In China, a raft of domestic startups selling male skincare products is tapping global investors for funds, with ambitions to rival giants like L’Oreal in a billion-dollar business serving image-conscious millennial men.
The startups are targeting men like Hou Junru, a 24-year-old Shanghai education worker who got into skincare as a student and splurged more than $1,000 on creams and lotions in e-commerce firm Alibaba’s giant November 11 Singles Day promotion. “My need is to keep the skin moist and look pale,” Hou said.
It is a priority shared by many of his peers, influenced by the spread of social media and South Korean pop culture that embraces a softer version of masculinity. Already the biggest in the world, the Chinese men’s facial skincare market is forecast to hit 12.5bn yuan ($1.9bn) this year, and expand 50 percent to 18.5bn yuan ($2.8bn) in 2025, research firm Mintel estimates.
Market research provider Euromonitor International says the men’s skincare business in China, excluding post-shave products, was last year already more than three times the size of the US market in dollar terms and more than twice the size of South Korea, and is expected to easily outstrip growth in terms of value than both until 2024.
Drawing on the huge reach of online retailers like Alibaba and JD.com, at least 10 new Chinese male skincare brands have been set up this year, according to media reports.
“A great number of small brands are emerging through online channels,” Mintel said in a recent report. The “online shopping experience enables men to choose what they want quickly … online retailers can make it easier for men to seek out information and tips than in offline stores”.
Six of the new players raised more than 300m yuan ($45.8m) between them, the founder of one brand told Reuters news agency. Bertelsmann Asia Investments said it has invested in a new Shanghai brand, without saying how much, while others like SIG Asia and Redpoint Ventures have also placed sector bets, according to domestic media reports and startup research database CB Insights.
For now, the China market is dominated by three big foreign players – France’s L’Oreal, Nivea maker Beiersdorf of Germany, and Japan’s Rohto, home of the OXY brand. Together they have a combined share of 60 percent, according to Mintel. L’Oreal declined to comment for this article, while Beiersdorf and Rohto did not immediately respond to requests for comment.
Beyond that dominance, however, there is a hefty, fragmented chunk to be targeted by new, local startups, hoping to emulate the success of Perfect Diary, a red-hot Chinese women’s cosmetics brand whose parent raised $617m in a Nasdaq listing last month.
In China, the men’s skincare market (excluding post-shave products) is bigger than the US and South Korea in dollar terms. [File: Aly Song/Reuters]
Among the new breed of male skincare firms is Coen, founded in September by Huang Kai, a Xiamen-based entrepreneur who closed his previous business selling men’s clothing to focus on beauty, with goods manufactured by firms in Guangzhou.
Huang, 31, said sales at Coen – a name that translates to “scientific and grateful” – topped 1 million yuan ($152,761) in two months via stores on e-commerce platforms. A 120ml bottle of its flagship cleanser, Dragon Blood, retails for 64.90 yuan ($9.90) on Alibaba’s Tmall.
Huang, who has products like a beard depilatory cream in the pipeline, said with more than 200 million men born in China after 1995, there was a huge opportunity to tap new generations who are more open to skincare. According to him, a half-dozen of this year’s bevy of startups have together already raised more than 300m yuan ($45.8m), adding that he, too, was in talks to raise funds from investors. He declined to reveal which ones.
Bertelmann Asia Investments Vice President Cindy Zhu told Reuters her firm has invested in Shanghai-based men’s skincare company Just a Cool Brand (JACB), set up this year. Zhu said the fund believed the growth momentum in China’s cosmetics market would continue.
“JACB will provide more professional products that may appropriately meet the skincare requirements of Chinese men consumers,” Zhu said. JACB could not be reached for comment.
Similarly, Redpoint Ventures and SIG Asia have invested in Make Essense, based in Shenzhen, according to the CB Insights database. Make Essense, SIG and Redpoint did not respond to Reuters’ enquiries.
One major hurdle for the new breed of Chinese suppliers will be persuading customers who are regular users of well-known foreign brands to switch to domestic manufacturers.
Education worker Hou, for instance, says he prefers brands like France’s Guerlain and La Mer instead of the new domestic ones. “These products are used on your face so I don’t want to try brands I haven’t heard of,” he said.
But others remain open to the possibility. University student Liu Yuxuan, 22, typically uses Clinique and Estee Lauder but would consider domestic brands that offer value for money. “Chinese brands are more down-to-earth,” Liu said.
One avenue of possibility for domestic brands could be to expand into colour cosmetics like eye shadow, still a niche but growing segment, according to JD.com and Alibaba numbers.
“Most men’s products are boring,” said Hou.
“Why won’t brands give us men more innovative products? Like women, I also need skincare to maintain moisture and look white. I will buy if they are good!”