The extremely lucrative COSMETICS industry in China has enjoyed dramatic growth over the past few years and is now the second largest cosmetics consumer market; second only to the U.S.A. Much of this success has been due to the growth of China’s average household income which is a major factor in the changing trends of local consumers. It is also expected to be a driver for increasing demand throughout all Chinese cities according to Euromonitor International’s Beauty and Personal Care in China. Chinese consumers are becoming more particular when picking cosmetic products, not only in terms of quality, but also in terms of health and safety. Larger companies can rely on an established reputation for safety and this perhaps gives foreign investors the edge over domestic brands but the gap is closing as Chines brands become even more accepted as a first choice. The cosmetics industry remains one of the most promising business sectors in China and with domestic brands accounting for around 10% of the cosmetics market, there is a clear gap in the market for international companies. The MALE COSMETICS market is also a rising opportunity with men’s products accounting for 4.6% of retail sales in 2013 according to the China Cosmetic Market Report 2014-2017. This share is forecast to increase further as importantly; it is growing at a faster rate than the female market. Another reason for changing tastes of Chinese consumers’ hails from Japan due to the rise of “Cosmeceuticals” which is the marriage of cosmetics and pharmaceuticals like acne treatment lotions and spot ointments i.e. cosmetics that contain active ingredients that are known to be beneficial to humans in some way. The cosmeceuticals market has been dominated by oversees brands but have recently been joined by Chinese brands such as Tongrentang and Herborist. These companies rely heavily on the unique utilization of traditional Chinese medicines, emphasizing green and natural aspects of their ingredients. There are also huge opportunities in e-Commerce; at present 70% of China’s cosmetic products are distributed by larger department stores and supermarkets but purchasing habits are changing, especially with younger consumers who are moving towards purchasing their cosmetic products online. Distribution and marketing strategies will therefore need to change within the cosmetics industry, with an increasing emphasis on e-commerce. According to iResearch, the total value of China’s online cosmetics market was RMB 8.35 billion (GBP-£878million) in April 2014; with C2C platforms accounting for 63% and B2C platform accounting for 37%. This all presents a challenge and an opportunity for foreign companies; until 2014, China’s top cosmetics retail results dominated by established multinational brands which accounted for over 60% market share. Their success can be attributed to their extensive product ranges and established reputation as well as an accepted dominance in the premium and medium cosmetic markets. But this is increasingly changing with Chinese companies such as Shanghai Jahwa, Proya and Marubi, which dominate the lower end of the market now proving perfectly capable of competing with the big international names that now realise that their brands do not necessarily cater to Chinese tastes or preferences. In fact it is no surprise that from 2013-2014 the best performing Chinese imports in the cosmetics market were Korean and not western brands. As Chinese consumers change their preferences, the cosmetics industry represents substantial opportunities for foreign investors. The expansion of men’s cosmetics, combined with rapid changes in consumers’ spending habits and retail platforms marks key prospect for investment and with a current annual growth rate of approximately 12% the industry is undoubtedly an optimistic point of investment in China.