Beauty and personal care in Asia Pacific has had a couple of tough years recently due to the pandemic. The first was 2020, when a number of countries in the region recorded declining sales with the emergence of the virus. The second was 2022, when China saw a sharp downturn in sales due to a resurgence in COVID-19 cases here in this year, negatively impacting the overall regional performance. However, the forecast period is expected to see healthy annual growth rates in real value terms.
This report comes in PPT.
China was seeing the continued rise of local brands in 2022, with domestic brands being closer to local consumers and able to meet their needs faster and in a more targeted way, while also offering more affordable prices and more comprehensive marketing channels. Local brands such as Winona or MGPIN are even making strong gains in the premium segment. With the continued popularity of China-Chic, home-grown brands are expected to continue to grow.
Beauty brands were leveraging digital engagement and marketing campaigns with brand ambassadors to ensure strong brand recall during the pandemic in India. This led to increased consumer knowledge, which in turn led to an amplified focus on the ingredients of beauty products. With brands increasingly highlighting key ingredients in their campaigns, vitamin C, salicylic acid, niacinamide and hyaluronic acid were among the ingredients gaining favour.
While e-commerce continued its inexorable rise in South Korea, reaching a 52% share of retail value sales in 2022, direct selling continued to lose share in this country. The declining number of salespersons makes it difficult to attract younger generations to form part of the customer base. In addition, not only is the main customer base becoming older, but tightening industry regulation is making it harder for new entrants.
In 2021, Kao Corp established a single cosmetics division to integrate brands owned by Kao and Kanebo Cosmetics, which used to work as separate teams to sell their respective brands. Since then, it has been reviewing its portfolio to strengthen its competitiveness through selection and concentration, with this expected to see the discontinuation of 28 brands by 2024.
This is the aggregation of baby and child-specific products, bath & shower, deodorants, hair care, colour cosmetics, men's grooming, oral hygiene, fragrances, skin care, depilatories and sun care. Black market sales and travel retail are excluded.
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