Asian Beauty-Device Market On Rise, Posing Opportunity For Westerners
This article was originally published in The Rose Sheet
Executive Summary
An underpenetrated at-home skin-care device market in China, South Korea and Japan signals potential opportunity for Western firms, says research firm Kline & Company.
With 100% sales growth in China and double-digit increases in South Korea and Japan in 2012, the under-penetrated at-home skin-care device market signals opportunity for Western firms, according to research firm Kline & Company.
“The Asian market in particular is still essentially nascent, and many multinational companies are only now entering the market,” says Consumer Products Industry Manager Karen Doskow in a Feb. 13 release promoting the firm’s report, “Beauty Devices: Global Market Analysis and Opportunities.”
Penetration is still modest, with beauty device sales reaching $100 million in China last year, but “opportunity is there for U.S. marketers” as distribution opportunities increase, she told “The Rose Sheet” Feb. 21.
Only recently have brands from Radiancy, Inc. (no!no!), TRIA Beauty, Inc. and Home Skinovations’(Silk’n) begun entering Asian markets with their aesthetic devices, bringing new levels of competition to small, local firms and Asian original equipment manufacturers.
Western marketers have the potential to capture market share and leverage distribution channels that are out of reach for local firms from a cost perspective, including department stores and specialty stores such as Sephora, Doskow suggested. Local marketers cannot compete at the prestige level, as cost of entry is “just too high,” she said.
Having a brick-and-mortar presence can help newcomers compete with popular direct-sales brands offering personalized service such as Nu Skin Enterprises Inc., the top-selling beauty-device brand in China and South Korea, Doskow noted, underscoring the importance of consumer education in the device game.
In a Feb. 6 release, Nu Skin reported fiscal 2012 sales growth of 24% to $2.17 billion, driven by the firm’s business in mainland China, Japan and South Korea and “tremendous results” from its ageLOC brand.
AgeLOCGalvanic Spa is a wand-like instrument marketed for use with topical anti-aging treatments that delivers their active ingredients deep into skin via an electrical current (Also see "Nu Skin Unfazed By Allegations Of China Violations, Projects More Growth" - HBW Insight, 27 Aug, 2012.).
Nu Skin, which launched in Vietnam last year, has targeted Southeast Asia as a “tremendous opportunity” (Also see "Nu Skin Unfazed By Allegations Of China Violations, Projects More Growth" - HBW Insight, 27 Aug, 2012.).
Outside of direct sales, other important distribution channels in Asia include the internet as well as electronics stores in Japan.
Panasonic Corporation teamed withShiseido Co. to launch Ultrasonic Beauty Device Handy Mist in November 2011. Marketed with Shiseido AquaLabel Moisture Lotion, the device passes the lotion through "an ultrasonic micro vibrating mesh" to spray skin with a fine hydrating mist.
In a release, Shiseido noted that “mobile beauty devices called 'MOBA BEAU' that women can easily carry around have attracted a great deal of attention” in Japan. “The word is popular among working women in Japan and refers to mobile beauty devices such as ... mist-spraying types to retain skin moisture and non-electric-powered roller-type devices to maintain blood circulation. Small, easy-to-take-along hair dryers and hair irons are also popular items,” the firm added.
Beyond Anti-Aging
Beauty devices are on the rise in developing Asian markets, with anti-aging technologies leading the way. According to Kline, roughly half of beauty devices on those markets address anti-aging concerns.
Meanwhile, permanent hair removal is a “growth area” in South Korea, said Doskow, with no!no!, Silk’n and TRIA entering the market over the last two years to compete with Ke-Non and other regional players.
Cleansing is another burgeoning category, along with products for brightening/whitening and addressing hyperpigmentation.
Compared with Japan, where many strong regional brands are competing for a share of the $1 billion home beauty device market, “China is a little more in the formative stage where yes, Western players can come in,” said Doskow.
While Clarisonic dominates the cleansing market in the U.S., the firm has not yet entered China, where Doskow believes the brand could have a considerable impact.
L’Oreal S.A. Chairman and CEO Jean-Paul Agon has called Clarisonic “a kind of miracle” following a 61% sales increase in third quarter 2012, which helped propel growth in L’Oreal’s Luxe division.
Clarisonic systems rolled out on a limited basis in France in 2012, but “the real globalization” is planned for this year, according to Agon (Also see "Clarisonic Energizes L’Oreal Luxe Sales As Firm Eyes Global Rollout" - HBW Insight, 12 Nov, 2012.).
Clarisonic Sonic Skin Cleansing Systems range in price from $119 to $199 and “use a patented sonic frequency of more than 300 movements per second to gently, yet thoroughly remove six times more makeup and two times more dirt and oil than cleansing with your hands alone,” the brand explains on its website.
Currently, beauty devices in China tend to fall into one of two price points – devices under $50, such as Procter & Gamble’s Olay Professional Pro-X Advanced Cleansing System, and systems priced at $250 and up, such as ageLOC Galvanic and Silk’n, which sell for $325 and $299, respectively.
Western marketers should be looking at the white space in-between, Doskow suggested. “In order for a market to really grow, there needs to be more of a middle tier in terms of pricing,” she said.