The Chinese Men's Cosmetic Market: Guangzhou, Hong Kong and ...

3 times that of rural China (Nielson). By 2025, it is projected that 59% of China’s urban
households will be in the upper middle class and earning between $20,000 and $40,000
per year (Nielson). This increase will stimulate spending in areas such as food, apparel,
household products, and personal products.
Growing Middle Class
According to The China State Information Center (CSIC), the Chinese middle
class currently contains around 300 million people. While classifications differ, if a
Chinese citizen has a stable income sufficient to afford an apartment, a car, a child’s
education, and more discretionary purchases, they are likely to be considered members of
the middle class (LiAnne Yu). As of 2010, about 25% of the population falls into this
category (Nielson). There has been a 350% increase in per capita income over the last 60
years and the population is on track to create a 700% growth over the next 20 years. By
2025, there should be a consumer market of around 1.3 billion people (Nielson).
Although the wealth is highly concentrated in urban areas, overall increased income is
driving the spending habits of the population (Nielson).
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China’s New Consumer
China’s new consumers view products as status symbols (LiAnne Yu). Increased
competition in the job market has caused a recent surge in the cosmetic industry as
individuals are looking to differentiate and improve their appearance to improve their
professional standing. The wealthiest consumers in China will be between 25 and 44
years of age (Nielson). China’s new consumers are young, have higher incomes, and
access to more information. These shoppers frequent hypermarkets and supermarkets
channels for their spending channels. “Convenient to get”, “Staff provided good service,”
and “clean and hygienic stores” are the key drivers influencing where these customers
choose to shop (Nielson).
Chinese Consumer Confidence
The Consumer Confidence Index measures the degree of optimism that
consumers feel about the overall state of the economy and their personal finances.
Consumer confidence levels above and below a base of 100 represent varying degrees of
optimism and pessimism. Shoppers growing confidence reflects an increased willingness
and ability to spend (Daily). The Nielson Consumer Confidence survey asks over 3,500
Chinese how confidently they feel in regards to their job, financial prospects, and
willingness to spend (Nielson). Results from the most recent survey indicate that Chinese
consumers are increasingly optimistic. In the most recent Nielson survey from 2009,
China’s average consumer confidence score was 103 while the world average was only
87 (Economics).
Cosmetic Market
On a national level, shampoo leads the non-food spending categories with an annual
growth rate of around 7%. Additionally, skin moisturizer has an annual growth rate of
around 11%. Toner achieved the highest non-food growth rate with a 37% national sales