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Personal Care

Personal Care

Online upstart brands reach young consumers

Global brands dominate aspirational market segment

Personal care sales overall plummeted during the first quarter of 2020, although products related to health and hygiene experienced strong demand during the lockdown period of the COVID-19 pandemic and into the recovery.

Certain personal care products, including toothpaste and haircare, experienced a V-shaped decline and recovery. The COVID-19 sales experience for other personal care products, including makeup, was more U-shaped, according to Kantar’s Worldpanel division.

Emerging from the COVID-19 pandemic, demand for health and wellness products are expected to remain strong, and the popular channels—online, O2O, and live streaming—should continue their steady growth. The channel shift to online, and the increase in online festivals and live streaming had driven increased promotion for certain personal care products prior to the pandemic.

Consumers traded up, especially in skin care, where young people, in a “lipstick effect,” bought symbolic luxury prestige items. Anti-aging products were popular, and not primarily because China is an aging society, but because young women purchased the products to slow the aging process.

Besides seeking an affordable luxury or indulgence, consumers also spent on personal care because of their interest in health and wellness. They demonstrated increased awareness of the ingredients in cosmetics and other personal products.

Although international brands—available online from sites such as the Tmall International Store, WeChat, and Little Red Book—continued to dominate the aspirational end of the market, upstart Chinese personal care brands, such as Perfect Dairy, continually emerged, reaching young consumers on Tmall and Taobao, and using WeChat tools to manage relationships with followers.

Still relatively small, the emerging Chinese brands do not appear in the BrandZ™ personal care category, which declined 12 percent in value based on the results of the venerable skincare brand Dabao, the only brand in BrandZ™ China personal care ranking.

However, upstart brands pressured multinationals to support their umbrella brands while at the same time introducing sub-brands to satisfy specific consumer needs and grow penetration, according to Kantar analysis.