Hong Kong - Country Commercial Guide
Cosmetics and Toiletries

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

Last published date: 2022-01-21

Overview

 

2018

2019

2020

2021 (estimated)

Total Market Size 

3,394

2,471

3,770

5,140

Total Local Production 

128

134

212

275

Total Exports 

3,320

3,911

4,786

5,983

Total Imports 

6,585

6,248

8,345

10,848

Imports from the U.S. 

768

741

1,040

1,404

Exchange Rate: 1 USD 

7.8

7.8

7.8

7.8

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

Units: USD million

Data Sources:

Total Local Production: Estimated from industry sources

Total Exports: Hong Kong Trade Statistics

Total Imports: Hong Kong Trade Statistics

Imports from U.S.: Hong Kong Trade Statistics

Country Market Share of Hong Kong’s Cosmetics/Skincare Market
Country Market Share of Hong Kong’s Cosmetics/Skincare Market

 

Imports dominate Hong Kong’s market for cosmetics, toiletry, and skincare products.  Korea was the largest supplier for Hong Kong US$3.7 billion market in 2020.  France, Japan, and the United States were the other major suppliers.  Hong Kong imported US$1.04 billion worth of cosmetics, toiletry, and skincare products from the United States in 2020, an increase of 40 percent compared to 2019.  This increase in imports of U.S. cosmetics is likely due to increased local consumption arising from the pandemic.  As Hong Kong consumers were spending more time at home during most of 2020, they were able to devote more resources to their personal skincare regimes, resulting in an increase in the purchase of these products.  

For many years, Hong Kong was a major launch pad for marketing cosmetics and skincare products in the mainland Chinese market.  Hong Kong has also served as a showcase for the millions of Chinese tourists (44 million in 2019) that visit Hong Kong each year, often with shopping for personal use, family, or even re-sale as a primary or sole travel objective.  However, there has been a shift, especially in the last three years, where smaller brands have begun to enter the Chinese market directly, rather than using Hong Kong as a launch pad. This trend has been driven by these brands partnering with Chinese investors who have market knowledge, a clear grasp of import and other government regulations, and who have mastered Chinese social media.  Nevertheless, many U.S. companies still sell their cosmetics and skincare products to China through their Hong Kong distributors.   U.S. companies can contact us regarding our fee-based services to locate Hong Kong distributors for their products.   For insights on selling cosmetics to China, you may refer to the China Country Commercial Guide.

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 assurances of 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 in China which do not exist in Hong Kong, meaning that equivalent products may cost less on the Hong Kong side of the border.   

Following the opening of new cross-border transport links, such as the Hong Kong-Zhuhai-Macau bridge and Guangzhou-Shenzhen-Hong Kong Express Rail Link, which have made it easier for Chinese tourists in the southern provinces to travel to Hong Kong for day-trip shopping visits, the number of Chinese tourists to Hong Kong surged in the latter part of 2018 and the first half of 2019.  However, in the latter half of 2019, the protests and social unrest in Hong Kong discouraged many Chinese tourists from traveling to Hong Kong, and resulted in a 14 percent drop in the total number of Chinese tourist arrivals in 2019.  The outbreak of the Covid-19 pandemic exacerbated the drop in the number of Chinese tourists to Hong Kong in 2020 and  2021.  Hence, for local retailers and distributors of cosmetics, toiletry and skincare products, sales in the cosmetics sector for 2020 and 2021 were dependent on domestic demand from Hong Kong residents.    

There are no import duties on cosmetics, toiletry, and skincare products in Hong Kong, and registration is not required for cosmetic products. However, the market is very competitive, with the top ten brands accounting for about 70 percent of the total market.  Appointing a local distributor and working closely with them to promote the brand is essential.  In addition, adapting products to local demands and trends is vital to remain competitive.  This process may include, for example, modifying the packaging and product sizes of products to suit local tastes.  U.S. cosmetic and toiletry suppliers are 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 to local market demands and trends, and maintaining competitive pricing. 

Leading Sub-Sectors

Products with the best sales prospects in Hong Kong include: 

  • Complete line of facial spots’ brightening and anti-aging products  
  • “Dermo-skincare products” for retail distribution and for distribution to doctors  
  • Daily-use facial masks, and home spa, home nail and hair coloring kits  
  • Eye make-up such as fake eyelashes and eyelash extension products, and semi-permanent eyebrow make-up, glossy and bold eye shadow colors 
  • 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 that are formulated to combat the effects of exposure to blue light (from exposure to electronic devices such as smartphones, tablets, and TVs)  
  • 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 
  • “Maskne” products: for treating acne caused by the wearing of face masks 
  • Hand creams that have powerful moisturizing ingredients  
  • Skincare products with cannabidiol oil (CBD) 
  • Private labeling /OEM of skincare products and cosmetics for leading chain stores 

Opportunities

Open Regulatory Environment: Numerous international cosmetics brands choose Hong Kong as their first overseas market or to launch new products in Asia, due to Hong Kong’s 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. 

Ecommerce: Retailers have reported a substantial increase in online sales, especially after the outbreak of Covid-19, with local consumers avoiding shopping trips to retail stores. Even after the Hong Kong government relaxed social distancing measures, consumers continued to shop online after having experienced its convenience.   

Changes in product mix: During the pandemic, retailers have restructured their product mix to focus on hand sanitizers, hand washing products, and home-care personal care product kits.  Also, with more time to view content during quarantine, consumers became more interested in actionable information, delivered through make-up or skincare tutorials, rather than new product launches.  

Macau tourism: 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 casino customers and MICE visitors.  The number of visitors to Macau dropped substantially to 5.9 million visitors in 2020, of which 81 percent, or 4.75 million, were from Mainland China.  Chinese visitors to Macau often purchase skincare products and cosmetics in the major casino resorts’ shopping malls.  Macau has reported low numbers of Covid-19 cases, and casinos were closed only for two weeks in February 2020.  Foreign nationals not residing in Macau, except those from China, Taiwan and Hong Kong are still banned from entering the city.  Travelers from China, Hong Kong and Taiwan are allowed to travel to Macau but must quarantine for between 14-21 days and must meet certain requirements prior to arriving in Macau.  This has had a significant dampening effect on the sales of cosmetics and skincare products, as well as the spa business.  

Resources

Trade Shows: 

Cosmoprof-Asia

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, including for hairdressing, spas, beauty, and skincare salons.  Due to travel restrictions from Covid, Cosmoprof Asia 2021 was postponed to November 16-18, 2022.      

Associations:

The Cosmetic & Perfumery Association of Hong Kong Ltd.

A listing of the Association’s members comprising contact details of importers, distributors, wholesalers, and retailers is available at this website.

 

For more information about this industry sector, please contact:

U.S. Commercial Service, Hong Kong

Swee-keng Cheong, Commercial Specialist

Email: sweekeng.cheong@trade.gov