K-beauty staples like sheet masks, 12-step skincare routines, and creams named after various alphabet letters may be a growing US obsession, but Chinese consumers are scaling back in favor of J-beauty. More Chinese tourists opted to visit Japan over South Korea in 2017, and similarly, L2’s latest Digital IQ Index: Beauty China finds that Japanese beauty brands are seeing increased online buzz and sales at the expense of Korean brands.
In the wake of South Korea and China’s dispute over the THAAD anti-missile system and China’s subsequent ban on tour groups to the country in 2017, the number of Chinese visitors to South Korea plunged to around 4 million last year, down from 8 million the year before. In the same year, Japan saw a 15% jump in Chinese visitor numbers, which reached 7.35 million for the year.
At the same time, Chinese consumers’ obsession with all things K-beauty has given way to the growing popularity of Japanese brands. According to L2’s study, Chinese consumers showed growing interest in Japanese brands on RED, a popular Chinese app for travel shopping tips and cross-border e-commerce. Japanese brands SK-II, Dr. Ci: Labo, Fancl, DHC, Kate, and Pola received above-average growth in mentions on the app, a trend not reflected for their K-beauty counterparts.
While stalwart K-beauty brand Innisfree remains one of the top-mentioned brands on the app, it was one of the worst performers for year-over-year growth, along with fellow AmorePacific-owned brand Etude House. The Digital IQ score of AmorePacific’s overall portfolio shrank by 10% since 2016 thanks to decreased online buzz, and the conglomerate reported a year-over-year net profit decrease of 76.2% for Q4, citing the decline in Chinese tourism to South Korea.
In addition to RED, Japanese brands also perform well on Baidu. SK-II displayed the highest Baidu Index growth of all brands tracked in L2’s study and ranked in the top five on the overall Baidu Index. Shiseido’s portfolio brands including Shiseido, Clé de Peau Beauté, and Aupres all saw above-average Baidu Index growth. Shiseido stated that its sales growth was driven by Chinese tourists purchasing products while visiting Japan and then continuing to buy in China once they got hooked.
K-beauty could bounce back in China with cross-border e-commerce and domestic demand for imported products. Signs may be improving as exports of South Korean beauty products to China rose by 87% in January. Travel is still likely to be slow, however: China partly lifted the tour group ban in November, but it has not done so across the board and reports found Chinese bookings to visit Seoul for the Olympics were lackluster. Meanwhile, Chinese tourists reportedly remain undaunted by the North Korea situation so far—but if that goes downhill enough to deter them, skincare will be the least of anyone’s concerns.