CITIC Securities: Functional skin care products expected to grow 25%

Factors such as the natural environment, life pressure, and increased consumer awareness are driving strong deterministic growth of functional skincare products, with sales expected to grow at a CAGR of +25% in the next five years; the emphasis on efficacy, high R&D and marketing investment creates barriers to entry; brands with both product and marketing power will enjoy the double dividend of market expansion and share growth.　

Multi-factor-driven strong certainty of high growth.

(1) Dermatology-grade skin care products: the natural environment, inner life and inappropriate use of cosmetics have caused skin problems in 70% of the population, and the importance and consumption of these problems are increasing. Medical research co-creation, professional KOL "grass", strong brand adhesion.


(2) Strong efficacy of skin care products: efficacy demand segmentation, content marketing to help growth. According to a study by the Fashion Institute of Technology (FIT), 72% of consumers want to understand the efficacy of the ingredients, over 50% of the "ingredient party" for the high line, high-consumer crowd, the brand more to produce strong stickiness with content marketing.


(3) Medical and beauty grade skin care products: mechanical code high safety, hypoallergenic rate, application scene gradually expand, to makeup code to expand product line.


4) Skincare products containing core Chinese herbal ingredients: formula protected, unique ingredients, Chinese medicine companies to accelerate the layout.