Overview 

	2007	2008 (estimated)	2009 (estimated)
Total Market Size	815	885	985
Total Local Production	57	60	63
Total Exports	684	718	775
Total Imports	1,442	1,543	1,697
Imports from the U.S.	157	170	184

All figures are in US$ millions.  The above statistics are unofficial estimates, extracted from  Hong Kong Census and Statistics Department and other sources.

Imports dominate Hong Kong’s supply of cosmetics, toiletries, and skincare products as there is very little domestic manufacturing.  (Note: The significant figures shown as Hong Kong exports represent product that is trans-shipped and/or worked in Hong Kong and sent to markets in mainland China and across Asia.) China was Hong Kong’s largest supplier of the US$815 million market in 2007, with an 18% market share. France, Japan and the U.S. were the other major suppliers.  Hong Kong imported US$157 million worth of cosmetics, toiletry and skincare products from the U.S. in 2007.  In 2009, total imports of cosmetics, toiletry and skincare products will likely grow 7-10% over that of 2008. While still strong, this represents slower growth than in previous years, (i.e. 12% in 2008 and 19% growth in 2007) due to weaker local demand and lower spending on these products by tourists to Hong Kong.

Hong Kong is an important launch pad for marketing cosmetics and skincare products into the Mainland Chinese market; it acts as a showcase for the millions of Chinese tourists (approximately 14 million in 2008) that annually visit Hong Kong to shop.  For local retailers and distributors of cosmetics, toiletry and skincare products, increased sales in the next few years are expected to come from the Mainland Chinese tourists who are continually attracted by retail prices that are lower than prices on the Mainland.  Part of the reason for this price discrepancy is the 8-15% import duty, VAT of 17%, and product registration costs that mainland China imposes on cosmetics.  The 20% appreciation of the Renminbi against the US dollar over the last few years has made Hong Kong an even more attractive shopping destination for Mainland Chinese buyers of U.S.-made products as the Hong Kong dollar is pegged to the U.S. dollar. 

There are no import duties on these products in Hong Kong and registration is not required for cosmetics.  The market is very competitive, with the top ten brands accounting for about 70% of the market.  Appointing a local distributor, working closely with that distributor to promote the brand, and adapting products (i.e. whitening ingredients, packaging, and product sizes) to suit local tastes are important to remaining 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 trade of cosmetic products, especially for re-export to China and Southeast Asia.  Many U.S. companies sell their cosmetics and skincare products to China through their Hong Kong distributors.

Best Prospects/Services 

Products with the best sales prospects in Hong Kong are:

• Complete lines of facial whitening and anti-aging products
• Facial skin anti-aging creams and lotions
• False eyelashes and eyelash growth and conditioning products
• Hair coloring and treatment products
• Color cosmetics for eyes, lips and face including permanent make-up for eyes
• Nail colors, nail-care products, artificial nails, nail gels, and nail-art kits
• Skin treatments, slimming treatments and massage products for use in spas and professional skincare salons or under dermatologists’ supervision.
• Skincare, and personal care products made of naturally-derived and organically-grown ingredients
• Skincare products for men
• Sun protection products for the face and body

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 are no labeling or registration requirements on cosmetics.

Demand from tourists accounts for about 30% of Hong Kong’s total retail sales of cosmetics, skincare and toiletry products.  According to the Hong Kong Tourism Board, about 80% of the Mainland Chinese tourists who visited Hong Kong “went shopping” and cosmetic and skincare products were among their top three purchases.  Local retailers and distributors are eager to increase the brands and types of products that they can offer to Mainland Chinese shoppers.  The number of Mainland Chinese tourists in Hong Kong is expected to grow at an average annual rate of 6.9% to 20 million by 2011.  U.S. cosmetics enjoy an excellent reputation among Chinese consumers.

Resources

Major Trade Show:  Cosmoprof Asia 2009
http://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 & 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 “Asia Now” program, U.S. exhibitors receive free market research and can enjoy the buyers’ matching and counseling services of 15 U.S. Commercial Service offices in Asia. 

The Cosmetic & Perfumery Association of Hong Kong Ltd.
http://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
http://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.

For more information about this industry sector, please contact U.S. Commercial Service:

Ms Swee-keng CHEONG, Commercial Specialist
Email: swee-keng.Cheong@N0SPAM.mail.doc.gov
Tel: (852) 2521-5233; Fax: (852) 2845-9800