PwC Study Shows Economic & Social Contributions of Personal Care Industry in China

SpecialChem - Jun 1, 2012BEIJING -- The Personal Care Products Council released a new study by PricewaterhouseCoopers (PwC) on the economic and social impacts of the personal care products industry in China. The study found the industry makes important contributions in the areas of research and development, employment of women, environmental sustainability, charitable contributions, and international trade. Based on 2008 data, the study found that the industry was directly or indirectly responsible for the employment of more than 2.5 million Chinese workers, accounting for 53 billion RMB in labor income and contributing 164 billion RMB to the Gross Domestic Product (GDP). PwC has projected an annual growth rate of 12.0 percent for the industry through 2020.Lezlee Westine, President and CEO of the Personal Care Products Council (PCPC), was in Beijing to share the study. "China is an essential marketplace for the global cosmetics industry," Westine said. "Chinese families use products every day in their beauty and grooming routines, and demand the highest quality. The manufacture and distribution of personal care products is an increasingly important sector of the Chinese economy, and the industry offers new opportunities for women, who represent 80 percent of the industry's workforce."Mr. Zhang Jingyuan, Secretary General of the Chinese Association of Fragrance, Flavors and Cosmetic Industries (CAFFCI), praised the study, saying, "PwC has highlighted the vital role cosmetic companies play in the Chinese economy. The industry is a growing source of employment in China, and is responsible for an increasing share of exports and investment in manufacturing, research and development."Personal care products include a wide range of consumer goods dedicated to health, hygiene, grooming and beauty, including perfume, sunscreen, hair and skin care products, cosmetics, and dental care products. These products are consumer staples for Chinese families, especially among the growing middle class. Companies in the industry research, develop, produce, market and distribute personal care products for use at home and in salons and spas. While globalization has led to a rise in imported products, domestically manufactured personal care products represent the majority of the Chinese market, where exports exceed imports.In addition to the economic growth the personal care products industry supports, the industry makes several important social contributions to China. Women make up 80 percent of the workforce in the industry, compared to an average of 35 percent across the entire Chinese workforce. China's daily care products industry, which includes personal care products, invests significantly more in R&D than other similarly sized manufacturing sectors. The industry is also a leader in energy efficient manufacturing practices, and many of the industry's manufacturers are using renewable energy sources and leveraging technology to conserve water use and minimize waste. The personal care products industry also makes charitable contributions that benefit public welfare in China, with a particular focus on disaster relief, health, education and cultural programs.The PwC study, titled "Economic and Social Contributions of the Personal Care Products Industry in China," used 2008 Chinese Economic Census data, PwC research, and the Mudan model of the Chinese economy to project the economic impact. Key findings include:Industry Supports Millions of Jobs: The personal care products industry accounted for approximately 2,554,700 jobs in China, according to 2008 data. Those jobs earned 53 billion RMB in income.Industry Makes a Large Contribution to the GDP of China: In 2008, the industry's total value-added impact on the GDP of China was 164 billion RMB. This is projected to reach 502 billion by 2020.Industry is Growing Rapidly: PwC projects the personal care products industry in China to grow at an average annual rate of 12.0 percent between 2008 and 2020. This pace is well ahead of the overall projected growth rate of the Chinese economy.Industry Employment Diversity is Strong: The percentage of female employees in the personal care products industry is approximately 80 percent, significantly higher than the national average of 35 percent female employees.Industry Invests in Increased R&D Spending: The industry spent 887 million RMB on R&D activities in 2008. The number of R&D projects grew by 144 percent between 2004 and 2008.Industry Leads in Environmental Sustainability: The industry is a leader in energy efficiency, pollution abatement and cleaner production, and reducing carbon emissions.Industry Generates Significant Trade Surplus: While industry-wide import and export data is not available, data for shampoo, bath products, and body soap show that the industry is a net exporter. For example, Chinese shampoo exports grew by 29.4 percent in 2010. Together, imports and exports grew for these products, reconfirming both China's role as a global manufacturing hub, and growing Chinese consumer demand for high-end products.Industry Charitable Contributions Are High: Personal care products companies make significant charitable contributions in China. The Estee Lauder Companies has made significant contributions in China through The Breast Cancer Research Foundation and The Breast Cancer Awareness Campaign. Perfect China, headquartered in Zhongshan, Guangdong province, has built more than 12,000 water wells and 1,300 small scale water supply systems in northwestern China. Colgate has promoted dental care to 100 million children. Amway has partnered with 18 top universities and donated 9.8 million RMB to encourage students to become volunteer teachers in poor rural areas. Dabao has donated more than 200 million RMB to charity, including more than 5 million RMB to help children from disabled families. About Personal Care Products CouncilBased in Washington, D.C., the Personal Care Products Council is the leading trade association representing the global cosmetic and personal care products industry. Founded in 1894, the Council's more than 600 member companies manufacture, distribute, and supply many of the most prominent and well respected global brands. As the makers of a diverse range of products millions of consumers rely on every day, from sunscreens, toothpaste and shampoo to moisturizer, lipstick and fragrance, personal care products companies are global leaders committed to product safety, quality and innovation.