Asian women are puckering up for South Korea’s newest lipstick trend, “MLBB”, which is tearing up mainland China, especially among millennial consumers.
The “My Lips But Better” lipstick look, as seen on Kylie Jenner in the US, signals a shift towards more natural colour palettes for Asian women, especially younger shoppers who are getting into premium make-up for the first time.
An MLBB lipstick shade is typically mauve, nude or a dusty pink. Starting off as beauty favourite for K-pop starlets and bloggers, the trend’s popularity highlights the desire for ‘effortless chic’ among Chinese women – this notion of wearing lipstick, but appearing not to be.
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The beauty market’s preference for a pared back aesthetic – teamed with the price accessibility of premium cosmetics — is compelling luxury consumers in Asia to look to lipstick, not clothes.
The lipstick index
As growth in the market for luxury goods — jewellery, clothes and shoes — loses momentum, the global premium beauty and cosmetic industry is gaining ground. This sudden flock to lipstick is linked to worldwide economic uncertainty and is being attributed to the return of the “lipstick index”.
The term was first coined by Leonard Lauder – the former-chairman of Estee Lauder, in 2001 during the recession. Lauder noted that in the autumn of that year lipstick sales rose significantly, meaning that women – when faced with an uncertain environment — turn to beauty products as an affordable alternative to luxury purchases such as fashion and handbags.
Globally, sales growth in high-end beauty products has overtaken expansion in luxury goods, according to a report conducted by Euromonitor. So far in 2016, luxury beauty sales have risen 4.1%, compared to a 1.5% growth for luxury goods.
Tax cuts on imported makeup
Making lipstick even more attractive, the Chinese government in September slashed the consumption tax on imported cosmetic, in a bid to boost domestic sales. On the mainland, tax on premium cosmetics from international brands has been halved and the levy removed altogether on mass-market cosmetics.
Imported make-up products used to have a total effective tax rate of 84 per cent, including the import tariff, VAT and consumption tax, but that was cut to 29 per cent for most beauty products and 51 per cent for luxury brands.
The tax cuts and lower price-points are likely to benefit European and United States brands, considering they tend to be stronger than their Asian counterparts for colour cosmetics like lipstick.
“Overall, we see this as a positive step to boost domestic spending on imported cosmetic products,” lead author Joshua Lu said in a Goldman Sachs research note.
“This will help bring in a greater variety of mass or mid-end colour make-up products, a segment that is growing quickly with the rise of the Chinese millennials.”
Last year US$148 million worth of lipstick make-up was imported into China, a 52.1 per cent increase on the year before, according to Hong Kong Trade Development Council (HKTDC) research.
HKTDC also found the Chinese cosmetics market has been growing quickly, with retail sales of cosmetic products rising from 88.9 billion yuan in 2010 to 204.9 billion yuan last year.
Luxury brands catch up
Recognising the shift from fashion and accessories to beauty, more luxury groups have released lipsticks this year, with Gucci, shoe designer Christian Louboutin and Burberry all recent entrants to the market. They join Chanel, Guerlain and Givenchy, whose dust pink ‘Perfecto’ lipstick is currently sold out in major beauty retailers, including Sephora.
For now, the Chinese, especially millennials, are specifically focused on make-up consumption and are increasingly accessing lipsticks. These lip products, particularly MLBB shades, are more affordable and suitable for everyday use, compared to costly face creams and fragrances.
Looking ahead, luxury brands are hoping that their beauty products will build awareness and encourage loyalty that will eventually transfer to costlier products such as handbags.