Revenue in the China soap manufacturing market and washing powder & synthetic detergent manufacturing industry has been increasing at an average annualized rate of 9.6% over the past five years. In 2013, the industry is expected to grow by 3.2% to $26.2 billion.
ACMR-IBISWorld estimates that the top four industry participants – Procter & Gamble, Nice Group, Liby Group, and Unilever – jointly contribute 47.5% of total industry revenue, suggesting a moderate level of concentration. These major players have experienced much faster growth in the past few years than the industry as a whole, which has resulted in increased market share concentration. As two of the top four manufacturers are global consumer goods companies, the industry is deemed to have a high globalization level. Foreign brands are most competitive in the shampoo and washing powder product segments.
Soap best sellers on Taobao represented by P&G “Safeguard” and local Chinese brands mostly
According to the statistics, soap products are still domination on bath market in China, although, shower gel became commonly used products for Chinese consumers. The survey shows more than nearly half of people still use soap while taking a shower. Half of the people using is still mixing shower gel and soap use it at the same time.
In fact, for Chinese people soap seems more functional, is much convenient to use and to carry, especially for business trips and tourism trips. The price for soap is more affordable as well if to compare with shower gel. Taking account of the specific and regional aspects of the country’s development, the soap sector will dominate the bath market in China.
However, trends are changing these days, Chinese consumers pay more attention to additional options as protection, safety for children or elder people, moisturizing skin functions, etc.
An important criteria of people’s choice now is natural ingredients who focus on green consumption trends, the Chinese soap market is becoming more and more picky about soap ingredients. People tend to pay attention to ingredient’s origin and country of production. In addition to basic purpose as cleansing,
Chinese consumers choose soap by its color, packing, functions, and ingredients. Soap producers are competitive about adding natural ingredients like protein, aloe vera, fruit, and flower extracts to make their products more attractive for Chinese consumption.
WHY DO CHINESE PEOPLE PREFER BUYING IMPORT PRODUCTS?
As a Chinese market represented by big mass-market soap brands and Chinese local trends, foreign soap brands have a big chance to take the niche on natural, hand-made soap to target a new Chinese consumer generation taking care of the quality and natural ingredients. The daily life of Chinese people has changed because of foreign brands through the establishment of transnational corporations. The acceptance of products of foreign origin by Chinese consumers is with genuine enthusiasm and due to various reasons: better quality, good reputation, greater diversity of choice, a more attractive appearance, a feeling of liberty, new arrivals and so on.
WHO IS THE TARGET AUDIENCE?
Soap brands may define a few groups of potential consumers:
- Young parents worried about the quality who don’t trust local Chinese brands due to serials of the scandals related to the safety
- Chinese Millenials looking for a new product to try
- People who take care of the health and body and choose the products consist of natural ingredients
FOCUS ON SAFETY FOR BABIES AND TARGET CHINESE PARENTS
Almost all the brands are also focused on safety for children, as Chinese parents know, China had a serial of the scandal of baby product quality in 2008. The scandal involved milk and infant formula along with other food materials and components being adulterated with melamine. Of an estimated 300,000 victims in China, six babies died from kidney stones and other kidney damages and an estimated 54,000 babies were hospitalized.
This is the reason why Chinese parents pay so much attention to baby care products as well. They really care about the ingredients to be safe for their baby, that’s why brands use the slogan “safe for children” as one of the important quality of the products.
HOW TO TARGET CHINESE PARENTS？
To be visible in Baidu
It is not a secret, Google and other internet resources popular on the west are blocked in China, instead of Google, Chinese people use Baidu searching engine covering 68,5% of the searching market.
Developing a Chinese website on Chinese hosting and only in the Chinese language gives the opportunity to be found by potential consumers by surfing through the internet. One of the reasons why foreign sites not hosted in China have difficulty ranking on Baidu is that connections and speeds to overseas servers from Mainland China can be very unreliable due to the China Firewall.
To build up an online reputation
Chinese parents are very concerned about the quality, they spend hours surfing through the forums and Q&A forums and check all the positive and negative reviews about the baby care brands before purchasing. The most popular platforms dedicated to this topic is Q&A forums as Baidu Tieba (百度贴吧）and Baidu Zhidao (百度知道）where people feel free to share their experience about different brands for children care.
To choose the right platform for online sales
China is the world’s largest and most dynamic e-commerce market. But being successful requires understanding and embracing its unique digital landscape and consumers.
- China will overtake the US to become the world’s largest retail market in 2019, according to a new report from the market research firm eMarketer. China’s faster-than-expected retail growth is partly due to the continued explosion of e-commerce.
- eMarketer expects e-commerce to account for a stunning 35 percent of retail spending in China, which is equivalent to about US$2 trillion – over half of all e-commerce sales globally. In contrast, e-commerce in the US is projected to account for just 11 percent of retail sales.
Except for the big e-commerce platform as Tmall and JD, China has also e-commerce platform Beibei (贝贝）dedicated to mother and children products where young parents spend a huge amount of time searching for products, checking reviews and shearing the experience of each brand they bought.
HIGHLIGHT A NEW FORMULA AND SPECIAL INGREDIENTS TO TARGET CHINESE MILLENNIALS
Y generation in China is composed of 400 millions of young people. They were born between the 1980s and 1990s. This generation is five times bigger than the United States. More than 25 percent of them have a great education. Therefore, they have more opportunities comparing to the older generations. This group has a significant impact on the Chinese market. They represent a key demographic group because they constitute 1 third of the Chinese population of the country.
Generation Y is more open to a new product formula than the old generation so using the right channels can help brands to target the right audience.
Italian brand “Chante Clair” highlighted the following benefits of the products and added olive oil in soap formula:
- Safe for skin
- Deep moisturizing
- Consists of more than 72% of olive oil
HOW TO TARGET MILLENNIALS?
What is the platform to use? There are different kinds.
- For the microblogging website: you have Sina Weibo and Tencent Weibo. Sina especially is one of the most popular social media platforms in China.
- For videos broadcasting: the trendy app of the moment is Douyin. Douyin (Tik Tok) has become the world’s most downloaded non-game app in the iOS App Store, according to market research company SensorTower. Young people are crazy about it. As videos are very convenient to watch, it is also popular among Chinese consumers in general. There are many other websites and specialized in it.
The official account of “Tide” selling soap products in China on Douyin (Tik Tok)
- For forums and sharing platform: the hottest one is Little Red Book (Xiaohongshu in China), which combine e-commerce and content sharing. Young Chinese people are the most connected online and followers of the last trend. On this platform, consumers are also bloggers, they present products or places they are interested in and share reviews and advice. In this way, they are building a community.
PAY ATTENTION TO NATURAL INGREDIENTS TO TARGET FOLLOWING “HEALTHY TRENDS” CONSUMERS
China is one of the world’s fastest-growing health and wellness markets in the world backed by the government’s growing focus on healthy nutrition and a growing middle- and upper-class. Multinational companies have invested in the country’s health and wellness industry while local companies have also seen strong developments.
HOW TO TARGET FOLLOWING “HEALTHY TRENDS” CONSUMERS?
The same as in the West, people get to know about the healthy trends from social media. Following fitness and healthy lifestyle bloggers on Weibo, Little Red Book or other platforms people learn how to care for the body to be healthy.
For new brands selling soap products to collaborate with intermediaries would be a perfect solution. Intermediaries could be actors, singers, internet celebrities, in general, they are trendsetters. These idols have many fans, who support them and want to live the same life as them. If these trendsetters consume your soap products to improve their skin, fans will notice your brand and want to have it too.
Blogger 小阿昏啊 promotes Japanese soap on Little Red Book platform with almost 1 mln followers in her account
Little Red Book allows users and well-known personnel to post and share product reviews, travel blogs and lifestyle stories via short videos and photos. Xiaohongshu also operates RED Mall, which sells international products to Chinese users.
- INTRODUCE YOUR BRAND TO 500 MILLION CHINESE USERS IN DOUYIN
- THE PROBLEMS OF NEW BRANDS IN CHINA
- “TASTING THE CHINESE MARKET” SOLUTION FOR A NEW BODY AND HAIR CARE BRAND
HOW TO CHOOSE THE RIGHT PARTNER IN CHINA?
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Please contact us for more information about the Chinese market and how it can help your business.
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