Cosmetics makers shine with beauty hunters on the rise

A visitor takes photos of a new Carslan lipstick at a promotional event in Beijing. [Photo/China Daily]

Domestic companies like Carslan, Chicmax bet on brand building, R&D for growth

Domestic cosmetics retailers continued to see booming business growth, fueled by a growing search for beauty and youthfulness among Chinese female consumers, especially those in the middle-income group, in the country’s fast-growing cities. , as well as an increase in the national brand. acknowledgement.

Chinese cosmetics company Carslan said it would develop more high-end products and raise prices as it aims to compete with big international brands that traditionally dominate the luxury market.

In the first half of this year, Carslan recorded double-digit growth in online sales revenue, which came mainly from marketing on the Douyin short video platform. For physical stores, sales remained stable. The company said it expects similar sales growth rates in the second half.

“Our consumers are mainly from second- and third-tier cities, but the proportion of consumers in first-tier cities has increased rapidly. Next, we plan to mainly target consumers in first- and second-tier cities,” said Tang Xilong. , president of Carlslan.

“We will continue to grow our online sales and strengthen digital marketing by leveraging the impact of celebrities and key opinion leaders, and satisfying the ever-changing shopping habits of young consumers,” a- he declared.

From 2015 to 2020, cosmetics sales in China increased from 480.1 billion yuan ($68.6 billion) to 845.3 billion yuan, with a compound annual growth rate of 12%, while that of the global market over the same period was 1.5%, the consultancy said. Frost and Sullivan.

“Domestic cosmetics retailers should further increase their research and development capabilities and brand impact, and seize the business opportunities presented by the regional comprehensive economic partnership agreement to source raw materials from Japan and South Korea. at a lower cost,” said Fu Bo, an official with the Ministry of Commerce. Beauty standards shared among East Asian countries also allow domestic cosmetic brands to take advantage of export opportunities.

Founded in 2001 in Guangzhou, Carslan, whose main products are lipstick, foundation and eye makeup, said it cooperates with top designers in China and abroad to strengthen the impact of its brand. Recently, the company launched a premium lipstick as a new addition to its most classic product line during the series’ 20th anniversary celebration.

Carslan said it will continuously increase its R&D investment and highlight its innovation advantages. In addition to its R&D centers in Guangzhou and Milan, the cosmetics distributor is building a new R&D center in Tokyo’s Ginza district.

Last year, Carslan acquired an Italian cosmetics brand to enrich its portfolio, and will continue to acquire and incubate new brands to diversify its holdings.

Tang believes the success of her business and others like her has something to do with identity shifts among young city dwellers. “Domestic cosmetic brands match the skin characteristics of Chinese consumers. A large number of young people have established a sense of national identity and cultural awareness from the bottom of their hearts, and this has prompted them to choose more national products,” Tang said. .

To meet growing consumer demand, Carslan is building a new factory in Guangzhou. The facility, which is expected to be put into operation this year, will help build a self-sustaining makeup industry chain in the country.

Meanwhile, Shanghai Chicmax Cosmetic Co Ltd, a Shanghai-based makeup retailer that owns brands such as Kans and Baby Elephant, has submitted its prospectus to the Hong Kong stock exchange in preparation for an upcoming IPO. In the first nine months of 2021, the company posted net sales of 2.6 billion yuan, up 13% year on year, according to the prospectus.

Funds raised from the IPO will be used for brand building, improving R&D and production capacity, increasing sales networks, improving digital infrastructure and mergers and acquisitions, says the prospectus.

Since 2016, Chicmax has spent nearly 100 million yuan annually on R&D and set up two R&D centers in Shanghai and Kobe, Japan. Chinese consumers have become increasingly sophisticated when it comes to makeup and skincare, and it has become a consensus for retailers to focus on improving product quality and innovation, said the society.

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