Data released by the JD Big Data Research Institute on Feb. 9 indicates, sales of prepared versions of Chinese New Year dinner must-haves are significantly higher than before. Sales of a one-person serving of the traditional delicacy Buddha Jumps over the Wall have increased four times. Some consumers have gone all out – sales of set meals of auspicious CNY dishes are up 3.5 times.
Jacco
China’s top 30 mobile game publishers see revenue jump in January
The top 30 Chinese mobile game publishers reported a surge in revenue last month thanks to their overseas market expansion. These game developers raked in over $2.3 billion in worldwide revenues in January, a surge of 47.3 percent year on year, according to Sensor Tower, a mobile app data analysis firm.
Multinationals tap into China’s booming esports market
A growing number of multinational companies are foraying into China’s esports sector, vying for a piece of the booming market topping the world with more than 20 billion US dollars in revenue and hundreds of millions of avid players. Global furniture retail giant IKEA on Friday crossed into the gaming world by debuting its home furnishings collection designed for esports gamers, including tables, chairs, storage boxes, and other accessories, in Shanghai.
China’s Burned Out Millenials Go Back To Nature
Over recent years, young Chinese have become increasingly disillusioned with the gruelling work schedules and cutthroat competition that come with living in the country’s major cities, leading many to embrace a range of alternative lifestyles — from extreme saving, to hermit culture and alternative food networks.
3 Key Opportunities in China’s Haircare Market
China’s haircare market is significant, and there’s plenty of headroom to grow. Mintel, a market research firm, estimates China’s haircare market will grow to RMB 53.6 billion (USD 7.6 billion) by 2021.
The market’s increasing growth is driven by premiumization and specific haircare issues affecting the Chinese population.
In terms of premiumization, sales of premium hair care products are increasing in all geographies. China’s wealthier coastal provinces – Shanghai, Zhejiang and Guangdong – lead the way. Premiumization is taking consumers from shampoos and conditioners priced between RMB 50 and 100 to products well over 100 RMB. This trend works in imported brands’ favor.
Alongside premiumization, China’s consumers are struggling with premature baldness. The China Association of Health Promotion and Education reveals that China’s premature hair loss population stands at a whopping 250 million, most of them between 20 and 40 years old. The desire to stave off premature baldness drives additional consumption and increased sophistication when looking at hair care formulations.
Image source: VCG Photo
With that context in mind, let’s have a look at the three key opportunities in China’s haircare market for imported brands.
1. Anti-Breakage Shampoo in China’s Haircare Market
One of the first courses of action for young consumers suffering with early onset hair loss is strengthening or anti-breakage shampoo. There are over 50,000 product reviews of anti-breakage shampoos on Little Red Book. From these reviews, we can see consumers are looking for formulations result in less shedding after showering and during sleep. However, brands should be aware that most consumers are anxious for solutions to work quickly – they’re looking for some small signs of progress after a few washes!
From our analysis of product reviews, and previous projects in the category, imported anti-breakage shampoos that hit the mark with consumers include:
- Furterer
- Alpecin
- Shisheido
- Living Proof
- Amino Mason
2. Volumizing Shampoo in China’s Haircare Market
Outside anti-breakage shampoo, consumers are also looking at volumizing shampoos to deal with thinning hair and receding hairlines. More volume and texture gives consumers confidence that issues with thinning hair can be masked or disguised. Relative to anti-breakage shampoos, volumizing shampoos have lower levels of awareness but higher levels of spend per item. This suggests that those who are in the know are prepared to spend on solutions that work.
There are over 10,000 product reviews of volumizing shampoos on Little Red Book. From our analysis of product reviews, the brands that consistently hit the mark with consumers in this sub-category include:
- Pola
- Kerastase
- Living Proof
- Philip B
- John Masters Organics
- Kiehls
If you’d like to know more about why these brands resonate, get in touch with our team for a free consultation.
3. Color and Style Products in China’s Haircare Market
While premature hair loss is an issue for China’s millennials, it certainly isn’t the only opportunity in China’s growing haircare market. Indeed, CBNData’s “High-End Hair Care Industry Consumer Insight Report” (2019) showed that hair dye had some of the fastest growth on China’s e-commerce platforms. COVID-19, which forced lockdowns across China, has accelerated this trend.
Post 95s, who make up 30% of the DIY hair dye sales, are looking for new ways to express themselves, and turn their hair into a canvas for self-expression.
Compared to the previous two opportunities, many of the most popular brands in this sub-category come from Japan and South Korea. They include:
- Kao
- EZN
- MISE EN SCENE
- Rishiri Kombu
- Aderans
Image source: Tmall EZN product page
—
Each of the above sub-categories are rich with opportunities. Consumers are still discovering the best solutions that work, and they’re open to trying niche imported brands. If you’re looking at this market, talk with our research and e-commerce teams to work out the best approach for you to gain traction with hair-obsessed millennials.
China Consumption To Double By 2030
Morgan Stanley analysts predict China’s private consumption is set to more than double to reach $12.7 trillion by 2030. Private consumption is driven by increases in household income and urbanization.
3 Invaluable Lessons About Gen Z Consumers in China from Bilibili’s CEO
Chinese “Gen Z” shoppers in their early 20s are emerging as an increasingly powerful force in China’s consumption landscape. They are the recipients of generous allowances from their parents. Our internal research estimates that, close to three-quarters of Gen Z consumers in China who are currently studying or looking for work receive an allowance higher than the minimum wage. This facilitates a lifestyle of exploration, instant gratification and experimentation.
A great window to begin to understand Gen Z consumers in China is Bilibili. Bilibili is an ACG (anime, comics, and games) entertainment platform. It currently has over 100 million users, who spend an average of 80 minutes per day entertaining themselves. A great primer on Bilibili has been published by our friends at Jing Daily.
Below, we’ve gone deeper by translating and synthesizing previous media interviews from Chen Rui, Bilibili’s CEO. We hope this can give you an insight into China’s Gen Z consumers that isn’t readily available from other sources.
Without further ado, here are three things Bilibili’s CEO tells us about China’s Gen Z.
1. Gen Z consumers in China have internal contradictions
Chen Rui believes that one of the keys to understanding China’s Gen Z is their internal contradictions. They are simultaneously picky and tolerant. Here’s what he means:
- Gen Z are picky about cultural content. They have high expectations for anime, comics and games they enjoy. They also have high expectations for objects or art forms that take inspiration from anime, comics, games, novels, movies and Chinese culture. When it comes to products, services and content, if the details aren’t right, then Gen Z will struggle to appreciate it.
- Gen Z are respectful of makers and creators. This respect extends to tolerance of mistakes – they don’t mind if a new game has a few glitches, or their favorite vlogger forgets what they’re trying to say. For brands that make their products with a strong sense of design, they key is to find ways to take Gen Z ‘behind the scenes’ and further appreciate what goes into making or creating the products Gen Z enjoys today.
First thought provoking question:
How can brand use co-creation to involve China’s Gen Z consumers in the creative process?
2. Gen Z Consumers in China ‘Go All In’ on the things they’re interested in
By now, you’re probably familiar with hobbyists and enthusiasts who spend time, effort and hard-earned cash on their passions. Consider our favorite enthusiast, Yan Shaoting, who won a Red Dot Design Award at 16 years old. He makes Iron Man Suits in his spare time.
Yan Shaoting poses with armor he designed and produced. Image source: Sina Weibo
But, to Bilibili’s CEO Chen Rui, what makes China’s Gen Z different is they hope their commitment to hobbies and passions can propel their life forward and open new possibilities. That is to say, a creative outlet isn’t just a thing that’s done on the weekend. Maybe it leads to new friends. Maybe it leads to fifteen seconds of (internet) fame. Maybe it leads to a side hustle. Whatever the outcome, the passion should be a force for momentum and progress.
Second thought provoking question:
How can brands facilitate pathways for enthusiasts to ‘level up’ their hobby?
3. China’s Gen Z Consumers Want To Have ‘Cozy’ Feelings Wherever They Go
Chen Rui believes Gen Z have grown up in a period of relative stability and harmony. Born into single-child families, China’s Gen Z have grown up with their parents (and even grandparents) attention and monetary support. This makes Gen Z highly accustomed to a level of comfort, and heightened sensitivity to things that make them feel uncomfortable. We call this feeling ‘cozy’.
What this translates into is earlier forays into luxury goods, greater affinity with products that match their needs, greater spending to refresh wardrobes and higher willingness to use consumer credit to fund impulse buys. What each of these instances tell us Gen Z consumers aren’t afraid to spend to extend how and when they feel comfortable and at ease.
For brands to resonate with Gen Z, they will need to have a strong appreciation of what type of comforts this young generation expects and what types of discomfort they seek to avoid. Consumer research can help brands understand these need states with greater clarity and precision.
Third thought provoking question:
What new levels of customer care and attention will Gen Z inspire?
Image source: luxe.digital @Thehautepursuit
That’s a wrap of the three things Bilibili CEO Chen Rui has taught us about China’s Gen Z consumers. It certainly leaves us with a lot to think about. We hope you learned a few invaluable things about this crucial generation of Chinese consumers.
China Niche Fragrance Boom
Chinese consumers’ demand for niche beauty, particularly fragrances, has increased over the past year.
New Brand Launch Success
Per Tmall data, more than 1,000 brands generated over RMB100 million last year just from the sale of new products. Read on for more insights on product launches in China!
3 Things You Must Know About CBD Skincare in China
CBD skincare is expected to become a $1.7 billion market in 2025. A key driver of this growth is the healing properties of CBD-infused skincare products, which can help alleviate acne, dryness, inflammation, and sensitivity problems. What about CBD skincare’s prospects in beauty-obsessed China, where women spend more on skincare luxury handbags?
Below, we give you three essential pieces of information about CBD skincare in China. If you’re a CBD-infused skincare brand and would like to know more about what’s possible in China, get in touch with our experts for a free consultation.
There Are Only Three Permitted CBD Skincare Ingredients in China
CBD-infused cosmetics typically use three leading derivatives of the cannabis plant: fruit, seed oil, or cannabis leaf extract. In 2015, China’s State Food and Drug Administration updated the Inventory of Existing Cosmetic Ingredients in China 2015 (IECIC2015) to include cannabis sativa fruit, cannabis sativa seed oil, and cannabis sativa leaf extract. At present, these are the only permitted CBD ingredients that can be used in CBD-infused cosmetic products. Note that CBD ingredients are not permitted to be used in food in China.
Domestic and International CBD Skincare Players Are Active In China
There are a handful of early movers in the market. These include:
- Simpcare
- Cannafever
- INBRIZ
- Uncle Buds
- Pacifica
- NORDICCOSMETICS
- Revolution
Of these, Simpcare, Cannafever and INBRIZ are domestic players. All three have been backed by local venture capital. International players would be wise to take note of what domestic players are doing, especially around face masks and ampoules. These are product propositions more attuned to the needs of Chinese consumers.
This is to say, incoming international players think about localizing their products and communications if they are to succeed long-term in China. You can use our handy market entry checklist to think about this.
Most International Brands Sell CBD Cosmetics in China Through Cross-Border e-Commerce
China has strict narcotic control laws. Many international brands have decided to sell only through cross-border e-commerce, rather than attempt to import into China and sell through general trade. This is because cannabis ingredients are subject to strict supervision by China’s Public Security Bureau. This makes importing CBD skincare products into China and selling through retail channels very challenging.
Tmall Global has become a go-to destination for beauty brands that want to reach Chinese consumers without going through a litany of red-tape.
Apart from allowing CBD-infused cosmetics brands to sell into China, launching via cross-border e-commerce also has a number of advantages:
- Test Market Demand: A launch via Tmall Global allows new market entrants to de-risk their entry into China and assess market demand over a 12 or 18-month period, before looking to commit further resources and explore distribution opportunities within China’s massive consumer market.
- Validate Market Entry Business Case: North American and European brands prefer test-and-learn approaches to market entry. Entry through e-commerce allows brands to gauge what sort of effort and resource commitment they’d need to pursue entry into China. In addition, it also allows newcomers an opportunity to test and finesse assumptions about their unique value proposition, marketing, pricing, merchandising and relative strength against domestic and international competitors.
- Build in-Market Presence: Although there are indirect channels to reach Chinese shoppers (like overseas influencers and airport retail), these don’t deliver the return-on-investment that in-market presence does.
If you’re a CBD-infused skincare brand and would like to know more about what’s possible in China, get in touch with our experts for a free consultation.