Skincare in Hong Kong: Overview
Hong Kong is the ideal location for businesses to enter the Chinese market and expand their operations into the Chinese mainland. However, in recent years, the growth of Skincare in Hong Kong remains weak due to economic and social issues. There are a few skincare brands that are “made in Hong Kong,” such as Choi Fung Hong’s and JaneClare, but the rest is dominated by imported brands.The end of 2015 was marked by the rejection of the electoral system reform program, which sparked protests against the Chinese dominance of local politics and in favor of more democracy. As a result, tourism and retail sales, such as beauty and personal care, declined with Chinese tourists. In 2015, there were only 59 million visitors, a 2.5% decrease from 2014. Of that, 45.8 million were Mainland Chinese, a 3% decrease from 2014. The value skincare in Hong Kong was 4% in 2015, lower than the 6% in 2014. A change in government strategy decreased beauty product prices and its taxes in Mainland China, thereby decreasing sales in Hong Kong.
International brands & Korean brands
Skincare in Hong Kong is a small sector, and it imported $474 million of cosmetics and skincare from the United States in 2014. There are few “made in Hong Kong” brands, while international luxury brands dominate the market. Top brands like Lancome, Chanel, Dior, Shu Uemura, Shiseido, Clinique, and Laneige can be found in all the major department stores and have their own boutique stores. In Hong Kong, the top 3 national brand owners’ company market shares of beauty and personal care are:
- Procter & Gambler with 10.3%
- Estée Lauder with 10%
- L’Oréal Group with 7.5%
The fourth is the Korean brand AmorePacific with 6%. The popularity of Korean culture increased with the “Korean wave. Many industries experienced tremendous growth, such as the tourism and beauty & personal care ones. The Korean beauty industry has seen phenomenal growth, and many young women now want to look like Korean idols with soft and white pure skin. South Korea has an obsession with skincare. The women spend twice as much of their income on beauty products and make-up than their American counterparts. Even South Korean men spend the most on skincare globally. Thus, Korean companies invest a lot in Research & Development and are innovating new makeup products like BB creams, cushion foundations, and natural serums. AmorePacific has built a cosmetics research lab in Korea and invests 3% of the total sales into R&D. Even western brands are following Korean cosmetic trends such as BB cream, the cushioning product, snail cream and other new trends.
Nowadays, Chinese people are increasingly better educated, and thus are more concerned about their health. While they are already aware of their food, more are paying attention skincare and cosmetics. Many are buying cosmeceutical products, which are cosmetic products that are combined with pharmaceutical products such as acne treatments, zinc lotions, etc. There are also “Organic and natural” cosmetics are made from mineral pigments and organic plants, ideal for sensitive skin. Unlike conventional make-up, which contains artificial fragrances and petrochemical ingredients such as paraben that can be carcinogenic, new trendy makeup from Korea aims to all natural. Anti-aging and whitening products are also popular, and can all be easily found in a Hong Kong shop.
Specialty cosmetics chain
All the Hong Kong fashionistas know Sasa, Bonjour, Colourmix, which are specialty cosmetics chains that are well developed in Hong Kong. These companies sell international brands with important discounts up to 30-50%. Sasa International is a cosmetics retailing group in Asia that was established in 1978. It offers over 600 beauty brands and covers a wide spectrum of products, including skincare, fragrance, make-up, body care and hair care to healthy food. In 2015, Sasa’s profit decreased 10.3% from 2014 to HK$838.8 million. Those specialty cosmetics chains are everywhere in Hong Kong and can be found at every street corner.
Recently, the beauty and personal care industry in Hong Kong is facing a difficult time after years of rapid growth, despite the fact that Chinese are paying more attention to skincare. The biggest reason is the decline of Mainland Chinese tourists in Hong Kong. South Korea beauty and personal care recorded a stronger value growth rate in 2015, through the “Korean wave” and their innovations in cosmetics. Chinese tourists now prefer to directly visit South Korea or Japan to shop cosmetics, and bypass Hong Kong. However, for those who visiting Hong Kong, specialty cosmetic stores, and department stores are still the best places to find skin care and cosmetics product with the biggest discounts.
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