How a Latvian bath bomb tapped into China's beauty market

2019-10-31 CGTN Editor:Mo Hong'e
Bath and shower products at store in Beijing. (CGTN Photo)

Bath and shower products at store in Beijing. (CGTN Photo)

By Xu Xiaotong

China is set to overtake the U.S. to become the world's largest beauty market this year, according to a Morgan Stanley research report. Companies around the world are trying to tap into the country's burgeoning demand for cosmetics and personal care products.

In an industry dominated by big brand names, a much smaller enterprise from Latvia is forging ahead in China, focusing on the niche section of bath and shower products. Bath bombs in particular have been trendy among young people.

Does China want bath bombs?

"Before we brought these hand-made soaps and bath balls to the Chinese market, we actually did some research. But the result was very disappointing. It suggested that the Chinese people wouldn't need them, at least not the bath balls. Because most Chinese households didn't have bath tubs and even they did, they removed it to make room for the washing machine," said Yang Gang, CEO of beauty company Stenders.

The future did not look bright for the company when they were first introduced in 2007. And yes, they were much more expensive than other cleaning products people could buy in every supermarket. However, the company was surprised to see the sales of bath and personal care items rising over the years, with bath bombs now making up 20 percent of the sales volume. A decade ago, they accounted for only five percent.

Talking about the change, Yang told CGTN that the company conducted a market research in 2017 which revealed that a total of 27 million new bathtubs were installed in China's households that year.

"Chinese people's living conditions have been greatly improved, which means more families may seek a sense of ritual in daily life and need bath products of higher qualities," said Yang.

China's economy has been developing fast over the past decades. Now with a total GDP of 13.6 trillion U.S. dollars, the country still maintains an economic growth rate of more than 6 percent. Consumption has therefore displayed new features and also continues to be the main engine of growth.

According to Liu Zhiqin, senior fellow at the Chongyang Institute for Financial Studies of Renmin University of China, Chinese consumption has gone through three different stages. The first is consumption of daily necessities, where people's incomes are limited. Then they start demanding products of higher quality. Finally, a group of consumers may desire luxury products.

"The second stage is the major force of consumption, occupying over 50 percent of the population," said Liu in an interview with CGTN.

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