2020
0
Beauty Consumers in Lower Tier Cities – China – December 2020
2021-03-20T03:04:18+00:00
OX1071257
3695
135723
[{"name":"Beauty and Personal Care","url":"https:\/\/store.mintel.com\/industries\/beauty-personal-care"}]
Report
en_GB
“Although they widely use online information channels, lower tier city consumers have more trust in ‘ordinary people’. They are active users of online shopping channels but have widespread distrust about…

Beauty Consumers in Lower Tier Cities – China – December 2020

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Report Summary

“Although they widely use online information channels, lower tier city consumers have more trust in ‘ordinary people’. They are active users of online shopping channels but have widespread distrust about the authenticity of products bought online. Many are using essence/serum in addition to toner, lotion and cream, but there is still great potential for them to upgrade to advanced functions. They may have heard of sensitive skin but have a vague idea of what it means, etc. This is the profile of lower tier city females who are ‘in transition’ and are catching up with tier one city counterparts. To target these audiences, which have huge potential, brands need to first understand the differences in perceptions, understanding and habits between them and tier one city consumers and then adjust their marketing strategies to better compete in lower tier markets.”
– Anne Yin, Research Analyst

Key issues covered in this Report

  • Trusted BPC information channels
  • Preferences and trust in online and offline purchase channels
  • Opportunities within personal grooming routines
  • Skincare knowledge of lower tier city females and ingredients-driven consumers
  • Perceptions and preferences for skincare brand origins
  • How at-home beauty devices can attract lower tier city consumers

Table of Contents

  1. Overview

    • Introduction
      • Key issues covered in this Report
        • Report scope
          • Objective and research methodology
            • Quantitative research
              • Figure 1: Sample structure for each city
            • Qualitative research
              • Figure 2: Interviewed cities in the qualitative research
              • Figure 3: Profiles of respondents to the qualitative research
          • Executive Summary

              • Create information sources that feel like ‘ordinary people’
                • Figure 4: Skincare information source, by city tier, April 2020
                • Figure 5: Attitudes towards information from ordinary people and ‘authenticity’ – interview excerpts
              • Reduce trial-and-error risks of online BPC shopping
                • Figure 6: Most used BPC information and shopping channels – first choice, by city tier, December 2019
                • Figure 7: Online shopping – interview excerpts
              • Show visible product benefits to encourage function-oriented trade-up
                • Figure 8: Facial skincare usage, by city tier, August 2020
              • Skincare buzzwords are penetrating city tiers but need clarification
                • Figure 9: Sensitive skincare products – interview excerpts
              • International brands have potential to penetrate lower tier cities and domestic brands need premiumisation
                • Figure 10: Country preference, by city tier, April 2020
                • Figure 11: Skincare brand awareness – interview excerpts
              • Drive beauty device adoption by providing services
                • Figure 12: Attitudes towards beauty technology, beauty devices and beauty services, by city tier, August 2020
                • Figure 13: Beauty devices – interview excerpts
              • What we think
              • Introduction to Lower Tier Cities in China

                • Population and spending power
                  • Spending by tier three or lower cities increases and makes up a larger share
                    • Figure 14: City populations and sales, by city tier, end of 2018
                  • Per capita disposable income and spending power grows
                    • Figure 15: Per capita salary vs per capita retail sales, by city tier, 2018
                  • Demographic profile/analysis
                    • Gaps between city tiers narrowing in both economic and educational respects
                      • Figure16: Educational level of surveyed respondents, June 2017-2020
                      • Figure 17: Car ownership and gym membership, by city tier, June 2017-2020
                    • Spending confidence since the COVID-19 outbreak
                      • Figure18: GDP sector compositions, by city tier, 2018
                      • Figure19: Changes in financial status, percentage of respondents claiming they are ‘better off’, by city tier, April – November 2020
                      • Figure 20: Confidence in improving future finances, very confident – somewhat confident, by city tier, April – November 2020
                  • Lower tier cities penetrated through various information channels

                    • Quantitative data: online channel penetration similar to tier one cities
                      • Figure 21: Skincare information source, by city tier, April 2020
                      • Figure 22: Skin age management information source, by city tier, February 2020
                      • Figure 23: Information source for new skincare brands and trends, by city tier, August 2020
                    • Qualitative analysis: low conversion – online platforms serve more as information validation tools
                      • Figure 24: Gaining beauty information online – interview excerpts
                    • Qualitative analysis: consumers follow influencers recommended by acquaintances
                      • Figure 25: Reasons for following KOLs – interview excerpts
                    • Qualitative analysis: not hostile to adverts, yet cautious and sceptical about soft advertising
                      • Figure 26: Attitudes towards ads – interview excerpts
                      • Figure 27: Attitudes towards information from ordinary people and ‘authenticity’ – interview excerpts
                    • What does it mean for brands?
                      • Ordinary people’s reviews to replace soft ads
                        • Figure 28: Example of official accounts posting user reviews, China, 2020
                      • Use more ‘ordinary’ influencers as channel for communication
                      • Online shopping won’t replace brick-and-mortar channels

                        • Widespread concern about fake products hinders e-commerce expansion
                          • What’s different as suggested by the quantitative data?
                            • Figure 29: Most used BPC information and shopping channels – first choice, by city tier, December 2019
                          • Why the difference as suggested by qualitative research?
                            • Figure 30: Online shopping – interview excerpts
                          • Live streaming/short videos have limited ability to instantly convert viewers into customers
                            • What’s different as suggested by the quantitative data?
                              • Figure 31: Most used BPC online shopping channels – rank up to 3, by city tier, December 2019
                              • Figure 32: Purchase behaviours in live streaming/short video platforms, by city tier, December 2019
                            • Why the difference as suggested by qualitative research?
                              • Figure 33: Not buying BPC products on short video/live streaming platforms – interview excerpts
                              • Figure 34: Buying BPC products on short video/live streaming platforms – interview excerpts
                            • What does it mean for brands?
                              • Reduce the trial-and-error cost of online BPC shopping
                                • Figure 35: Example of applying for free samples or buying samples
                              • Offline channels still significant to BPC market
                                • E-commerce needs to build trust via offline channels
                                  • Figure 36: Popular photo spot at Colourist – example of a rainbow beauty blender wall
                              • Benefits-oriented when selecting products

                                • Following skincare routines in higher tier cities
                                  • What’s similar as suggested by the quantitative data?
                                    • Figure 37: Usage of facial skincare products, by city tier, August 2020
                                  • Why the similarity as suggested by qualitative research?
                                    • Figure 38: Skincare routine – interview excerpts
                                    • Figure 39: Simplify skincare routines occasionally – interview excerpts
                                  • Potential exists in functional upgrade
                                    • What’s similar as suggested by the quantitative data?
                                      • Figure 40: Purchase factors in facial skincare products, by city tier, August 2020
                                    • Figure41: Skin issues – tier three or lower cities, by age, August 2020
                                      • Figure41: Skin issues – tier three or lower cities, by age, August 2020
                                    • Why the similarity as suggested by qualitative research?
                                      • Figure 42: Functional claims in skincare routines – interview excerpts
                                      • Figure 43: Most indispensable skincare products – interview excerpts
                                    • Figure44: Using products from multiple brands – interview excerpts
                                      • Figure44: Using products from multiple brands – interview excerpts
                                    • Straightforward demonstration of benefits is needed
                                      • What’s different as suggested by the quantitative data?
                                        • Figure 45: Attitudes towards resolving skin issues instantly, by city tier, April 2020
                                      • Why the difference as suggested by qualitative research?
                                        • Figure 46: Proof of efficacy – interview excerpts
                                      • What does it mean for brands?
                                        • Benefits upgrading should come before introducing more sub-categories
                                          • Communicate benefits in a more straightforward way
                                            • Figure47: Example of demonstrating skin improvement in a straightforward way, China, 2020
                                        • Skincare knowledge in lower tier cities

                                          • Varied definitions of sensitive skin due to knowledge gaps
                                            • What’s different as suggested by the quantitative data?
                                              • Figure 48: Skin type, female, by city tier, June 2020
                                            • Why the difference as suggested by qualitative research?
                                              • Figure 49: Sensitive skin – interview excerpts
                                              • Figure 50: Sensitive skincare products – interview excerpts
                                            • Sought-after ingredients divided into different tiers
                                              • What’s similar as suggested by the quantitative data?
                                                • Figure 51: Natural vs synthetic ingredients – “naturally derived ingredients (eg coconut oil, honey, green tea, etc) ”
                                              • Why the similarity as suggested by qualitative research?
                                                • Figure 52: Product smells – interview excerpts
                                                • Figure 53: Following ingredients guru influencers – interview excerpts
                                                • Figure 54: Benefits and ingredients awareness – interview excerpts
                                              • Offline experts are more convincing
                                                • What’s different as suggested by the quantitative data?
                                                  • Figure 55: Preference of communication channel with beauty advisors/brand representatives, by city tier, August 2020
                                                • Why the similarity as suggested by qualitative research?
                                                  • Figure 56: Sensitive skincare products – interview excerpts
                                                • What does it mean for brands?
                                                  • Perceptions of buzzwords need correction
                                                    • Use high tech to enhance the professionalism of offline channels
                                                      • Figure 57: Example of Skin Run skin diagnosis equipment, China, 2020
                                                    • Indicate the association between benefits and ingredients
                                                      • Figure 58: Example of matching the ingredients to corresponding functions, China, 2020
                                                  • Consumers see some skincare brand nationalities through rose-tinted glasses

                                                    • Imported brands still have potential in lower tier market
                                                      • What’s different as suggested by the quantitative data?
                                                        • Figure 59: Country preference, by city tier, April 2020
                                                        • Figure 60: Reasons to choose Chinese brands, by city tier, April 2020
                                                      • Why the difference as suggested by qualitative research?
                                                          • Figure 61: Skincare brand awareness – interview excerpts
                                                          • Figure 62: Japanese and Korean skincare brand awareness – interview excerpts
                                                        • What does it mean for brands?
                                                          • A good opportunity for international brands to tap into lower tier markets
                                                            • Patriotism alone does not fix all; domestic products have to appeal to benefits-driven consumers
                                                                • Figure 63: Reasons for choosing their commonly used domestic products – interview excerpts
                                                            • Beauty technology needs an alternative approach to expand

                                                              • Consumers use beauty devices less but trust beauty technology
                                                                • What’s different as suggested by the quantitative data?
                                                                  • Figure 64: Usage of beauty devices, by city tier, August 2020
                                                                  • Figure 65: Attitudes towards beauty technology, beauty devices and beauty services, by city tier, August 2020
                                                                • Why the difference as suggested by qualitative research?
                                                                  • Figure 66: Beauty devices – interview excerpts
                                                                • Qualitative analysis: service-driven sales business model rivals beauty salons
                                                                  • Figure 67: Beauty salons – interview excerpts
                                                                  • Figure 68: Beauty salons – interview excerpts
                                                                • What does it mean for brands?
                                                                  • Beauty device brands should help consumers become more active by providing services
                                                                    • Figure 69: Skin test and record function of apps that come with the beauty device
                                                                • Appendix –Abbreviations

                                                                  • Abbreviations

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