This is a best prospect industry sector for this country. Includes a market overview and trade data.

Overview

Cosmetics and Toiletries (COS) market in Hong Kong and Macau     Unit: USD thousands

 

2016

2017
 

2018
(estimated)

2019
(estimated)

Total Market Size

2,424,310

2,638,173

2,915,971

3,238,870

Total Local Production

109,857

116,449

128,094

147,308

Total Exports

1,872,786

2,381,913

3,096,487

4,087,362

Total Imports

4,187,239

4,903,637

5,884,364

7,178,924

Imports from the U.S.

452,358

521,458

625,750

763,415

Exchange Rate: 1 USD

7.8

7.8

7.8

7.8

 

Total Market Size = (Total Local Production + Total Imports) – (Total Exports)

Data Sources:
            Total Local Production: Census of Industrial Production and Industry sources
            Total Exports: Hong Kong Trade Statistics
            Total Imports: Hong Kong Trade Statistics
            Imports from U.S.: Hong Kong Trade Statistics

Imports dominate Hong Kong’s large, lucrative and growing market for cosmetics, toiletries, and skincare products.  France was Hong Kong’s largest supplier of the US$2.6 billion market in 2017.  Korea, Japan, the U.S., and China were the other major suppliers.  Hong Kong imported US$521 million worth of cosmetics, toiletry and skincare products from the U.S. in 2017, a 15% increase compared to 2016.  Consumers of Korean skincare products are increasingly switching to higher quality products, such as those from France, Japan and the U.S.  Imports from Korea no longer increased at double-digit rates in 2017 compared to the previous years while imports from Japan, France and the U.S all increased at double-digit rates in 2017. Hong Kong’s imports of cosmetics, toiletry and skincare products will likely grow at about 20-22 percent in 2018 and 2019 with domestic demand from Hong Kong consumers remaining strong.

Importantly, Hong Kong is also a major launch pad for marketing cosmetics and skincare products in the mainland Chinese market.  Hong Kong serves as a showcase for the millions of Chinese tourists (44.4 million in 2017) that annually visit Hong Kong, often with shopping for personal, family or even re-sale use as a primary or sole travel objective.  While China has reduced import duties on cosmetics and skincare products, thereby reducing the retail price differential between Hong Kong and China, mainland visitors to Hong Kong are still attracted to products in Hong Kong over China.  According to industry sources, the perceived authenticity and reliability of the products in Hong Kong often outweighs price as a buying factor.  Apart from import tariffs that the Chinese government imposes on cosmetics, there are also VAT and product registration costs which do not exist in Hong Kong, meaning that equivalent products may actually cost less on the Hong Kong side of the border.  However, for local retailers and distributors of cosmetics, toiletry and skincare products, increased sales in the next few years will be less dependent on sales from mainland Chinese tourists while sales from domestic demand will become more important.  In 2018, Hong Kong has been experiencing the lowest unemployment rates in 20 years, and local demand is expected to record high growth rates. Retailers are also focusing less on just meeting the requirements of mainland Chinese tourists and more on diversifying their revenue stream to the local market to protect their businesses from the shock of low tourist numbers that they have experienced in recent years. 

There are no import duties on cosmetics, toiletry and skincare products in Hong Kong and registration is not required for cosmetic products. The market is, however, very competitive, with the top ten brands accounting for about 70 percent of the market.  Appointing a local distributor and working closely with that distributor to promote the brand, and adapting products to include whitening ingredients, and modifying the packaging and product sizes to suit local tastes are important to remain competitive.  U.S. cosmetic and toiletry suppliers are, however, known for being innovative in product development, and for producing high quality, safe products at competitive prices.  Many U.S. brands are market leaders through continuous brand-building activities and advertisements, adaptation of products and competitive pricing.

Hong Kong is an important entrepot for regional trading of cosmetic products, especially for re-exports to China and some Southeast Asian countries.  Many U.S. companies sell their cosmetics and skincare products to China through their Hong Kong distributors.

Sub-Sector Best Prospects

Products with the best sales prospects in Hong Kong are:

  • Complete line of facial whitening and anti-aging products
  • “Dermo-skincare products” for retail distribution and distribution to doctors
  • Facial masks
  • Hair coloring products
  • Fake eyelashes, eyelash extension products, and semi-permanent eyebrow make-up
  • Nail colors, nail-care products, soft gel nails gels, and nail-art
  • Body treatments, slimming treatments, massage and bath products for use in spas and
  • professional skincare salons
  • Sun protection products
  • Skincare, cosmetic and toiletry products made of organically-grown and naturally
  • derived ingredients, also hypo-allergenic, with low concentrations of fragrance
  • and preservatives
  • Skincare products, hair styling products, and grooming products for men
  • Products for treating acne
  • Private labeling /OEM of skincare products and cosmetics for the leading chain stores

Opportunities

Several international cosmetics brands choose Hong Kong as their first overseas market or for launching new products in Asia citing its open regulatory environment as the attraction.  Hong Kong accepts U.S. product labeling and there is no local mandatory labeling or registration requirements on cosmetics.

Demand from tourists accounts for about 35 percent of Hong Kong’s total retail sales of cosmetics, skincare and toiletry products.  According to the Hong Kong Tourism Board, about 80 percent of the mainland tourists who visited Hong Kong shop and cosmetic and skincare products were among their top three shopping purchases. U.S. cosmetic products enjoy an excellent reputation among the Chinese consumers.

Many of the mega and luxury casino resorts in Macau that have opened in the past few years feature facilities such as spas and skincare treatment centers for the casino and MICE visitors.  Macau received 32.6 million visitors in 2017 of which 61 percent or about 20 million were from China.  Chinese visitors to Macau purchase skincare products and cosmetics in the major casino resorts’ shopping malls.

Web Resources

Major trade show:  Cosmoprof Asia 2018
www.cosmoprof-asia.com
This is Asia's largest, most comprehensive and international beauty industry trade show featuring equipment, products (skin care, cosmetics, personal care products, nail products, perfumes and toiletries, cosmetic raw materials) packaging, and training services in the beauty industry: hairdressing, spas, beauty and skincare salons.  Under the U.S. Department of Commerce’s trade fair certification program, U.S. exhibitors at this show receive free market research and can enjoy buyers’ matching and counseling services of close to 10 U.S. Commercial Service offices in the Asia Pacific region and beyond.

The Cosmetic & Perfumery Association of Hong Kong Ltd.
www.cosmetic-pefume.com
A listing of the Association’s members comprising contact details of importers, distributors, wholesalers, and retailers is available at this website.

Hong Kong Cosmetic Technical Resources Centre
www.hkctr.com
Provides consultancy on regulatory requirements and assistance with product registrations in Hong Kong and China, technical support on product development, product testing and quality control services, provides customized technical training for cosmetic practitioners, and assistance in setting up laboratories.
U.S. Commercial Service, Hong Kong contact:
Ms Swee-keng CHEONG, Commercial Specialist
Email: sweekeng.cheong@trade.gov

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.