How spending is trending for Millennials in beauty
Despite slowdown in growth across the global FMCG market, there are still some categories that are going strong, such as personal care in Asia, which is still enjoying an annual growth of over 5%, far outperforming its Western peers. Beauty care is amongst the best performing categories, an indication that Asian consumers have higher devotion for beauty care, and hence stronger demand for personal care items, especially the Millenial group, who are young and not afraid to spend on themselves, and is quickly becoming a spending force to be reckoned with.
Technology is reshaping spending habits, visual sharing determines willingness to spend
Taking a deep look into the spending pattern of the Milliennials, the influence of modern technology is apparent. Kantar Worldpanel observed that in the Asia market, the booming social network combined with Millenials’ fast learning, willing-to-share lifestyle, is clearly affecting how consumers make their purchase decision; ‘a reason to buy’ is no longer sufficient, but rather ‘a reason to share’ is the key to their wallet. Millennials’ sharing nature, and aided by the Internet, is also affecting how the new generation choose to select skincare product, type and function. Such as Hydration products which enjoyed a healthy 7% growth compared to two years ago, thanks to the spreading of new skincare concepts including ‘proper hydration is the first step to brighten your skin’ or ‘do not ignore the importance of hydration care post skin laser treatment’, which in turn lead to booming sales of related products.
Furthermore, the desire to gain attention via online sharing, means that when Millennials select their beauty care products, function is no longer the only consideration, but also will the product allow them to create fun, eye-catching content that they can wow their audience on Facebook, Instagram or Twitter. Amid this trend, the product’s package, texture and color design have become vital in deciding whether this product gets purchased or not. For example, the skincare essence, one will take into consideration its texture, whether it be liquid, gel to oil texture, how it absorbs into the skin, and the before-after effect; for cushion foundation, we will begin with the outer package design, to the inner product color, pattern, and eventually the result of how your skin looks after application; lipstick colors, is it velvet, metallic or matte etc. All these, after sharing experiences online, are factors that will influence consumer’s willingness to purchase.
The great generation shift, Millennials spending outgrow baby boom consumers
The Millennial purchase behavior is also reshaping Taiwan’s beauty care market. According to Kantar Worldpanel’s research, for 2017 Q2, the annual sales of the market had grown 6% compared to the previous year, and the major contributor had also shifted from the baby boom generation to the Millennials, where the spending of age 15-34 had increased by 14%, and makeup sector achieved more than 20% growth. Data has shown that the Millennials’ growth far outweigh the performance of those age 35 and above, and not only is their contribution to the total market is higher than ever, they are now also more receptive to higher pricing brands. Take the sales performance of the 2016 department anniversary sales, Kantar Worldpanel discovered that age 15-34’s contribution for counter brands had increased by 5 percentile, this growth is even more apparent for the more affordable makeup sector, in which the young generation’s contribution for lipstick, gloss and stain reached a impressive 46%.
Furthermore, young consumer’s adventurous nature is also reflected in their brand choice and average items purchased: 15-34 year-olds will purchase an average of 8.7 beauty care brands per year, whereas 55 and above will only make their choices between 5.4 brands. Even for the same product types (ie. toner, essence, cream etc.), their average purchase number is also growing, this goes back to what has been said in previous paragraph, that these young consumers are now more sophisticated with their multiple product function consideration, aided by the fast spread of online information, they will cross use different product or texture to match the suitable occasion (ie. day or night, work or leisure, sport or date etc.). These are all important indications that single brand or product functions is no longer sufficient in meeting the needs of the Millennial consumers, who are deeply influenced by what is said and shared on the social media, and that is something to be kept in mind when trying to communicate with the Millennial generation.