A recent report by BW Confidential analyzes how Chinese consumers are changing how they shop for beauty.

According to Wang Zhuo, General Manager at Chinese chemical group Shanghai Jahwa United, consumers in China are trading up due to an increase in income and more brand awareness. Although, at the low-to-middle end of the market, consumers are buying more Chinese local brands. BB creams and liquid cleansers are two categories that have quickly penetrated the market and anti-aging is set to boom in the years to come. Moisturizers are now said to be a commodity, while the color and fragrance categories are still lukewarm.

Consumers are shifting where they shop from standalone department stores to shopping malls with catering and entertainment services (including spas and salons), but the beauty business is not necessarily benefiting. Meanwhile, online business is skyrocketing. Consumers go online to look for novelty and deep discounts (compared with what they see in retail). Chinese consumers are familiar with online purchasing, mostly through web platforms Taobao and T-Mall, which represent around 90% of e-commerce sales in China.

In brick-and-mortar retail, consumers look for familiar and friendly faces and value relationships with staff. They also compare the points they accumulate at sales counters against the discounts they can get online, so brand loyalty, if any, is fragile. With department stores running heavy promotions more frequently, consumers visit counters more often, but don’t necessarily buy more. They sometimes just come to see what is new and how much it is, and then they go online to see if they can get it at a bargain price.

Social networks, such as blogs, are used less and less, mini-blogs are still booming, and the Chinese equivalent of Twitter, Weixin, which is hot at the moment, influences what and where people buy. But for beauty products, TV and magazine ads, as well as conventional online ads, are still important.

To read BW Confidential’s full report on Chinese consumers go to: www.bwconfidential.com