Wear masks, buy from domestic brands, and help the economy of your country to get back to where it was and even higherJuly 31, 2020
China soars on the stock market thanks to the beauty industry. The pandemic is helping online marketing in breaking records since skin care and hygiene are more important than ever.
Looks like Korean beauty brands famous worldwide for making wonders are getting a great competitor. China’s cosmetic brands seem finally ready to step up to their rivals in the industry and on the stock market, due to the pandemic and their people determined to help the economy even by buying beauty products. The rise in the popularity of domestic makeup products is an example. Supporting local businesses is what is essentially the product of the pandemic upheaval. We got to see many winners and losers in this type of situation.
Shares of Proya Cosmetics Co. and other beauty companies have soared this year, outpacing the gain in Shanghai’s benchmark index. Compared to the cosmetics makers, such as Japan’s Shiseido Co. and South Korea’s Amorepacific Corp. have shown to be most prone to deteriorating after the rise of Chinese competition. They have gone down by more than broad market indexes in their native countries.
What’s the deal?
It is pretty easy to understand the shift in the economy that happened during the lockdown. Many expected beauty products to go down. It happened with makeup products for a bit, but people still want to experiment. Now is a perfect time, since they feel most comfortable at home, they can try whatever they want, and enjoy themselves while having some fun. Consumerism changed massively, and the habits we are implementing now are all “thanks to” the coronavirus – from increased online shopping to new ways of marketing things. People are spending much more time online because they are unemployed or working from home, or they want to find something to take their mind off of COVID. This also encouraged consumers to search for good deals, lower prices, and China’s digital-savvy makeup brands ready to take advantage of it.
Who is the current leader in the field?
Companies such as Proya have been smartly ahead in using every type of digital marketing, from influencers to live to stream, to promote and sell their products. The cosmetics company from Hangzhou hired singer and songwriter Cai Xukun as a brand ambassador. According to the June reports, products are sold online much more in China than any other country in the world – 86% of local cosmetic products are sold online, compared to 58% for multinationals.
Keep calm and wear masks.
Since many people started having irritations from wearing masks always, skin products became number one, and the skincare industry is now more critical than ever. People are looking for ways to soothe their skin, and a face cream by Jahva (Shanghai company) surged 500% on the stock market in the first quarter compared to last year.
Trade War uplifts alternative options.
China’s consumers turned away from overseas products because of sparks between the US and UK and tried local alternatives instead. Younger people became enthusiastic about supporting local businesses and helping the economy of their own country. This year, Dr. Yu was named one of the top patriotic brands, thanks to the customers who are making profits for them.
Dr. Yu is not the only one here – Shanghai Pehchaolin Daily Chemical Co., the country’s biggest domestic skin care company, has 7.3% of China’s mass skincare market, only behind L’Oreal SA. Chando is third place on 5.5% with Procter & Gamble Co.’s Olay. You can say that the stock market regarding beauty is really in bloom.
The final result
The trend is disrupting an already annoying order and expected line of trading. With money staying at home and consumers changing where their spending is going, multinational companies face a serious economic problem.
If China’s neighbors are showing anything, it is that this change could have a lot further to run. Worldwide companies still hold 46% of the country’s mass-market cosmetics revenue. It looks like there is a lot more to expect in the future from Chinese beauty companies.