Research On Market Structure, Behavior And Performance Of Chinese Cosmetics Industry

With the promotion of per capita income and urbanization, people’s living standards improve step by step, after people put their basic problems to solve, such as clothing, housing, begin to pay more attention to their appearance slowly,face score economy emerges as the times require.However, compared with the cosmetics industry in developed countries, China’s cosmetics industry overall development level is still relatively low, enterprises are facing fierce competition. This paper studies market structure, market conduct and market performance of China’s cosmetics industry by using SCP framework from the perspective of industrial organization theory and finds the problems existing in the development of China’s cosmetics industry, and puts forward the relevant countermeasures.Firstly,this paper elaborates the research methods and thesis structure, background, research significance, and introduces the related theory of industrial organization, and the domestic and foreign cosmetics industry literature.Followed by a review of the history of the development of China’s cosmetics industry, this paper describes the status of development of cosmetics industry in our country from two aspects of market situation, import and export.This paper points out that there are great potentials for China’s cosmetics industry.Thirdly, this paper focuses on China’s cosmetics industry market structure, market conduct and market performance.Study finds:From the aspect of market structure,China’s cosmetics industry market concentration gradually reduces,the difference of product differentiation mainly originates from the consumer demand,a system of higher requirements and brand effect are barriers to entry. At the same time, the development of the electricity supplier channels reduce the barriers to entry.From the aspect of market conduct,the market competition is becoming increasingly fierce because the cosmetics industry market concentration is reduced.China’s cosmetics enterprises integrate through mergers and acquisitions to gain market share, technology and brand to expand the enterprise scale quickly in the short term, in order to improve the competitiveness of enterprises, to deal with the impact of Multi-National Corporation.Meanwhile, China’s cosmetics enterprises invest a huge sum in advertising,for the purposes of enhancing brand awareness and consumer impression.In terms of pricing,they make a price according to the brand class targetedly.From the aspect of market performance,China’s cosmetics business sales of heavy, light R&D, R&D costs generally less investment, high cost of sales, has affected enterprise’s profit rate, and China’s cosmetics industry product quality problems are outstanding, the degree of consumer satisfaction is not high, reducing the market performance.Finally,according to the existing problems in the development of Chinese’s cosmetics industry,such as:enterprises’small scale,low market concentration degree,variety of product quality,insufficient innovation ability and so on,this paper puts forward some corresponding countermeasures from the angle of the government and enterprise respectively to adjust the organizational structure of China’s cosmetics industry:promote the formation and development of the cosmetics industry economies of scale, reasonable enterprise mergers and acquisitions, increase investment in R&D and other measures to enhance the competitiveness of China’s cosmetics industry.