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

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value growth from 2008-2009 (Nielson). The significant amount of growth has come from the recent emergence of men’s cosmetic products. Hong Kong is one of the most significant areas of opportunity for men’s skin care products. The Deloitte Business case study states that Hong Kong is an important launch pad for marketing cosmetics and skincare products into the mainland Chinese market (Deloitte). Over 23 million tourists visit Hong Kong for shopping and tourism each year with a majority of those visitors from the mainland. Retailers and distributors are eager to increase the variety of men’s cosmetic products and are looking to cater to needs of the local population (Deloitte). In 2010, the size of the cosmetic market was estimated at $1.169 billion and is expected to grow 21% in 2012. Male consumers in Hong Kong between 30 and 49 represent the largest age group, have the highest disposable income, and are the biggest buyers of men’s skincare products (Deloitte). To help meet the demands of the market, there has been an increase in the number of men-only skincare salons opening throughout this region (Deloitte). Market Demand 8 Size of Market and Potential Market Growth As the job markets are becoming more saturated and competitive, men are beginning to show more of an interest in how they look. This phenomenon has created a large market for men’s cosmetic products. The male cosmetic industry in China is seeing aggressive growth rates in several regions. With about ten percent of Chinese men already using skin care products made specifically for them the market is projected to expand by 28.7 percent by 2014 (Terradaily.com). Research indicates that as a man’s income rises in China they will begin to purchase personal care cosmetics in order for them to get ahead professionally. The current leading consumers of men’s cosmetics in China are the white-collar workers who are entrepreneurs with above average salaries. China will account for half of global growth in the men’s skin care market from 2009- 2014 which opens up huge opportunity for growth for cosmetic companies (Euromonitor). Even though 500 of the 3500 cosmetic manufactures in China are foreign owned they control eighty percent of the market share (Factsanddetails.com/China). In 2010 the sale of men’s skin care products increased by thirty percent to $280 million in China, ahead of the United States (Terradaily.com). Increasing consumer-lending demand for specialized products will drive the Chinese cosmetics and toiletries market to grow at a compound annual growth rate of around 12% during 2011-2014, says RNCOS.com. With such a spike in demand for male cosmetics, spa’s are unable to keep up with demand which results in opportunity for retail sales for companies like Proctor and Gamble and L’Oreal. Research demonstrates that men are embarrassed to buy cosmetics for themselves and often have a family member or wife purchase the products for them which results in female and male cosmetics to be sold together in China for ease of sale. In 2010, the population in China was 1,339,724,852 with 51.27% being males. With about 72% of the
675 million males in China falling between the ages of 15-65 this leaves a potential market of about 410 million males with only 41 million or ten percent currently purchasing cosmetics leaves about 369 million potential new customers. This is a massive market size to target which opens opportunity to current and new cosmetic manufacturers and retailers. Consumer Behavior: The Gross domestic product (GDP) at purchasing power parity (PPP) is the sum value of all goods and services produced in a given year at prices prevailing in the United States. Here are the figures for the year 2010. Hong Kong Macau Shenzhen Guangzhou GDP PPP (billion $) 224.46 31.27 146.44 163.32 GDP per capita ($) 34,587 59,451 14,615 12,860 The GDP per capita is the gross domestic product divided by the population. We can see that Macau and Hong Kong have a high purchasing power. (GDP; PPP (US dollar) ) It means that many people likely have the disposable income to afford non-essential lifestyle products such as cosmetics. Therefore, these markets are very interesting. 9 Chinese general tastes and preferences: Chinese consumers who are concerned about the environment mainly live in the big cities like Shanghai or Beijing. More and more of these men are also concerned with their health status. This is why many advertising campaigns use issues such as being overweight, pollution, and skin care issues to create a demand for their products. Chinese consumers are unpredictable and demanding and many factors may come into play when buying a product. There are not as brand loyal as American consumers but they love famous brands. (Labbrand) They are very influenced by price and innovations. Chinese people also appreciate luxury goods and products associated with luxury. A good cosmetic product must highlight the health benefits and have a relatively luxurious packaging with a price comparable to those of the competitors. Those purchasing decision influence factors are summarized in the following graph.
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The Chinese Men's Cosmetic Market: Guangzhou, Hong Kong and ...

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