SHANGHAI - High-end cosmetic brands, including Estee Lauder and Amorepacific, have announced price cuts in the Chinese market in the new year in response to lowered consumption tax.
The South Korean beauty company Amorepacific said on Tuesday that the suggested retail prices of 327 items under its four major brands will be slashed by between 3 and 30 percent starting Jan 15.
Estee Lauder, a US company, also announced it will lower the retail prices of a few make-up and perfume products by 7 to 18 percent starting Thursday.
According to the Ministry of Finance, China has eliminated consumption taxes on ordinary cosmetics and will only levy the tax on high-end products. The tax rate was also lowered to 15 percent.
Chen Min, an industry insider, told Xinhua that, in addition to the tax reduction, the rapid development of cross-border e-commerce and overseas purchasing services have pushed international brands to adjust prices in China.
A research report released by Changjiang Securities said the market contraction in high-end cosmetics as a result of slowed domestic consumption growth has boosted markets for more affordable mass products and forced luxury brands to lower prices.