Chinese Market

In the process of Chinese market economy development, cosmetics industry is a booming industry and it is also one of the fastest growing industries in China. In the early 80’s, the national sales of the cosmetics industry was only 2 million Yuan, but this figure had grown to 700 million Yuan in 2007. In 2010, this figure was more than 1000 billion Yuan. In this huge market potential competition, Chinese domestic cosmetic brands are obviously losing the battle. There are only a few domestic brands against foreign brands on Chinese markets. This is the painful experience of the entire Chinese cosmetic industry. After China has joint WTO, due to the tariff reduction, the internationalization of the Chinese cosmetic market is inevitable. By the end of 2007, almost entire world current mainstream cosmetics brands entered into Chinese market, which led to a fierce competition between international brands and domestic brands. (Baidu Baike 2011)

Faced with this situation, more and more Chinese domestic cosmetic companies have realized that it is essential for them to depend on their own unique cultural features, differentiated market position, expanding the market and finally achieve internationalization. Herborist is one of the typical examples.

At present, Herborist has more and more consumers all over China. Most of its consumers agree that its products are not only useful but have reasonable prices. On the other hand, cosmetics as daily used products have more opportunities. In addition, the most attractive factor is that their products have more features than other brands. As far as we know herbal medicine is very traditional and unique in China. Currently, more and more European consumers are interested in herbal medicine and this tendency provides a big chance for Herborist.

Because of the overproduction and excess capacity.