According to China Online Cosmetic Shopping Research 2011 recently released by iResearch, online cosmetic market in China indicates the mutual integration of all the participants involved online cosmetics shopping, the rapid increase in the market share of cosmetic B2C sales, and the one-after-another launching of private brands by the cosmetic B2C enterprises.
Trend 1: Participants in the online cosmetic market integrate with each other. Enterprises as participants involved in online cosmetics shopping are varied, consisting of not only Internet cosmetic brands (including independent Internet brand and cosmetic Tao brand), Internet sales channel brands, but also the brick and mortar cosmetic companies (including cosmetic brand manufacturers and distributors). Apart from giving the full play to their own advantages, the related enterprises also actively learn from their peers. For example, the internet cosmetic brands make the best use of other sales channels through internet, and even open offline stores in addition to their original platforms to enlarge their influence online and offline. Traditional cosmetic companies on the one hand build their own shopping platforms; on the other hand they keenly explore other sales channels through internet. Some traditional cosmetic brand manufacturers get ready to launch their pure E-brands. iResearch holds that although various enterprises participate in online cosmetic shopping, they do have the same goal, i.e., to promote the online sales of cosmetics. Therefore, they are bound to learn from and integrate with each other.
Trend 2: Market share of cosmetic B2C rapidly increases. In terms of the market structure of online cosmetic shopping, B2C takes the proportion of 29.2% in 2011, an obvious rise compared with 2010 (13.5%). According to iResearch, compared with B2C enterprises, cosmetic C2C enterprises were established later, mainly in 2008. In recent years, cosmetic B2C enterprises developed rapidly. Taking the wings of group buying, a great many cosmetic B2C enterprises rose in 2010. The market size of cosmetic B2C is swiftly expanding. In the next few years, customers will attach more and more importance to the quality of cosmetic products, and the market share of cosmetic B2C will continue to increase.
Trend 3: Cosmetic B2C enterprises launch private brands one after another. The biggest difficulty for online cosmetic shopping is to maintain the supply chain of cosmetic products. In order to sustain the offline sales channels dominated by them, cosmetic brand manufacturers often limit product supply to online sellers. Even though cosmetic brand manufacturers began to enter the online market, they prefer to open flagship stores on Tmall (Taobao Mall) and sell their products at regular prices. Against this backdrop, various cosmetic B2C enterprises start to launch their private brands to increase their profit margin and better control the supply chain. Some of them have already introduced their private brands, some others even have established their advantageous position in the market relying on their private brands. iResearch believes that, more and more cosmetic B2C enterprises will launch private brands of their own, but the challenges to them are how to ensure the quality of cosmetic products and how to conduct marketing promotions.