Old domestic brands experience revival

JINAN - Domestic cosmetics and personal care products that were popular in decades past have grown popular once again, with both young and old Chinese seeking a piece of nostalgia.

Although China's cosmetics market has been dominated by foreign brands since the 1990s, older brands have started to return to store shelves.

Taobao.com, China's biggest online shopping site, has more than 8,500 stores selling a total of 130,000 national brand products, the oldest of which date back to the 1960s.

"The old cosmetics brands carry memories from my childhood. I cannot help buying them," said Wan Ying, a resident of Jinan, capital of east China's Shandong province.

"National brand skin care products have sold in greater number in recent years. Compared to international brands, domestic brands are much cheaper and more suitable for Chinese skin," said Xie Ping, owner of an online store.

The Beijing Yamei Cosmetics Factory, founded in 1987, has made deals with online stores that have boosted its annual sales to 25 million yuan ($4 million). Its annual sales totaled just 3 to 4 million yuan around the end of the 1990s.

Shanghai Jahwa United Co Ltd, a leading producer of cosmetics and personal care products, reported profits of 610 million yuan in the first nine months of the year, a year-on-year increase of 77.2 percent, according to its third-quarter earnings report.

"Old domestic brands have a large number of loyal customers," said an online store owner surnamed Liu.

The trend has created new competition for foreign brands. According to statistics from global market research firm AC Nielsen, transnational cosmetics companies maintained a market share of 57.9 percent in May 2009. The figure was just 44.5 percent in May 2012.

Domestic brands have also popped up on supermarket shelves to accomodate offline shoppers.

"To meet the needs of customers who do not have access to the Internet, we have tried to cooperate with large supermarket chains. Our brands have entered many shopping malls in Beijing," said Wang Bin, deputy director of the Yamei Cosmetics Factory.

The cultural magnetism of older domestic brands should be seen as a source of wealth for some companies, said Xu Hanqiang, a brand marketing expert.

"Nostalgia can serve as a wonderful opportunity for old brands to return," Xu said.

Liu Dongming, a marketing expert at Tsinghua University, said the brands will still need to develop with the times, as their nostalgic appeal will likely be short-lived.

Companies that produce older brands should continue to develop innovative products that target consumer demand in order to establish a strategic brand system, Liu said.

"It is painful to see some older domestic brands disappear. I hope the revived brands aren't a flash in the pan and can remain competitive," Xu said.