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E-commerce localisation and local production key to staying competitive in China’s crowded cosmetics

To compete with local brands, international cosmetics brands increasingly work with bloggers and influencers, or key opinion leaders (KOLs), to promote their products in China, according to a recent report compiled by EY-Parthenon (EYP), Ernst & Young's global strategy consulting arm, on China's beauty market.

Against the backdrop of stronger preferences for home-grown brands, international brands must find ways to better engage with China’s 260 million Gen-Z consumers, whose wealth is growing faster than their counterparts elsewhere. They are also more willing to spend on their skin.

Domestic market players currently account for 56 per cent of China’s beauty market, according to the EYP report, citing Tencent’s China Cosmetics Insights Report. They include contract or private-label manufacturers that have been established in China for years and leading domestic ODM/OEM manufacturers. As well as a more competitive marketplace, the more stringent regulatory environment has become a driving force for market consolidation. EYP believes that the current landscape is in favour of medium and large-sized contract manufacturers.

Beauty KOLs are gaining more popularity among Gen Z-ers on social media because they find them easier to follow their interests. These KOLs have a huge following on social media and are often influential with their audiences. The rise of e-commerce channels has also increased the speed of product distribution, resulting in a faster-paced, more competitive market. Read More at

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