. China and India will thus continue to remain the focus
of leading companies as a way to expand in Asia Pacific and move away from mature markets in the West.
argeting younger consumers will be a key strategy for companies operating in the region, particularly in
mature markets such as Japan and South Korea, as this represents an opportunity to expand the customer
base. Tactics such as introducing diffusion lines, the use of influencers across social media and innovative
features to target younger consumers will become critical to attract a younger audience, who could well
become long-term users. This approach will be particularly important in Japan, where the population is

ageing rapidly, as companies have been largely targeting older consumers and to some extent neglecting
younger generations. IF brand marketing strategies focus on the older generations, the perception of the
brand among younger consumers tends to become unappealing. Companies like Shiseido are now looking
to refresh their value proposition to younger generations.
sia Pacific is the largest and fastest growing region in the world for internet retailing, thus investing in
distribution strategies that better fit demand in the region will be critical for foreign companies. Initiatives
such as the launch of an official flagship digital store on Tmall.com by Givenchy, Chanel and Yves Saint
Laurent are likely to become common among companies competing in the Chinese market. Similarly, the
offer of services such as AI make-up apps that allow users to try different products via their smartphone is
likely to continue.

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