China beauty suppliers turn to new markets for expansion

By Simon Pitman

- Last updated on GMT

Related tags Cosmetics China

China beauty suppliers are no longer relying on the phenomenal growth seen in the domestic in recent years to expand their businesses, suggests a new market report.

Suppliers are now tapping into new markets by turning to natural and organic, as well as mineral ingredients as a means of expanding their businesses in new markets, according to a report from Global Sources.

Entitled China Sourcing Report: Beauty & Cosmetics, t​he report also points to the fact that China beauty suppliers are also successfully cornering these markets by focusing on packaging innovation and ensuring shorter validity quotes and delivery.

The report ​covers a spectrum of cosmetic and personal care product categories, including makeup for the face, lips and eyes, application brushes and tools, skin and nail care, cosmetic bags and cases, and facial appliances.

Suppliers think 2011 will be a good year

According to the authors, feedback from China beauty suppliers is that they are confident about maintaining business growth and generating new orders throughout the course of 2011.

"Optimism is strong despite less-than-brilliant growth prospects in traditional markets such as the United States and Europe. Suppliers are compensating quite successfully by tapping much deeper into emerging markets such as Asia, the Middle East, Russia and South America,"​ added Livia Yip, publisher of the report..

The optimism comes despite the fact that China is now facing rising inflation, partly fuelled by increasing wage costs. Indeed, 37 percent of beauty suppliers interviewed as part of the report, pointed to rising wages as a threat to their future business.

Makeup and skin care lead the way

But despite this problem, the beauty suppliers still believe the business prospects and growth potential outweigh the additional costs they are likely to incur in the coming year.

"Manufacturers in China's beauty and cosmetics industry eagerly anticipate export growth of at least 20 percent in the next 12 months,”​ said Yip. “This follows exports of make-up and skin care products shooting up by 22 percent year-on-year to $358 million in January-June 2010, according to industry estimates.”

The report also highlights the fact that almost 90 percent of the beauty suppliers questioned, said they were planning on increasing capital expenditure, while 64 percent said they were planning on offering better packaging and investing in staff training also proved to be a general trend.

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