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Pharma firms step into cosmetics industry

By ZHENG YIRAN | China Daily | Updated: 2019-10-07 10:16
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Xia said that using social media to promote cosmetics sales is becoming a trend. "The way that social media convey information is suitable for makeup promotion, in that they show the difference between before and after wearing makeup. This is why we entered the cosmetics sector."

But why lipsticks?

Market insiders said that the fan-powered economy and social media-powered economy triggered the marketing strategy upgrade. The cosmetics market is becoming increasingly fragmented, and more unique and personalized brands are emerging, bringing opportunities.

And most importantly, as they noted, the lipstick economy is becoming increasingly popular. Even the prices of lipsticks from luxury brands are reasonable. For example, a Chanel lipstick only costs 300 to 400 yuan, but it is not possible to buy a Chanel purse for less than 10,000 yuan. Therefore, lipsticks have become a luxury that everyone can afford.

A survey conducted by industry consulting service website askci.com showed that 63 percent of consumers will choose lipstick when they can only pick three types of makeup. In 2017, the market volume of lip makeup reached 9.24 billion yuan, growing 29.2 percent year-on-year.

In addition, male consumers also contributed to the growth of the lipstick economy. According to the 2017 lipstick consumption report issued by Alibaba Group, 24 percent of lipstick consumption was by male consumers.

"Nevertheless, research and development into the colors of lipsticks is complicated. The current three colors cannot fully satisfy consumer demand. We need to think of how to produce distinctive colors next time. Besides, consumers' acceptance of our products remains to be tested by the market," Xia added.

Liang Jian, a professional from healthcare information provider med.sina.com, said that whether traditional drug enterprises can achieve sustainable development in crossover marketing is questionable.

"Chinese consumers, especially young ones, care about brand value when buying daily chemical products such as cosmetics. Therefore, it is not easy to get consumers to accept crossover products from a traditional pharmaceutical brand.

"After all, industrial barriers exist between drugs and daily chemical products. Even if the crossover products are popular among consumers in the first place, many of them buy the products on impulse and their enthusiasm won't last," he said.

Chen Qiaoshan, a medical analyst at Beijing-based market consultancy Analysys, said that whether traditional pharmaceutical enterprises will succeed in the cosmetics field remains to be seen.

"In terms of research and development, producing cosmetics is easier for a traditional drug company than producing drugs. If it succeeds, it can further explore its cosmetics business. If it fails, at least it caught public attention and promoted its brand image," she said.

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