Anti-ageing skin care booms in Hong Kong, by Euromonitor International
Anti-ageing products are driving growth in Hong Kong's skin care market, on the back of increasing consumer interest in premium products and the development of consumer-focussed cosmetics retailing, according to a new report from Euromonitor International – “Cosmetics and Toiletries in Hong Kong, China”.
Euromonitor International's research shows that anti-ageing products recorded impressive value growth of 9.5% in 2005, jumping from 3.5% growth in the previous year. Along with strong performance from moisturisers and facial cleansers, the impressive performance of anti-agers helped the overall skin care sector achieve 7% growth in the same year.
Product quality is key
Euromonitor International's research shows that while a buoyant economy and the rising number of mature and affluent women in Hong Kong have heightened demand for anti-ageing products, women in Hong Kong are increasingly turning to premium products, which is injecting even greater value in the market.
Consumer interest in premium products has been spurred, in part, by recent media reports on the safety of chemicals present in some skin care products. For example, the Hong Kong Consumer Council revealed that the number of complaint cases about cosmetics products had risen to 103 cases in the first six months of 2005, underscoring a rising trend in consumer concern for product safety. In order to assure the quality of their skin care products, Hong Kong consumers are now increasingly opting for premium and high-end mass products, which they perceive to be safer.
Catching on to this consumer trend, manufacturers have been introducing more premium anti-ageing products containing rare ingredients, and products benefiting from more advanced technology, to the market. This has generated greater consumer interest in premium quality products and has provided a further boost to the market. Guerlain, for example, is expected to launch a new skin care cream in 2006, which is based on a rare orchid extract and is expected to retail for more than US$350. Further, a recent entrant to Hong Kong's skin care market, Sulwhasoo - a high-end herbal based brand from AmorePacific of Korea – draws on Oriental medicine by using a unique compound of five herbs to deliver a range of products targeted at women over 35.
Premium brands sell an experience
Another key driver of growth in the anti-ageing products market in Hong Kong is the trend towards concept stores and beauty boutiques, which are retail outlets designed to emphasise the experiential aspects of premium cosmetic products. Developed to attract new customers and gain their loyalty in Hong Kong's increasingly competitive market, these brand-specific beauty salons and spas, not only engage in a highly involved product sales process, but also provide make-up and skin care services. Since 2004, major players, such as Kose, L'Oréal, H2O and cult brand Aesop, have set up concept stores around the city, in the hopes of developing a loyal customer base.
L'Oréal Hong Kong has used this strategy to increase its visibility through the establishment of more stores catering to separately distinct customer segments. In 2005, for example, L'Oréal Hong Kong opened its first Vichy concept store in Causeway Bay, targeted specifically at consumers with mild skin problems. L'Oréal plans to open more stores within its brand portfolio in the coming years.
In the next five years, Euromonitor International expects anti-ageing products to continue to perform strongly, achieving average annual growth of 6.4% between 2005-2010. Anti-ageing products are expected to achieve strong value growth, not just on the back of an ageing population, but also due to Hong Kong's increasingly beauty conscious consumers who value product quality as well as the experience of buying the product. On the supply side, product manufacturers are expected to continue developing new anti-ageing products that boast scientifically advanced ingredients and attract consumers with their premium status.
For further detail about this article and other related findings, please visit Euromonitor International by clicking here.