When the overall economy slows down, people start buying inexpensive lipsticks or make up in order to make themselves feel good. Such a phenomenon is also known as the ‘lipstick’ affect. When they cannot afford expensive items, people are more willing to spend on small indulgences, like cosmetics.
32-year-old Fang Jinqi states that, for her, the most urgent thing is to develop a more thrifty lifestyle, due to her stagnating property agent business. Jinqi, a huge fan of Hermes bags, used to buy one every two months, but has not done so for at least six months. However, she is making up for the loss of her bags by buying cheap cosmetics like lipsticks, which she says can be easily picked up from chain stores like Sephora.
The industrial and manufacturing sectors declined in 2012, while fast-moving consumer goods and fashion brands soared. Euromonitor International, the market research firm, stated that the entire retail value of the beauty and personal care sector in China grew from 184.1 billion yuan in 2011 to 202.1 billion yuan in 2012.
Even L’Oreal Group noticed a growth in its market share, to 11.2 percent in 2012 from 10.8 percent in 2011.