Chinese Spa Consumer Goes Up-market

By Jacqueline Clarke Wellness Research Director, Diagonal Reports | May 18, 2009

It is widely known that the Chinese beauty and wellness market is very large and growing fast. The 370,200 salons and spas in the US are dwarfed by China's 1.72 million salons/spas with their 9 million employees. In addition, it has also been turning in double digit growth rates for many years now and is shortly expected to overtake France as a purchaser of cosmetic products.

Diagonal Reports recently examined the salon and spa sector in China to determine the behaviour of the Chinese spa user and to predict future trends. The large chain operated segment of the salon and spa sector is outperforming the market because these salons and spas attract the biggest spenders on beauty and wellness in China - the young, urban trendsetters who pay a premium for quality therapies and products. While the entire beauty market sector is positive, annual growth rates of more than 12% are forecast in this particular segment.

Care for the face and the body is the backbone of the salon and spa sector in China as elsewhere. However, the particular menus of beauty and wellness treatments offered in these salons and spas indicate the most popular services in China. Beauty services for the face are typically skin care (e.g. cleansing, anti-ageing, blemish removal, problem skin treatments, skin whitening), and for other body parts depilation, manicures, pedicures and nail varnishing.

In addition, these larger chain operated salons and spas routinely offer services which are associated with the medical channel elsewhere. These specialist services include cosmetic laser treatments. body shaping (slimming), anti-cellulite treatments, body building, image makeover, health care therapies, Traditional Chinese Medicine, massage therapies and hydrotherapy.

The salon membership system which skincare spas in particular operate is peculiar to China but also some other Asian countries. This membership system encourages client loyalty and boosts retention rates. Under the system a client makes an advance payment in return for a discount which can be limited to specified locations, and may not apply throughout a chain. Variations on the system include that some chains are only open to members, others are open to non-members. Some allow memberships to be shared, others restrict use to the original purchaser.

These salons and spas have been the main beneficiaries of strong market growth because they provide higher quality standards which Chinese consumers are now demanding. Their size - 15 employees and over 200 m2 per unit - is much larger than the average salon or spa in the country. Their ability to invest in staff training contrasts with the wider professional beauty sector where almost half the employees lack professional qualifications of any type.

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