Online B2C Beauty Sales to Surpass C2C in Three Years: L2 Report

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In 2013 China’s beauty market grew 13% to RMB162.5 billion ($26.4 billion), according to the report released by the National Bureau of Statistics of China.

Offline beauty sales have declined since 2007 while online retail has soared. 67% of Chinese online shoppers purchased beauty and personal care products online, averaging 32 purchases per year and spending RMB1,129 ($184), according to a Nielsen report released in September 2013, according to a report by L2 Think Tank.

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C2C accounted for 60% of the online beauty sales in 2013, but L2 estimates that B2C will surpass C2C in 2017. Tmall remains the dominant B2C platform in China, accounting for about half of market share.

We may not need to wait till 2017.  Several B2C beauty retail sites have grown pretty large. Jumei.com, founded in 2010 that had made USD483 million in total sales in 2013, has filed for a US IPO. Lefeng.com, which has a similar size in user base and revenue, was acquired by VIPShop, one of the largest online discount sale sites in China, earlier this year. Tiantian, starting as a traditional offline retailer over a decade ago and shifting to online in 2007, is regarded the third largest online beauty retailer in China. Tiantian plans to go public in two years, said Ju Chuanguo, CEO of the company in a recent interview (in Chinese).

JD.com, one of the largest online retailers and e-commerce marketplaces in China, decided to make more effort in the category of beauty products from early this year.