2020 Q3 China Skincare Industry White Book

Data Insider – Inside out your China E-Business Data Insider – Inside out your China E-Business
2020 Quarter 3
China Skincare Industry White Book
(Online, E-commerce)

Data Insider – Inside out your China E-Business
2020 Q3
China Skincare Industry
White Book

CONTENTS
1. Skin Care Industry overview 2020 - Q3
• Is there a new demand for skin care due to the formation of the habit of wearing masks after the epidemic?
• The prosperity of livestreaming has accelerated the vigorous development of skin care industry
• The online data of skin care industry continued to rise with the help of short videos.
• Is there any new difference in skin care when Chinese products are popular?
• The impact of track factors on the skin care industry is subdivided
2. Skin care industry comparison and analysis 2020 - Q3
• Overview of industry market index
• Analysis of the latest data of sellers in the industry
• Portrait data of crowd attributes in the industry
• Feedback of characteristic data of category
3. Quarterly comparison and analysis data of the fastest-growing sub categories
• Cleaning
• Face wash
• Mask
4. Quarterly comparison and analysis data of the fastest-growing detailed categories
• Bath salt
• Apply on mask
• Body oil/ massage oil

A. COVID-19 impact
B. Livestreaming impact
C. Short videos impact
D. Chinese Fashion (Guo Chao) future
E. Future trend

Overview of skin care market (1/4)
• 【 COVID-19 impact 】 Although all categories of the market have been impacted to varying degrees by the once-in-a-century epidemic, and even consumer behavior and product
demand have been gradually reshaped, the COV-19 has not changed consumers' yearning for a better life. Consumers who have experienced the COV-19 still hope to improve their
quality of life and enjoy more convenient and efficient service experience through high-quality and cost-effective products. The fact that the sales volume of skin care industry increased
by 41.06% in the first quarter of 2020 shows that the COV-19 has not had a great impact on the skin care industry. Among them, the growth rate of visitors of skin care industry in the
second quarter of 2020 was 10.38%, reaching 1.98 billion, indicating that the number of visitors was close to the maximum. However, the sales growth rate was 38.77%, indicating that
there is still room for further growth.

• 【Livestreaming impact】Due to the limitation of consumers' social contact and travel during the COV-19 period, livestreaming has become an important way of communication between
major businesses and consumers. The data show that the number of users of livestreaming has reached 560 million by March 2020, of which half of them are e-commerce users. After the COV-
19, consumers will further continue their online consumption habits, and the form of livestreaming + e-commerce will become the standard configuration of enterprises' online layout as a
normal marketing mode.
• Analysis of the advertisement in Tiktok livestreaming : In the past 30 days, Estee Lauder has conducted 13 thousand and 600 livestreaming in Taobao, and Lancôme has conducted 4258
times live streaming in Kwai. SK-II, as a brand with the largest number of related livestreaming on the Tiktok platform, has carried out a total of 27 times. The related livestreaming accounts
for 60% of the total live streaming in Taobao, and 40% of the livestreaming from Kwai is from Taobao.
• Analysis of fans’ activity of Xiaohongshu & Weibo : Estee Lauder and Lancôme put in 17400 and 13700 notes in xiaohongshu, while whoo only put 1008 notes. However, whoo put 6506
posts into Weibo, accounting for 52% of the total number of microblogs, indicating that whoo focuses on advertising through microblog. In terms of the total number of comments in Weibo,
L'OREAL's was 219000, higher than that of whoo's 173000. However, whoo has 1.49 million likes, which is significantly higher than L'OREAL's 530000, which indicates that whoo has a good
feedback effect in Weibo.

• 【Short video impact】 The number of short video users reached 353 million in 2018, which is expected to reach nearly 500 million in 2019. Short video is a way of carrying three-
dimensional information. It not only has rich and diverse content and strong entertainment and publicity ability, but also can undertake the customer flow generated by selling goods through the
livestreaming, playing a role of starting up and down and completing the flow closed loop
• Estee Lauder and L'OREAL respectively accounted for 44% and 41% of the total number of advertisements put in TikTok, which are the two brands with the largest advertising intensity in
TikTok among the top ten brands. In the past 30 days, the number of related videos of Estee Lauder and L’Oréal has reached 1003 and 942 respectively, and the anchor of the related video has
at least one million fans, so that the brand has been effectively promoted.
• 【Chinese Fashion (Guo Chao) Trend】 Because the Z generation population was born in the increasingly powerful environment in China, the prosperity of the Chinese Fashion (Guo Chao)
is the inevitable result of the increase of the consumption power of the Z generation population. Meanwhile, after experiencing the COVID-19, we are more convinced that, compared with the
world, only national prosperity is really good. It can be seen from the game Black Myth WuKong and ink style animation Fog Hill of Five Elements, to HanFu and the White Rabbit, the
expanded old store that Chinese Fashion (Guo Chao) is not just a phenomenon, but a Chinese style, that is, a trend, which is the essence of Chinese Fashion (Guo Chao). Although this trend is
only in the initial stage, but 5000 years of precipitation is a reality, it will bloom when we have the ability to dig it out. The traditional Chinese brands represented by CHANDO and
PEHCHAOLIN are also developing continuously and maintaining a strong momentum, which is inseparable from their insistence on constantly creating products that are in line with the
aesthetic taste of young people, refined design and leading innovation

• 【Future Trend】As far as the COV19 situation is concerned, Ma Yun said in the China Green Companies on September 29 that the COV19 will become normal in the future, and Zhang
WenHong also pointed out in the Summit Forum on September 20 that there will be a second epidemic and the epidemic will continue for a long time. The phenomenon that the sales volume of
skin care industry increased by 41.06% in the first quarter of 2020 shows that the COV-19 has not had a great impact on the skin care industry, so the skin care industry should not be greatly
affected by the epidemic in the future.
• According to the livestreaming data, the number of livestreaming users has reached 560 million by March 2020, of which half of the users are from e-commerce. In the future, livestreaming
will become normal, but also face more severe competition, and there will be more abundant forms of livestreaming. Li Dan, as the host on June 16, led his talk show actors including Wang
Jianguo, Siwen, Hulan, Zhang Boyang, and Hu Doudou to participate in the livestreaming of Weimob Retail Shopping Festival. Because of the strong eloquence of the talk show artists
themselves, they make the selling process more like a show, that is, talk show, which not only promotes the sales growth of businesses, but also enables consumers to obtain a better shopping
experience. It can be seen from TikTok's banning third parties from being able to link to the shops in TikTok and Taobao's change of super recommendation to short video that the market will
be cut off, and the market will be more subdivided in the future, which also means that the anchor of livestreaming will also be classified and subdivided.
• The rise of Chinese Fashion (Guo Chao) is actually a metaphor of cultural confidence. This Chinese style will gradually affect foreign brands, adding Chinese Fashion (Guo Chao) elements to
their products, so that the market of Chinese Fashion (Guo Chao) products is also growing.

A-1 COV-19 impact- GMV and number of visitors ( year 2018 – 2020 )
1月 2月 3月 4月 5月 6月
GMV and visitors
2018年交易金额 2019年交易金额 2020年交易金额
2018年访客数 2019年访客数 2020年访客数
QOQ - Sales & visitors growth rate (Q1 / Q2)
Year Q1 growth rate of sales Q2 growth rate of sales
Q1 growth rate of
visitors
Q2 growth rate of
visitors
2019 45.89% 59.80% 28.58% 55.08%
2020 41.06% 38.77% 25.27% 10.38%
• Sales in the first half of 2019 were 53.7% higher than those in the
first half of 2018, while those in the first half of 2020 were 39.7%
higher than those in the first half of 2019
• The number of visitors in the first half of 2019 is 42.5% higher than
that in the first half of 2018, while the number of visitors in the first
half of 2020 is 16.8% higher than that in the first half of 2019
• At present, skin care products are in the rising stage. Although the
growth rate is gradually slowing down, there is still room for
improvement
• In the first quarter of 2020, sales increased by 41.06% year on year. In
terms of the growth rate of sales, the COV-19 did not have a
significant impact on the skin care industry. However, in terms of the
number of visitors, the growth rate of visitors in the second quarter of
2020 was 10.38%, and the number of visitors reached 1.98 billion. It
can be seen that the growth rate has slowed down obviously, which is
mainly due to the following two reasons
• 1.The number of visitors to the skin care industry is about to reach its
maximum
• 2.Affected by the COV-19, consumers shift their focus of
consumption to daily necessities such as life, health and safety, so that
the overall number of visitors presents a downward trend.
2018 GMV 2019 GMV
2020 visitors2019 visitors2018 visitors
2020 GMV
January February March April May June

B – Era of Live streaming
DATA INSIDER CONSULTING
解数用数据洞悉电商

B-1E-commerceLivestreamingTimeline
2016 2017 2018 2019
2016 March Test Run
2016 starts e-commerce and
livestreaming
Taobao Livestreaming
MOGUJIE
2017 July，SUNING APP
officially launched livestreaming
2017 ground open, by selling
products on livestreaming
SUNING
Kwai
2018 Dec, TIKTOK shopping cart
function launched
2018 march, Amazon starts
livestreaming program
Tiktok
Amazon
2019 December Tencent launched
“Gravitational wave” plan
2019 November, Pinduoduo starts
selling products by livestreaming
Tencent
Pinduoduo
2018 August JD Fashion stars selling
products on livestreaming
JD
2019 December，Xiaohongshu e-
commerce livestreaming launched
Xiaohongshu
• Taobao and Mogujie took the lead in using livestreaming in 2016, and e-commerce livestreaming was in the storage stage in the following two years. Although there were also platforms
to increase the e-commerce livestreaming function, they were still in the trial stage and did not achieve obvious results.
• In 2017, the livestreaming function was officially launched in Suning APP, and the mode of livestreaming + selling was also opened on Kwai.
• Amazon started experimenting with livestreaming services in 2018, and the shopping cart function of TikTok was officially opened in December of the same year.
• In 2019, the e-commerce livestreaming has entered the outbreak stage, which was carried out in many platforms such as TikTok, Kwai, Xiao Xiaohongshu, and so on.
• Since the outbreak of the COV-19 in 2020, the offline economy has been greatly affected. The new media of CCTV News launched a large-scale public welfare activity "Thank You for
Bidding for Hubei" on April 1 to promote economic recovery. In this livestreaming, a total of 40.14 million yuan worth of Hubei goods were sold.
• After the epidemic, consumers will further continue their online consumption habits, and the form of livestreaming + e-commerce will become the standard configuration of enterprises' online layout as a
normal marketing mode. According to the data of the "talent report on livestreaming sales in the first half of 2020" released by the boss direct employment official on June 22, 2020, the demand for talents in
the main positions of the "livestreaming sales" format in the first half of 2020 has reached 3.6 times of the same period in 2019, the number of job seekers flooding into the industry has reached 2.4 times of
that in the same period of last year, and the demand of anchor with goods has increased more than 10 times compared with the same period of last year.

B-2 The Scale of Livestreaming Users
The scale of livestreaming users
2016年12月 2017年12月 2018年12月 2019年6月 2020年3月
340million
430million
400million
430million
560million
E-commerce livestreaming users
256million,46%
Source： CNNIC《中国互联网络发展状况统计报告》
• As consumers' social contact and travel are limited during the epidemic period, livestreaming has become an important way for major
businesses to rebuild communication with consumers. According to the data, the number of livestreaming users has reached 560 million by
March 2020, half of which come from e-commerce.
June, 2017 June, 2019Dec, 2018Dec, 2016 March, 2020

B-3 Impact of livestreaming-CCTV stars to selling products by livestreaming
Traditional
e-commerce
Webcam
e-commerce
信息
Over-
beautification of
products
Product
information is not
comprehensive
Brand
endorsement
Interactive weak
Real products
Guide to shopping
Anchor and brand
endorsement
Interactive strong
Information
experience
Reliance
Social
The new media of CCTV News launched a large-scale public welfare activity "Thank You for Bidding for Hubei" on April
1. Because it was during the epidemic period at that time, in order to reduce the crowd gathering, the livestreaming was
carried out by Zhu Guangquan of the anchor of the news channel of CCTV News and Li Jiaqi of the anchor of Taobao
through video. The live broadcast lasted about two hours. More than 10 million netizens watched the livestreaming online,
with more than 120 million people watching, and selling Hubei goods worth about 40.14 million yuan. At that time, many
products were quickly robbed by netizens. The logic behind the sales of 40 million yuan is the display of live products. Li
Jiaqi, professional seller + Zhu Guangquan, CCTV host = guided shopping + anchor + brand endorsement. At the same time,
their excellent eloquence added interest to the livestreaming, so that the sales of the first live broadcast exceeded 40 million
yuan

B-5 Skincare brand-Impact of livestreaming-post analyze
3,726
4,418
6,520
6,941
8,009
8,020
8,192
12,500
12,500
13,600
百雀羚
玉兰油
雪花秀
海蓝之谜
SK-II
whoo/后
科颜氏
兰蔻
欧莱雅
雅诗兰黛
• In August, Estee Lauder hosted 13 thousand and 600 live streaming in Taobao, and Lancôme made 4258 live
streaming in Kwai. The proportion of related livestreaming is 60% of Taobao and 40% of Kwai. Taobao is the
main platform for businesses to lunch the livestreaming, followed by Kwai. On July 27, Estee Lauder launched
four live broadcasts on Taobao. Before the livestreaming, the sales volume was 8.61 million and the number of
visitors was 1.25 million. After the livestreaming, the sales volume increased by 2.13 times to 27 million, and the
number of visitors increased by 0.7 times to 2.13 million.
Estee Lauder before and after livestreaming transaction amount/amount of visitors comparison on
July 2rd
Brands in Taobao /August
Estee lauder date Transaction Amount Number of visitors
Before livestreaming July 27th 2020 8,611,584 1,254,165
After livestreaming July 28th 2020 27,008,500 2,135,716
8.61m
27.00m
10.03m
1.25m
2.13m
1.14m
2020年7月27日 2020年7月28日 2020年7月29日
交易金额访客人数
113
308
463
917
1,702
2,882
2,930
3,039
3,644
4,258
玉兰油
海蓝之谜
SK-II
科颜氏
whoo/后
欧莱雅
百雀羚
雪花秀
雅诗兰黛
兰蔻
July 27th 2020 July 28th 2020 July 29th 2020
GMV Visitors
Estee Lauder
L’Oréal
Lancôme
Kiehl's
Whoo
SK-II
La Mer
Sulwhasoo
Olay
Pechoin
Lancôme
Estee Lauder
Sulwhasoo
Pechoin
L’Oréal
whoo
Kiehl’s
SK-II
La Mer
Olay

B-6 Skincare-impact of livestreaming-launch analysis
• According to the official announcement of TikTok, the goods from third parties since October 9th are no longer
supported to enter the shopping cart in the livestreaming room.
• Therefore, the main businesses in Taobao reduced the number of livestreaming in Weibo, such as Estee Lauder launched 13
thousand and 600 livestreaming in Taobao, and did not carry out livestreaming in the TikTok.
Shopping cart adjustment in Tiktok
Evacuation of major skin care brands in Taobao
Brands in Tiktok / August
0
1
4
10
12
12
13
17
26
27
雅诗兰黛
海蓝之谜
百雀羚
欧莱雅
兰蔻
玉兰油
雪花秀
whoo/后
科颜氏
SK-IISK-II
Kiehl's
whoo
Sulwhasoo
Olay
Lancôme
L’Oréal
Pechoin
La Mer
Estee Lauder

B-7 Impact of livestreaming-Talk show actor join the livestreaming
• 。
• Dan Li, as the host on June 16, led his talk show actors including Jianguo wang, Siwen, Hulan, Boyang zhang, and Doudou hu to participate in the
livestreaming of Weimob Retail Shopping Festival.
• Taoyong sun, chairman and CEO of Weimob, also performed his first talk show.
• Xing Jing made her first livestreaming on September 16.
• With the participation of Dan Li and others, this 616 Weimob livestreaming sales conference has achieved excellent results, with more than 3.6
million viewers and more than 100 million GMV.
• At the same time, the Weimob Retail Shopping Festival participated by 100 brands reached 713 million GMV in six days.
Because of the strong eloquence of the talk show artists themselves, they make the selling process more like a show, that is, talk show, which not
only promotes the sales growth of businesses, but also enables consumers to obtain a better shopping experience.

Short videos Era
• In the short video era, network video is the second
largest Internet application in China after instant
messaging. As a new force of network video, short
video is the most important way of entertainment
video leisure in China.

C-1 Online short video users
2018年6月 2018年12月 2019年6月 2020年3月 2020年6月
595 million
647.9 million 647.9 million
773 million
817 million
Source： CNNIC《中国互联网络发展状况统计报告》
• In terms of the size of network short video users, the number of short video users shrank slightly from
December 2018 to June 2019, and increased by 126 million from June 2019 to March 2020, with a total amount
of 773 million. Data shows that the number of short video users has increased by 26.2% year-on-year by June
2020, and the total number of users has reached 817 million, accounting for 87% of the total number of Internet
users.
The scale of short videos users in China
June, 2018 Dec, 2018 June, 2019 June, 2020March, 2020

C-2 SHORT VIDEOS-CATEGORY
KOL STAR FUN TESTING LOVE PET
Live Streaming Short Videos

21

D-1 Chinese products trends
Because the Z generation population was born
in the increasingly powerful environment in
China, the prosperity of the Chinese Fashion
(Guo Chao) is the inevitable result of the
increase of the consumption power of the Z
generation population. Meanwhile, after
experiencing the COVID-19, we are more
convinced that, compared with the world,
only national prosperity is really good. It can
be seen from the game Black Myth WuKong
and ink style animation Fog Hill of Five
Elements, to HanFu and the White Rabbit, the
expanded old store that Chinese Fashion (Guo
Chao) is not just a phenomenon, but a
Chinese style, that is, a trend, which is the
essence of Chinese Fashion (Guo Chao).
Although this trend is only in the initial stage,
but 5000 years of precipitation is a reality, it
will bloom when we have the ability to dig it
out.

D-2 Chinese Fashion (Guo Chao) trends- products and visual packaging
• The traditional Chinese brands
represented by CHANDO and
PEHCHAOLIN are also
developing continuously and
maintaining a strong momentum,
which is inseparable from their
insistence on constantly creating
products that are in line with the
aesthetic taste of young people,
refined design and leading
innovation.

D-5 Chinese products trends
Flower、jade、mountain、water、Chinese ink、
architecture，all of those are traditional Chinese art
elements，Florasis’products not only integrate the
ancient style, but also employ JingYi Ju and Juan Du as
its spokesmen, which is conducive to enhance the
influence of its brand

Skincare Industry Data
Analysis
THE MASS MARKET
INDUSTRY COMPETITION OVERVIEW
TOP MARCHANT PRICE ANALYSIS

Skincare market transaction and visitors amount
GMV and visitors(year-on-year)（2019 Q3, 2020 Q3）
Quarter visitors
Visitors
increase/decrease
GMV
GMV
increase/decrease
2019Q3 175.2m / 2986.5m /
2020Q3 239.9m 36.92% 3567.4m 19.45%
GMV and visitors (quarter-to-quarter)（2020 Q2, 2020 Q3）
Quarter visitors
Visitors
increase/decrease
GMV
GMV
increase/decrease
2020Q2 286.6m / 4537.4m /
2020Q3 239.9m -16.30% 3567.4m -21.38%
2019年Q3 2020年Q3
2019/2020 Q3 YoY of GMV & Visitors
交易金额访客数
2020年Q2 2020年Q3
2020 Q2/Q3 QoQ of GMV & Visitors
GMV Visitors
GMV Visitors
2019 Q2 2020 Q3
2019 Q3 2020 Q3

Skincare-Market- GMV and number of visitors（July-September 2020）
5.00亿
5.20亿
5.40亿
5.60亿
5.80亿
6.00亿
6.20亿
6.40亿
6.60亿
0.00亿
20.00亿
40.00亿
60.00亿
80.00亿
100.00亿
120.00亿
140.00亿
2020年7月 2020年8月 2020年9月
GMV and number of visitors
GMV Visitors
July, 2020 Aug. , 2020 Sept., 2020
140 Billion
120 Billion
100 Billion
80 Billion
60 Billion
40 Billion
20 Billion
0
660 Million
640 Million
620 Million
600 Million
580 Million
560 Million
540 Million
0
520 Million
500 Million

Skincare market-conclusion
• In terms of the market, the number of visitors in Q3 in 2020 (2.399 billion) increased by 36.92% compared with the same period in 2019 (1.752
billion). The trading amount (29.865 billion) in Q3 in 2020 is 19.45% higher than that of the same period in 2019 (35.674 billion). Overall, the
market demand for skin care is still expanding. Moreover, from the growth point of view, the market scale of skin care products also has some
room for improvement.
• The number of visitors in Q3 in 2020 (2.399 billion) increased by - 16.3% compared with that in Q2 in 2020 (2.866 billion). The transaction
amount in Q3 in 2020 (35.674 billion) increased by - 21.38% compared with that in Q2 in 2020 (45.374 billion). Although the performance in Q3
is not as good as that in Q2, the overall performance does not show great fluctuations. After the end of the epidemic, there was a 618 promotion,
which made the consumers who did not consume during the epidemic period to make retaliatory consumption during the promotion period, thus
ushering in a wave of sales in June, boosting the overall sales of Q2.
• The number of visitors in Q3 in 2020 (2.399 billion) increased by - 16.3% compared with that in Q2 in 2020 (2.866 billion). The transaction
amount in Q3 in 2020 (35.674 billion) increased by - 21.38% compared with that in Q2 in 2020 (45.374 billion). Although the performance in Q3
is not as good as that in Q2, the overall performance does not show great fluctuations. After the end of the epidemic, there was a 618 promotion,
which made the consumers who did not consume during the epidemic period to make retaliatory consumption during the promotion period, thus
ushering in a wave of sales in June, boosting the overall sales of Q2.

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2020 Q3 China Skincare Industry White Book

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2020 Q3 China Skincare Industry White Book