Industry News: Breaking Through the Red Ocean: How Personal Care Brands Can Achieve Market Growth

Industry News: Breaking Through the Red Ocean: How Personal Care Brands Can Achieve Market Growth

With consumer demand for beauty and personal care products gradually recovering, China's cosmetics retail market is steadily rebounding. Consumer intentions and demands are quietly changing as well. Awareness of personal care is increasing among consumers, leading to upgraded consumption demands and driving market growth. As various brands choose to focus on different tracks, a new landscape is emerging in the omnichannel setup.

Online Data Insights in the Personal Care Market

Overview of the Personal Care Industry

Large Market Scale on Taobao Platforms

The monthly sales of the personal care industry on Taobao platforms exceed 3 billion yuan, with the market scale maintaining a high level. Every November, due to the "Double Eleven" shopping festival, consumers tend to stock up on personal care products, leading to peak sales. The three major categories are oral care, body care, and hair care.

Growth Phase on Douyin Platform

The sales of personal care products on the Douyin platform are experiencing a high-speed growth trend, indicating a positive outlook for the overall personal care market.

Brand Differentiation Period in Personal Care

New domestic brands are rising. Since 2000, the personal care industry has undergone four development stages. As consumer decision-making becomes more scientific and rational, diversified and refined demands drive continuous product innovation, intensifying brand differentiation. In this context, new domestic brands with sharper consumer insights, better understanding of new media marketing, and deeper omnichannel layouts are poised to stand out.

Distinct Characteristics of Target Groups in Personal Care Industry

Refined women, young professionals, and avant-garde students have high purchasing power in the personal care market, characterized by frequent purchases, high spending per transaction, and buying multiple items. Refined women and young professionals prefer international high-end brands, while avant-garde students and cost-effective youth favor new and trendy brands.

High-Purchasing-Power Groups Focus on Detailed Care Steps and Advanced Categories

Refined women and young professionals advance their consumption categories, using advanced oral irrigators and whitening agents for oral health management. They also have more refined hair and body care routines, favoring advanced products such as scalp pre-wash and bath oils. Cost-effective youth focus on menstrual hygiene and care, while avant-garde students emphasize comprehensive grooming from head to toe.

Industry Trend Outlook

1.Functional and Scene-Specific Personal Care Products

2.Consumers Willing to Pay for Fragrance; Fragrance Becomes a Key Consideration

3.Emerging Personal Care Brands Focusing on Fragrance, Actively Entering the Scent Economy

4.Online Content as a Crucial Channel for Consumer Engagement; The Industry Needs More Differentiated Streaming Content to Attract Potential Consumers

5.Consumers Prefer More Professional Personal Care Content to Help Reduce "Trial and Error Costs"

Global Beauty and Personal Care Development Trends: 5 Key Elements

As consumer recovery is on the horizon, what hidden trends lie within the global beauty and personal care industry? How should domestic brands leverage these trends?

When discussing global beauty and personal care innovation trends, it is essential to reflect on the "new consumer wave" from three to four years ago. During that time, many new brands emerged in both domestic and international beauty and personal care fields, each targeting different market segments and aiming to capture the young consumer demographic. However, a surge in demand does not necessarily equate to product sales, and coupled with the darkest moments of the three-year pandemic, we noticed that the top search rankings on major platforms saw fleeting guests who were quickly forgotten by consumers.

Fortunately, the market is beginning to warm up, and a new wave of consumer enthusiasm may be on the horizon for the global beauty and personal care market. In facing this proposition, the entire industry is speculating about what new trends and subcategories will emerge in the future.

Trend directions are always linked to data, and we have identified five key elements for those brands and market segments that have already entered the public eye.

Concept Trends

Keywords: Smart, Customized, Healing

The ever-changing beauty and daily chemical market always bring surprises and endless imagination. New demands continually emerge, leading to more and more new concepts in beauty and daily chemicals. These concepts collide and ultimately create a vibrant new consumer world.

1.Metaverse Beauty

The concept of the metaverse originated from Neal Stephenson's novel "Snow Crash," where the metaverse is depicted as a 3D space in virtual reality.

Currently, the "metaverse beauty" concept lacks a unified definition, but it generally refers to the application of virtual reality, augmented reality, artificial intelligence, and other technologies in the beauty industry. This allows consumers to try different makeup styles in a virtual world, browse various brands of cosmetics, and receive advice from professional makeup artists, providing a whole new beauty experience.

Many brands are transforming online interactions and in-store shopping experiences, offering AR virtual makeup software that enables customers to select the most suitable lipstick, foundation, blush, and eyeshadow shades through AI and AR-driven solutions.

For example, Sephora's mobile app uses an AR tool called Sephora Virtual Artist, which uses facial recognition to allow customers to try thousands of different types of makeup at home with their phones. Although AR virtual makeup is not new, it has become a trend in the beauty world as more brands and companies explore this space, though it still needs time to reach a breakthrough.

In recent years, many international and niche brands have launched metaverse products. Current mainstream trends in "metaverse beauty" include VR/AR technology (such as virtual makeup), NFT currency, gamification interactions, virtual brand ambassadors, and futuristic colors.

2.Customized Cosmetics

Customized cosmetics are not a new concept. In recent years, many makeup, hair care, and skincare products that emphasize customization have emerged, and this trend shows no signs of slowing down.

As the name suggests, customized cosmetics refer to brands using specific formulas and technologies to tailor products based on different skin types and needs, even considering usage scenarios.

Currently, customized cosmetics mainly follow two models. The first is private customization services, where brands design exclusive products for different skin types. The second model caters to a broader audience by combining the effects of different types of products.

In the domestic market, the customization trend has not yet fully formed, but a few brands have entered this field through differentiated positioning, focusing mainly on hair care products with various efficacy combinations. For example, products are recommended based on individual needs through data recommendation algorithms or custom formulations to meet the demands of different skin types and issues.

Compared to the domestic market, the customization concept is more mature abroad, with a wide range of application scenarios. Examples include skin tests based on hormones, gene testing for custom products, AI and AR algorithms for personalized makeup and fragrances, and at-home custom skincare from finished products.

It is worth noting that consumers have higher expectations and demands for customized cosmetics, requiring brands to have stronger research and development capabilities.

3.Ayurvedic Skincare

Ayurveda is an ancient Indian medical system that has been around for over 5000 years. The term Ayurveda combines the Sanskrit words "ayur" (life) and "veda" (science or knowledge). It is a medical system that also represents a healthy lifestyle, emphasizing the connection between the mind, body, and environment.

We have observed innovative cases mainly using adaptogenic plants and herbs such as Ashwagandha, saffron, and turmeric to help people relieve stress and relax. The categories are concentrated in hair care and facial care, with products launched in various scenarios to provide a healing experience.

For instance, Codex Beauty Labs, a plant-based biotechnology skincare company, launched the Shaant series, utilizing biotechnology active ingredients from Ayurvedic plants for balanced skin microbiome care.

Australian oral care brand KEEKO, inspired by the Ayurvedic practice of oil pulling, introduced a mouthwash oil claimed to clean and detoxify teeth and gums while promoting digestive system activities from teeth to stomach. Users need to swish the oil in their mouths for 5-15 minutes, spit it out, and rinse with water.

It is noteworthy that the domestic brand Canban has also launched mouthwash oil, although it does not emphasize Ayurveda as a selling point.

Packaging Trends

Keywords: Multi-tube, Multi-compartment, High-efficiency Freshness

The era of efficacy skincare has set higher standards for packaging materials, leading to the emergence of dual-tube and triple-tube essences, which are becoming more common than in previous years.

Innovative multi-compartment and multi-tube packaging designs continue to emerge, primarily in facial essences and masks, gradually extending to oral care and hair care products.

Currently, dual-tube and triple-tube packaging dominate, with triple-tube products being relatively rare, mainly promoted by international brands like Laneige and Lancôme. Some domestic brands, such as Proya and Inoherb, are also experimenting in this area.

1.Compartmentalized Packaging for Added Value

Common compartmentalized packaging includes water-oil separation, mask-liquid separation, and freeze-dried compartment designs. For example, the "oil mask" concept features dual-compartment packaging for facial care with essence oil and mask in a two-step process.

Additionally, there are new products with three-body partition designs, such as Spring letter's three-body retinol essence using water-oil-powder three-body patent design for ingredient stability and immediate activation upon mixing.

In 2021, Winona launched a three-body mask combination with three different functional masks for T-zone, U-zone, and full-face care.

2.Multi-tube Essence for Simplified Efficiency

Multi-tube independent design packaging for facial essences offers multi-effect solutions in one bottle, reducing the need for multiple products and streamlining skincare routines.

For example, Laneige's golden three-tube essence claims to provide anti-aging benefits with a 1+1+1>3 skincare experience.

The packaging features a three-tube design to preserve different textures of essences, with a rotating upward design to protect ingredients from light and oxygen, ensuring overall stability and freshness.

3.Multi-compartment Packaging Penetrating Multiple Categories

Multi-tube and multi-compartment designs are extending beyond facial care to hair care and oral care products. For instance, WO launched a dual-tube whitening toothpaste with an innovative "concentric circle" design, featuring two outlets for whitening and maintenance effects in a single tube.

Raw Material Formula Trends

Keywords: Eco-friendly, Sustainable

In recent years, the eco-friendly trend has spread globally, remaining strong and impacting the field of raw material formulas. This has led to a significant release of demand for upgraded and biomimetic cosmetics. It is foreseeable that eco-friendly and sustainable raw materials have become the main theme of the global beauty and personal care market.

1. Upgraded Raw Materials

Upgraded raw materials involve reusing and recycling waste and non-renewable resources to produce more eco-friendly and sustainable materials.

As environmental and sustainability concerns become global hot topics, the application of upgraded raw materials is increasingly widespread, reducing the consumption of original materials and minimizing waste streams, air pollution, water pollution, and greenhouse gas emissions.

Many brands have ventured into the "upgraded" field, commonly using mainstream ingredients such as coffee grounds, agricultural fruit and vegetable waste, and flower by-products. For example, My Skin Feels launched a cleanser with upgraded food waste ingredients, including orange juice waste.

TATCHA launched a silk essence, using upgraded and recycled cranberry and sea fennel to replace retinol.

From the raw material perspective, this year, global fragrance giant Firmenich introduced Muguissimo, a synthetic material derived from upgraded raw materials, while French Caribbean beauty brand Kadalys collaborates with banana growers in Martinique to convert fruit waste into potent patented bioactive ingredients for beauty products.

In the domestic market, "upgraded" products are relatively scarce, and the concept remains unfamiliar to some consumers, indicating a need for further education.

2.Biomimetic Cosmetics

Biomimetic raw materials mimic natural biochemical reactions and structural characteristics of organisms to create more bio-compatible and effective products.

By researching and developing biomimetic cosmetics, we can improve product quality and efficacy while reducing environmental impact and human irritation, aligning with the pursuit of green, eco-friendly, and healthy solutions.

Biomimetic cosmetics commonly use ingredients like natural plant extracts, proteins, peptides, and sugars, enhancing skin penetration and absorption for better beauty results.

Currently, many brands incorporate biomimetic technology, biomimetic formula systems, biomimetic raw materials, or biomimetic lipid concepts into their barrier repair products. For instance, Skynyrd launched a water-oil skin activator inspired by the biomimetic film-forming principle, providing a water-oil balance with a clear texture for improved skin absorption.

Guyu has launched the Snow Velvet Truffle Soothing Cream, which uses plant biomimetic barrier technology. The cream contains avocado tree fruit butter, high-concentration ceramides, and a plant sterol-based skin-mimicking formula, combined with alpine edelweiss and white diamond truffle. It is effective in repairing the skin's stratum corneum and strengthening the skin barrier.

The brand SkinSight, specializing in products for sensitive skin, has introduced the Radiant Skin Light Essence Oil. Utilizing specialized cell membrane biomimetic technology, it offers a non-greasy yet highly absorbent texture.

Population Trends

Keywords: Segmentation, Specific

Strictly speaking, segmenting specific populations is not exclusive to the global beauty and personal care market trends in 2023. However, driven by various "perfect timing" factors over the past year or two, the following groups have become the focus of this year's global beauty and personal care market. Those who accurately cater to the needs of these groups may open new consumer markets.

1.Women During Menstruation

Women's special physiological periods, influenced by hormonal fluctuations, affect not only their overall mood and energy levels but also their hair and skin conditions. Hormonal imbalances (such as progesterone, estrogen, and testosterone) can cause skin issues like acne and dryness. As people gradually shed the "shame" associated with menstruation and become more concerned about menstrual health, skincare before menstruation has become increasingly important for modern women.

This large group, struggling with hormone-induced skin issues, has not received widespread attention until now. Most healthy women have regular menstrual cycles, but the needs and challenges of menopausal women, who face changes in their menstrual cycles, also require attention.

In recent years, many overseas brands have focused on these hormonal changes, offering skincare products specifically designed for menstrual periods. This market gap is gradually being filled.

For example, the Korean natural skincare brand Knours provides a range of skincare solutions for skin problems caused by hormones during menstruation, pregnanc