KPMG releases report: Artificial intelligence reshapes the beauty industry, and the consumer market moves into a new value-driven stage

China News Service, Beijing, September 29 (Reporter Zhang Su) A recently released report believes that mid-to-high-end beauty products are picking up significantly, artificial intelligence (AI) is reshaping the competitive landscape of the beauty industry, and "basic + functional" skin care is still the mainstream trend.

The report pointed out that plant raw material extracts have become the main direction of beauty research and development innovation, and AI is used to shorten the raw material research and development cycle, reduce costs and improve efficiency.

The report also stated that consumers' internal health awareness is continuing to increase, consumers are beginning to actively manage their skin health, and the technology skin care market will become the next new blue ocean.

"Consumer Goods Retail Industry First Half Annual Report" is released by KPMG. It shows that as the living standards of Chinese residents continue to improve, the domestic consumer market is accelerating its iteration, gradually shifting from traditional commodity consumption to a new stage of two-way expansion and coordinated growth of commodity consumption and service consumption. The country continues to rely on the two-wheel drive of "policy + scenario" to deepen the implementation of special actions to boost consumption, and continues to consolidate the basic domestic demand through measures such as increasing residents' income, replacing old consumer goods with new ones, and building a "Buy in China" brand.

The report points out that in this context, corporate brands need to deeply adapt to new changes in the market, continue to innovate products and business models, and promote product quality upgrades, precise supply, and sustainable development.

"The consumption tax reform is expected to trigger a change in investment logic. The market generally believes that the consumption tax collection link will be moved back and decentralized to local governments, prompting the focus of local government incentives to shift from the 'production end' to the 'consumption end'." Weng Ye, tax leader partner of KPMG China's retail and consumer goods industry, analyzed that under this trend, tax-free channels, brand direct sales platforms and compliant high-quality enterprises have become long-term beneficiaries by virtue of their price advantages and risk resistance capabilities.

In the food and beverage segment, the report suggests that healthy consumption demand drives the overall upgrade of the food and beverage industry. Consumer demand is met by basic diet, upgrading to targeted health functional needs, industrialized application of medicines and foods, popularization of clean labels, research and development of intestinal microecology-related products, customized nutrition products for different groups, and expansion of emotional food tracks, becoming a new consumption landscape.

“Enterprises urgently need to actively grasp the trend of consumption upgrades, strengthen supply chain resilience, and improve omni-channel operation capabilities to cope with increasingly segmented market demands.” Sun Guochen, partner in charge of consulting for the retail and consumer goods industry at KPMG in China, said that the in-depth integration of technological innovation and demand insights will not only help create differentiated product capabilities, but also promote the transformation of enterprises from ‘scale-driven’ to ‘value-driven’.