2022 Trends in the Skin Lightening Industry in China

Source:iResearchNovember 10,20226:13 PM Overview

Demand features: The main consumers of skin lightening essence products are highly educated, young and middle-aged people. Skin lightening demand is becoming more generalized, refined and scenario-based. Chinese consumers attach the most importance to safe, mild and natural ingredients when choosing skin lightening essence products. Meanwhile, they prefer and are more satisfied with natural plant extracts.

Industry size: In recent years, the lightening essence segment has been expanding thanks to the popularity of functional skin care concepts. The covid-19 pandemic has hindered the development of the industry in the short term. However, as consumption is picking up and supply is growing, the medium and long-term development of the industry remains promising. The industry size reached 28.51 billion yuan in 2021 and it is expected to grow at a CAGR of 12.7% in the next three years.

Development trends: 1) Demand side: Skin lightening is becoming a daily demand of Chinese people. Chinese consumers have high expectations for skin-lightening essence products that contain mild and efficient plant extract ingredients. As domestic brands gain more and more trust from Chinese people, Chinese skin-lightening essence products with natural plant extracts have a bright future. 2) Supply side: With the advantages of experience and technical accumulation, the domestic head brands will develop more skin-lightening essence products that meet the needs of Chinese people for targeted skin lightening. Plant extract and Chinese herbal medicine are the two main types of popular raw materials and they will be more and more commonly used in skin lightening essence products. Oriental herbal ingredients will become a highlight of skin lightening essence products by both Chinese and international brands.

Analysis of the Status Quo of China's Skin
Lightening Industry

Growth rate of the facial skin care industry in China is stabilizing. The industry size reached 258.7 billion yuan in 2021. The rising penetration of facial skin care shows that the industry is steadily growing. It also shows that the demand for facial skin care has been high among skin care segments. In recent years, with the upgrade of skin care concept, consumers are attaching increasing importance to functional effects. Besides basic functions such as cleasing and hydrating, the core consumers have obviously paid more attention to advanced functions。 iResearch's user survey data show that skin lightening is the most concerned function by consumers.

Analysis of the Status Quo of China's SkinLightening Industry

Studies show that most Chinese people’s skin types are between II and IV. Such skin has rich melanosomes and is easily tanned, resulting in higher demand for skin lightening than sunburn repair. Taking trans epidermal water loss, skin barrier function and stratum corneum maturity into consideration, Asian people have more sensitive and more fragile skin than Europeans. Therefore, mild and efficient skin lightening products can better meet Chinese consumers’ demand for skin lightening.

Analysis of the Status Quo of China's SkinLightening Industry

Essence is an effective facial skin care product containing rich active ingredients. Based on different ingredients, essence products usually have functions such as skin lightening, hydrating or anti-aging. As consumers attach increasing attention to the ingredients and functions of skin care products, essence products gradually become the primary choice to achieve a specific effect. In the skin lightening segment, iResearch user survey data show that over 70% of Chinese consumers attach the most importance to efficiency when it comes to skin lightening. Skin lightening essence is regarded as the most efficient type by 57.8% of consumers. iResearch thinks that, as the consumers' skin lightening content becomes increasingly mature, the user awareness and penetration of skin lightening essence will further increase.

Analysis of the Current Situation of Skin Lightening Industry in China 

Chinese skin lightening products have transitioned from the early extensive development stage, when strong methods such as covering and exfoliation were used, to the scientific and refined synergistic skin lightening stage. The trend of refined skin lightening not only promotes the development of effective skin lightening ingredients on the raw material side but also promotes the development of products with strong performance. As the product with the highest technical and R&D threshold, essence is generally regarded by the industry as the core product for enhancing user stickiness and forming brand barriers. Combining function and ingredients to make a high-performance skin-lightening essence product, and carrying out multi-category expansion around it will be an important strategy to form a differentiated advantage in the future.

Analysis of the Status Quo of China's SkinLightening Industry

The new Regulation on the Supervision and Administration of Cosmetics was officially implemented on January 1, 2021. It emphasizes the certification standards for skin lightening products and sets the registration review mechanism for new skin lightening raw materials. On January 1, 2022, the "Cosmetics Efficacy Claim Evaluation Standards" came into force. Product R&D and efficacy promotion system are stricter in the skin lightening segment. In this context, the skin lightening product market will probably further consolidate the foundation of compliant operation, promoting healthy and high-quality development of the industry.

China’s Lightening Essence Industry Map 

Industry Map

China’s Skin Lightening Essence Industry Chain and Profit Division 

Raw materials of skin lightening essence are dominated by large international companies and most of them are all-around chemical companies. The Chinese manufacturers mainly focus on mass cosmetic producers in China, and so do the foundries. International giants have a bigger voice in the skin lightening essence segment and even the cosmetics OEM area. Most Chinese foundries are in Guangzhou and serve emerging brands. Brand owners are in the core link of the entire chain. Mature brands can increase their profits by self-built capacity. As the threshold of the skin lightening essence becomes higher, the head skin lightening essence brands that integrate production, research, and sales will have greater advantages in sales and profits. From the perspective of channels, online channels are dominating. Layout in e-commerce livestreaming and other rapidly developing channels can help brands seize their consumers and gain more market shares.

Competitive Landscape of China’s Skin-lightening Essence Industry

The head players in China's skin lightening essence market are mainly famous international brands such as Olay, Shiseido and SkinCeuticals, and domestic brands represented by OSM and Guyu. In the segment of common skin lightening essence, domestic brands' layout and competitiveness have gradually become comparable to international open-shelf brands and cosmeceutical brands. However, in the segment of high-end skin lightening essence, the head players are still mostly international brands and other high-end brands. As domestic brands' strategies upgrade from early marketing-driven to product and brand-driven, iResearch believes that with innovation breakthroughs in R&D and other core links, Chinese domestic brands might gain a corresponding voice in the segment of high-end essence.

Market Size of the Lightening Essence Industry in China

Upgrade of skin care and rise of domestic brands promote industry expansion.

With the upgrading of functional skin care products, the skin lightening essence segment has been expanding. The join of Chinese domestic brands further promotes the increase of industry space. According to iResearch, in 2021 the size of China’s skin-lightening essence industry reached 28.51 billion yuan. The lockdowns in some cities in the first half of 2022 had a short-term negative impact on the skin-lightening essence industry. However, thanks to the overall consumption recovery in the second half and the promotion activities at the end of the year, the overall data in 2022 will probably maintain stability.  With increased demand and supply, the growth rate of the skin lightening essence industry will continue to be higher than other categories and the skin care industry. The industry size is expected to exceed 35 billion yuan in 2024.

Insights into Skin Lightening Essence Consumers in China 

Young and middle-aged people are the main skin lightening essence consumers in China. People aged between 18 and 25 accounts for the highest proportion. As to education background, over 90% of consumers have an undergraduate degree or above. Thanks to high education degrees, these people have higher spending power and more refined skin care concepts and are the main consumers of skin lightening essence products. From the perspective of skin types, the share of people who have oily sensitive skin or combination sensitive skin is rising, which puts forward higher requirements for the safety and functional effectiveness of the ingredients.

Insights into Skin Lightening Essence Consumers in China 

More diversified and convenient consumption environment and aesthetic changes jointly boost the consumption of skin-lightening essence

Survey data show that the spending power of Chinese consumers is positively correlated with the price of skin-lightening essence. The sustainability of consumption upgrade will provide a favorable environment for the demand upgrade of the skin-lightening essence market. Contemporary consumers' awareness of beauty and skincare is increasing, and their aesthetic concepts are constantly changing; Meanwhile, skin lightening products are increasingly cost-effective and more and more suitable for Chinese skin types. What's more, the purchase channels are more diverse and convenient. The demand side and the supply side jointly boost the consumption of skin-lightening essence.

Insights into Skin Lightening Essence Consumers in China

Bad habits and the external environment are main triggers for many skin problems

Survey data show that the main skin problems bothering Chinese lightening essence consumers include dull skin, uneven skin tone, and so on. 76.9% of consumers are worried about dull skin. There are many reasons for skin problems. Besides objective factors such as environmental pollution and genes, 60% of the skin-lightening product consumers have disordered work and rest and irregular diet. Nearly half of consumers believe that excessive radiation from electronic products and endocrine dyscrasia are also major causes of skin problems.

Insights into Skin Lightening Essence Consumers in China 

Skin-lightening essence consumption is becoming rational. Consumers prefer safe and effective products that contain ingredients like plant extracts and vitamin C.

With the rapid development of the functional skincare market, consumers' demand for skin lightening has been released. The new generation of skin lightening essence consumers pays attention to experience and lightening effect. Mild experience, natural ingredients and targets are the Top 3 factors influencing consumers' purchase decisions. In terms of product ingredients, derivatives such as plant extracts and vitamin C are the most popular. More than 70% of consumers believe that these ingredients are safe and have a prominent lightening effect.

Insights into Skin Lightening Essence Consumers in China 

The normal skin lightening demand accounts for as high as 74.6% in daily scenarios. iResearch believes that this is mainly due to the maturity and deepening of the skin-lightening concept on the consumer side. Demand characteristics such as stability maintenance and anti-photosensitivity are prominent in such scenarios.  First-aid skin lightening demand mainly appears after staying up late, sun exposure and other scenarios that cause concentrated damage to the skin and the lightening demand driven by safe repair and irritation reduction are more concentrated. Scenarios after freckle removal, acne scar removal and plastic surgery mainly have periodic repair demand. Compared with the other two types of scenarios, more emphasis is placed on targeted demand in the repairing scenarios. In addition, demand for high efficiency will also lead to an increase in dosage.

Insights into Skin Lightening Essence Consumers in China 

Consumers clearly prefer products with natural plant extract

User survey data show consumers’ obvious preference for natural plant extract ingredients when choosing skin-lightening essence products. The users are also more satisfied with the natural plant extract essence. Natural plant extract ingredients are the key influencing factor for more than 80% of consumers to purchase skin-lightening essence. Therefore, natural ingredients such as Glabridin, arbutin and salidroside can better meet Chinese consumers' skin lightening demand.

Insights into Skin Lightening Essence Consumers in China 

Skin feel/smell, ingredient irritation and performance are the three common indicators of consumers' satisfaction with skin-lightening essence with natural and non-natural plant extracts. Significant effect and high reliability are the top two reasons why consumers are satisfied with non-natural plant extract lightening essence, thanks to the fact that most classic synthetic whitening ingredients are already known by consumers. Consumers of natural plant extract lightening essence are satisfied with the mild ingredients and high safety. The efficacy of skin lightening essence with plant extract has been confirmed on the consumer side. It has the same consumer satisfaction degree with skin feel. To further increase satisfaction degree and continuously increase promoter value, skin lightening essence with plant extracts will need to improve the effectiveness of the formula centering on its comparative advantages of safety and mild ingredients.

Production Technology and Trends of Skin Lightening Essence Ingredients in China  

Production technologies of functional raw materials including those for skin lightening essence can be divided into four categories: plant extraction, chemical synthesis, microbial fermentation and synthetic biology. Modern plant extraction and microbial fermentation are mainstream production technologies. Thanks to rich local natural resources, modern plant extraction technology can further develop new raw materials with Chinese characteristics through R&D innovation. Synthetic biology is a major trend in the development of ingredient technology in the context of the green economy. It is expected to be further connected and integrated with plant extraction and microbial fermentation technologies.

Development of Efficacy Ingredients of Skin Lightening (1/3)

Skin-lightening ingredients can be divided into inhibition, blocking and metabolism categories according to the action stage and principle.

Development of Efficacy Ingredients of Skin Lightening (2/3)

Beauty Evolution's big data show that 42.1% of the skin-lightening ingredients in the registered products are plant extracts. Plant extracts are widely used in skin-lightening raw materials. According to Yonghushuo, in 2021, Glycyrrhiza glabra root extract is the skin-lightening ingredient that received the most attention from consumers. The core extract is Glabridin. It can effectively inhibit the activity of various enzymes in the melanin production chain. Thanks to its flavonoid properties, it is anti-inflammatory, antibacterial and can prevent pachulosis. What's more, Glabridin can scavenge oxygen free radicals like SOD and has antioxidant effect like vitamin E. More and more manufacturers and consumers are paying attention to the skin-lightening effect of Glabridin. Among the skin-lightening essence brands in China, Grainrain is the first one to use licorice as a core ingredient. What's more, it has gained consumers' recognition and trust. With continuous efforts in the plant extract skin-lighting track, it has become a top skin-lighting brand in China.

Development of Efficacy Ingredients of Skin Lightening (3/3)

Glabridin is widely used in mid-to-high-end skin lightening products of famous international brands

Benefiting from its rarity and consumers' recognition, Glabridin is used in high-end whitening product lines of world-famous brands like Shiseido, Aquamarine, Chanel, and Armani. Due to the rare yield and high unit price, international brands mainly use Glabridin in expensive essence products. Among these brands, Shiseido added it to a multi-function firming essence product based on the multi-channel feature of Glabridin. Thanks to these international brands, the safety and efficacy of Glabridin are professionally verified.

Case Study of Chinese Skin Lightening Products Containing Plant Extracts — Grainrain

Grainrain skincare lab was established in 2007, focusing on studying the application of plant extracts in skin care products. After nearly a decade of research and development, the brand Grainrain was built in 2016. It is the first skin-lightening brand with Glabridin as the core ingredient, providing skin-lightening solutions for Chinese skin. The company's product competitiveness has been confirmed in the market and on the professional side, entering a stage of rapid development. Centering around Glabridin essence, Grainrain has created a series of products such as essence cream. Meanwhile, with years of accumulation of plant extract technology, Grainrain applied experience of core ingredient development in extraction from other rare plants, forming its own plant extract ingredients/product matrix.

Case Study of Chinese Skin Lightening Products Containing Plant Extracts — Grainrain

Through unremitting research in the field of skin lightening, Grainrain has gathered top R&D teams and actively cooperated with authoritative institutions to accumulate core formula patents and exclusive application technologies. Centering on products and based on R&D, the brand has created a full-scenario skin-lightening product matrix. It has been well received by the market and has won many awards from Chinese authoritative media and platforms, forming its brand competitiveness. According to data from iResearch, 35.7% of Grainrain consumers in this survey have sensitive skin, which is the highest proportion among all surveyed domestic brands. The primary reason for consumers to buy Grainrain’s products is the prominent effect.

Case Study of Chinese Skin Lightening Products Containing Plant Extracts — Caudalie

In 1995 Caudalie was founded in France. Its name, which, in wine technology, is a unit for measuring how long a wine lingers in the mouth, set the tone of the brand‘s development around grape plant extracts. The brand initially focused on anti-aging functions. Now, it is a cosmeceutical brand that covers many product lines such as skin lightening, moisturizing, firming, and body care. In terms of positioning, the keywords are nature, purity, and environmental friendliness. Its products focus on taking care of sensitive skin. Its brightening essence lotion is the flagship product of its skin-lightening line and the best seller in the skin-lightening essence category of pharmacies in France. The brightening essence lotion entered the Chinese market in 2018 and its sales volume ranked first among all the liquid essence products of Caudalie in the Tmall flagship store. It is now a star in the skin lightening market in China.

Outlook of China's Skin Lightening Industry

Skin lightening essence containing natural plant extracts can better meet consumers’ demand

Most consumers' demand for skin-lightening efficacy is not lower compared with before the outbreak of Covid-19. Over 70% of consumers admit that their skin-lightening demand has increased. Skin lightening is increasingly common and is penetrating in all scenarios. Consumers generally have high expectations for the mild and efficient plant-extract skin lightening essence suitable for Chinese skin. Their acceptance has increased with the improvement of the reputation of domestic plant-extract skin lightening essence products. It is reasonable to speculate that with increasing trust, the development of natural plant-extract skin lightening essence will be promising.

Outlook of China's Skin Lightening Industry

As of the first half of 2022, among the top ten efficacy claimed by essence filings in the past year, the promotion of brightening essence has risen sharply, while that of skin-lightening and freckle-removing essence has dropped by 52% month-on-month. According to iResearch, this is mainly due to stricter policies related to skin-lightening efficacy application. Some pan-lightening efficacy products may apply for brightening efficacy due to higher thresholds of skin-lightening efficacy tests and approval. The more targeted freckle removal skin lightening essence products have received more attention than skin-brightening essence products. iResearch thinks that head brands will rely on technology accumulation and capital advantage to develop essence products that can better meet Chinese people's skin-lightening demand. Plant extracts and Chinese herbal medicine are the two main types of popular raw materials and they will be more and more commonly used in skin lightening, anti-aging and other products. Oriental herbal ingredients will become a highlight of skin-lightening essence products in the future.

Outlook of China's Skin Lightening Industry

According to public data, as of the end of March 2022, facial mask, sunscreen, and facial essence were the Top three categories by sales in the skin-lightening market. From the perspective of growth rate and proportion, the growth momentum of hand care and body lotion is very strong. The data indicate that mature brands need to attach importance to both the creation of popular single products, and the forward-looking layout of emerging and high-growth sub-categories. Only by continuously expanding production lines can brands build a moat for the skin-lightening product matrix through the seasonal cycle. In turn, the improvement of a full range of products can enhance brand power and users' mind, forming a virtuous circle.

Outlook of China’s Skin Lightening Industry
- Summary

From the perspective of products, Chinese consumers‘ skin-lightening demand shows a trend of advancement and refinement. Consumers want mild, natural and effective products, which will further contribute to brands’ product development changes of brands in the Chinese market. From the perspective of ingredients, thanks to consumers’ demand and preference for natural ingredients, the proportion of plant and herbal extracts in skin lightening products is expected to grow. From the perspective of categories, most brands adopted the strategy of vigorously promoting single products in the early days, which was an effective strategy to increase their market shares. However, to break through the ceiling of a single category, they need to constantly improve and expand their product lines. Mature brands will carry out forward-looking layouts of ingredients and categories based on the advantages of their single products, strengthening brand power.


Development history: The upgrade of consumers' functional skin care concept promotes the increase in advanced skincare demand represented by skin lightening. Mild and efficient skin lightening products are more suitable for Chinese people, who have fragile skin that tans easily. As the skincare category with the strongest correlation to efficiency, skin-lightening essence has become the primary and core category of brand owners' skin-lightening segment layout. In 2022, the official implementation of regulatory policies related to skin lightening has contributed to the standardized and compliant development of the industry, raising the threshold of the skin lightening segment, and further prevent bad money from driving out the good.

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