Beauty Industry in China

Within 21 years, from 1983 to 2004, the sales volume of China's beauty businesses has increased 260 times, according to the country's first annual report on the beauty sector, recently released by Chinese economists.

While the traditional beauty sector in China refers mainly to such services as hairdressing, massage and face-lifts by medical means, the modern beauty sector expands to cover the areas of beauty-related education and marketing, the production and research of cosmetics and related instruments, and even includes ornaments, packaging materials as well personal image consultation.

With a 15 per cent annual growth, the beauty sector is turning into another huge money-maker after the boom in the real estate, auto, electronics and tourism sectors. Moreover, the revenue of the sector is expected to reach 176.2 billion yuan (US$21.3 billion) this year and double in the next five years.

From the perspective of cosmetics, a similar track is visible: The annual average spending of Chinese on cosmetics, in the early 1980s, was about one yuan (12 US cents), the figure rose to five yuan (60 US cents) in the early 1990s, and 25 yuan (US$3) at the end of 2000.

In big cities like Beijing and Shanghai, the annual average spending on cosmetics has reached 80-100 yuan (US$9.6-12), although still much lower than the figures for many developed countries, roughly US$35-70.

China is currently home to 1.54 million beauty parlors and nearly 3,800 cosmetic companies, and almost 8 million people are actually working in beauty-related businesses, plus another 4 million whose jobs are connected to the sector.

A survey of five major cities in China: Beijing, Shanghai, Guangzhou, Chengdu and Wuhan, shows that the most popular beauty items include SPAs, stone massages, Yoga, foot massages and nail treatments.

Despite the huge advances witnessed over the past two decades, "huge gaps still exist between China's beauty sector and its counterparts in developed countries," said the vice-president of the Beauty and Cosmetics Association of Central China's Henan Province.

"Compared with overseas beauty and cosmetics rivals, the domestic companies lack competitive advantages and are markedly overshadowed in such aspects as management, talent and brands," he said.

Statistics from the annual report show only 11.72 per cent of the practitioners have a two-year college or higher educational background, while the practitioners who have a junior middle-school or an even lower education, and those who have a senior middle-school or secondary technical school education account for 38 per cent and 50.2 per cent of the sector's workforce respectively.

Private investment accounts for 87 per cent of the sector;