Factors of various hues take gloss out of mall cosmetics

The growth of cosmetics sales in Chinese shopping malls hit their lowest level in six years, partly due to the central government's anti-corruption drive and partly due to the rise in direct overseas purchases, a market research report says.

Retail sales of cosmetics in shopping malls saw year-on-year growth of 10.1 percent in 2013, lower than the 13.2 percent recorded in 2012, and the lowest growth pace since 2008, according to the Beijing-based China National Commercial Information Center, an information service for commercial businesses.

Shop floor sales assistants agree. "It is hard to make a deal now," says Zoe Wang, a beauty adviser for SK-II who works at a large shopping mall in downtown Shanghai's Huaihai Road.

"More people come to ask for prices and to try out products, but few actually come to buy," she adds.

A skin-care set that was priced at 3,200 yuan ($510), is now being offered at a discount, Wang says. In addition, a number of good-sized samples will be offered to make the price more attractive.

"We seldom did this kind of promotion before, but now it is different," she says.

But the discounts and gifts and gifts don't seem to bring in more sales.

"I travel overseas at least two times a year," says Rebecca Rui, 31, an employee at an overseas property agency.

"The prices of cosmetics are lower abroad. I can also ask my friends to buy some for me when they travel overseas. I haven't been shopping for a long time in Shanghai."

Wang Yao, director of CNCIC, says that as the central government forges ahead with the anti-corruption campaign, buying cosmetics as gifts is becoming more rare even as sales of skin-care products have continued to grow in recent years.

More people are buying cosmetics overseas to avoid import tariffs, he says.

But analysts say the shrinking shopping mall sales are related more to rising online sales and the expansion of other channels.

"I do not think political reasons are the major factor affecting the cosmetic industry," says Ma Shuai, a researcher with China Market Monitor, a market intelligence firm based in Beijing.

"In fact, online sales of cosmetics have been going up in recent years. Door-to-door sales of companies such as Amway and beauty stores like Sephora are nibbling away at market share for traditional shopping malls."

xieyu@chinadaily.com.cn

(China Daily Africa Weekly 05/09/2014 page22)