The U.S. cosmetics magnate Elizabeth Arden Inc. is expanding its makeup and skin care counters to China's second-tier cities, China Daily reported Monday.

Even though people in second-tier cities lack the disposable income of consumers in first-tier cities such as Beijing and Shanghai and have not been as exposed to Western lifestyles, the company hopes its testing counters will allow new customers to tryout its cosmetics products, the newspaper said.

Elizabeth Arden has established locations in 77 cities. The company has 150 beauty counters, which they plan to expand to 200 in 2010.

The numbers and expansion plans are impressive given that Elizabeth Arden joined the Chinese market only in late 2005, much later than other international cosmetics brands such as Estee Lauder, Lancome, Chanel and Dior.

The report "Cosmetics and Toiletries Market in China" from the market research firm RNCOS stated that China's skin care market is expected to grow 12.5 percent annually from 2008 through 2012.

Much of the focus for Elizabeth Arden will be on skin care versus makeup, according to the newspaper.

Since China adds on charges of 10 percent for duty and 17 percent for value-added taxes on imported beauty products, many domestic consumers turn to duty-free shops in foreign countries orin Hong Kong.

But the company was not worried because it believed Hong Kong sellers were helping by nurturing and educating a potential consumer base, said the newspaper, citing Smith Chih-Hsin Chen, president of Elizabeth Arden Greater China.

The average spending on Elizabeth Arden products in China is 800 yuan (114 U.S. dollars) for each transaction, according to Chen.

Source:Xinhua