Industry Information: The personal care segment is highly prosperous and the market structure is fragmented

Industry Information: The personal care segment is highly prosperous and the market structure is fragmented

 

With the change of residents' pursuit of a better life and consumption concept, as well as the enhancement of consumers' interest in user experience sharing of personal care products on social media platforms and the promotion of KOL (KeyOpinionLeader, meaning key opinion leader, such as well-known bloggers, etc.), residents' demand for personal care products continues to increase.

 

According to Forrester & Sullivan data, the compound annual growth rate of domestic per capita spending on personal care products from 2015 to 2021 is about 11.5%, but compared with developed countries, there is still room for greater growth, and domestic per capita spending on personal care products in 2021 is less than 1/5 of the United States, Japan and South Korea.

 

Segment market infant and child care rise, online trend is obvious

 

Scientific and fine parenting has become a new fashion, and the current generation of parents have gradually become the core consumer group, and their consumption concept of maternal and child products is more advanced and their consumption willingness is stronger, thus driving the overall demand for baby and child care market to steadily increase. According to the data of Insight Consulting, the scale of China's infant and child care market increased from 18.6 billion yuan in 2017 to 29.7 billion yuan in 2022, corresponding to a CAGR of 9.82%; It is expected that the market size in 2023-2027 is expected to grow from 34.7 billion yuan to 51.1 billion yuan, corresponding to a CAGR of 10.15%. E-commerce accounts for a relatively high proportion of consumption channels. According to the data of Caux Consulting, online channel sales accounted for more than 44% of China's baby and child care products market in 2022, an increase of 21.08pct compared to 2017.

 

The baby and child care market is advancing rapidly online

 

The domestic personal care industry (including the infant and child care sector) is a fully competitive market, with many enterprises in the market and a low level of market concentration. According to the data of Insight Consulting, the number of domestic enterprises in the personal care industry is about 5,500, of which more than 1,000 enterprises in the infant and child care industry; According to Frost & Sullivan data, the top five companies in the domestic personal care market have a combined market share of only about 8.9%.

 

The rise of domestic brands

 

In recent years, thanks to the in-depth understanding of the local market, effective marketing strategies, increasing research and development capabilities, popularity among young consumer groups, continuous penetration of e-commerce channels and changes in consumption concepts, domestic brands have gradually risen, and the market share of domestic brands has increased year by year. In the market segment of maternal and child care products, according to Euromonitor International data, in recent years, the total market share of domestic brands in the top 25 brands in the maternal and child care industry has shown an increasing trend year by year, and surpassed the top 25 foreign brands for the first time in 2019, and the market share of domestic and foreign brands in the top 25 brands in 2021 was 20.2% and 17.4%, respectively.

 

 

The domestic nursing industry is fully competitive and the market concentration is at a low level

 

The essential oil market is growing rapidly

The essential oil industry is an emerging industry and is still in the stage of rapid development. Due to health, environmental protection and other factors, plant essential oils extracted from natural plants and related application products are sought after by end consumers, and the market potential is large. According to the data of Puhua Industry Research Institute, from 2014 to 2020, the market size of China's plant essential oil industry increased from 2.63 billion yuan to 8.25 billion yuan, corresponding to a CAGR of 20.43%. The high growth of the industry is mainly attributed to the prevalence of outdoor travel and the rapid development of the self-pleasing economy and the olfactory economy. Outdoor travel is popular: under the background of the continuous improvement of national consumption level and the vigorous development of tourism market, outdoor play has become an important part of people's life; Rapid development of self-pleasing economy and olfactory economy: With the rapid growth of per capita disposable income of Chinese residents, the consumption demand of Chinese residents has changed from basic to high-quality, and the consumption of self-pleasing continues to rise; At the same time, under the new consumption wave of China's olfactory economy, consumers' demand for fragrance scenarios and categories is growing rapidly, and China's fragrance penetration rate is still low compared with developed countries.

 

The essential oil industry is in a rapid development stage

 

Outside the "half of the country" occupied by traditional giants, the choice of category is very important for new players, and the difficulty of entering different subdivisions is different.

 

We will also continue to focus on three types of opportunities:

 

01

Potential star track

It is represented by cosmetic contact lenses and oral cosmetology. Because there are no strong giants in these areas, and the field is small but the growth rate is fast, new players still have the possibility of small broad. The development of this field is consistent with the growth of demand for new people. Cosmetic lenses and oral beauty both have certain medical attributes, and they have certain qualification requirements both in product production and channel sales, and the entry threshold of makeup and skin care is relatively high.

 

02

Game breaking growth track

It is represented by home Qing, CS channel and small household appliances. Although there are strong head players in this field, the self-innovation rate of head players is lower than the development rate of the industry, leaving a certain development time and space for new players; For CS channel, product structure upgrade and user experience optimization are the key for new players to break the game; For small household appliances, resource scheduling and quick response ability at the supply chain end are the keys to break the situation. For Jia Qing, category innovation is the key to break the game.

 

03

Monopolize the track

It is represented by makeup, skin care and washing. For example, consumers of skin care products are well re-purchased, have relatively high loyalty, and can play a high premium, and the business matrix layout of strong players is quite mature, and the dominant position is consolidated through research and development and acquisition. The new brand needs to have the ability to break through a single product, and the comprehensive requirements are relatively high.

 

We believe that online channels for new brands to resist international brand competition to seize time dividends, live streaming and other e-commerce channels to further penetrate market demand, the new domestic goods on behalf of good goods parity logic will continue for a long time, the protection of the track promising, but also look forward to the subdivision of more excellent new brands, platforms, service providers born.