Luxury vs. Budget-Friendly Skincare Products——What Are Their Differences?

There is a wide variety of skincare products in the market, ranging from drugstore brands to luxury brands, offering a comprehensive selection.

Take a simple example, a "serum" can be priced as low as less than a hundred HK dollars or as expensive as a few thousand HK dollars. From the consumer's perspective, products with lower prices are naturally more accessible, but can affordable products truly provide optimal skin benefits? On the other hand, are expensive ones necessarily superior, or is everyone just paying for their brand names?

Today, let's discuss the differences between more expensive high-end skincare products and budget-friendly skincare products, so everyone can make more informed choices based on their preferences, budget, and skin needs.

Costs of Developing and Selling Skincare Products

To understand the differences between budget-friendly and luxury skincare products, it is important to know all the costs involved in developing and selling skincare products by any company:

Research and Development Costs

• Cost of Ingredient Sourcing: Including costs of various ingredients, containers, packaging
• Research and Technology Costs: Including costs of researching new technologies, formulations, ingredients, as well as expenses for laboratory equipment and human resources
• Clinical Testing Costs: Costs associated with conducting clinical trials to validate the efficacy and safety of the products
• Patent and Intellectual Property Costs: Costs incurred for acquiring patents or intellectual property rights

Product Recommendation
HANISUL
Less More MO-A™ Advanced Ampoule  <- Click to Shop

Production Costs

• Manufacturing Costs: Including expenses for processing raw materials, labor, and equipment during the production process
• Packaging and Labeling Costs: Encompasses the design, printing, and production costs of product packaging and labeling
• Quality Control Costs: Expenses for inspections and quality control to ensure products meet standards
• Transportation and Logistics Costs: Various costs associated with transporting raw materials to manufacturing facilities and products from manufacturing facilities to sales locations

 Product Recommendation
EATH LIBRARY
The Pure Wonder Active Serum  <- Click to Shop

Marketing and Sales Costs

• Marketing Costs: Including costs for offline and online advertising, models, spokespersons, ambassadors, promotional activities, public relations and marketing
• Point-of-Sale Related Costs: Including fitting-out, decoration, equipment, rent, insurance, electricity, operational costs etc. for stand-alone stores, and shelf costs for third-party retail stores
• Point-of-Sale Display Costs: Including various display racks, display products and testers, promotional materials, sample sachets, etc. for both stand-alone stores and third-party retail stores
• Online Sales & Marketing Costs: Including various costs such as website design and maintenance, website operation, order packaging and shipping
• Customer Service Costs: Costs required for various after-sales services and support

Product Recommendation
OUMERE
Serum Bioluminelle™ 

Other Costs

• Human Resources Costs: Salaries and benefits of management personnel, R&D teams, marketing teams, sales teams, consultants, advertising & PR companies and other third-party service providers
• Administrative Costs: Including rent for office and storage rent, office operational costs
• Other Costs: Tax, attorney fees, etc.

After going through the above, everyone should now have a basic understanding that developing a new skincare product from scratch and launching it into the market involves a huge amount of funds.

Product Recommendation
MARIE REYNOLDS LONDON
Peptide Complex Supercharger  <- Click to Shop

Value of Higher-to-Luxury Priced Skincare Products

For many luxury skincare brands, especially those with stand-alone stores and large counters in department stores, the substantial amount of costs involved in lavish decor, rent, famous models and spokespersons, large-scale advertising, and press trips, etc., are largely reflected in their product pricing, with little left for the actual ingredients and formulations of the products themselves. Which means, these products may not necessarily provide the value and efficacy equal to their prices. In other words, many of them are selling the brand and the shopping experience involved, rather than the actual product formulations.

On the other hand, the higher prices of many skincare products do actually reflect their quality, efficacy and overall value, and not just come from the halo of the brand name, for instance:

Ingredients and Their Sources

• Even though certain ingredients may seem the same, their effectiveness may be affected by where they come from. Let’s take olive oil as a simple example – Lion & Globe’s Pure Olive Oil is only about HK$99.90/1L, while Italy’s Olio Piano Luxury Line Extra Virgin Olive Oil goes up to HK$27,000/500ml! They are both olive oils, but their purity, taste and nutritional value are worlds apart.
  
  Similarly, high-end skincare products usually use ingredients from better sources to provide better quality and more effective skincare effects, which will increase the cost of ingredient procurement, transportation and processing.
  
  In addition, many high-priced skin care products will also add expensive high-efficiency ingredients to provide more targeted and effective anti-aging and regeneration effects, such as exosomes, stem cells, growth factors, peptides, retinol, active probiotics, azulene, essential oils, cold-pressed oils, patented or trademarked ingredients and complexes, and certain precious and rare natural ingredients, so the cost will naturally increase.

Product Recommendation
KLUR
Powers Of Ten™ Eye & Line Treatment  <- Click to Shop

R&D and Technology

• High-end skincare brands invest a lot of resources in R&D and employ skincare experts, scientists and formulators to develop patented ingredients or exclusive ingredient complexes, as well as develop new products and improve existing formulas. This will of course be reflected in the price of the product.
  
  In addition, some products and ingredients will adopt high-end technologies such as nanolization, micronization, micro-encapsulation, and fermentation, together with complex delivery technologies like liposomes and timed release, to ensure that the active ingredients can more effectively penetrate into the skin cells and maximize regeneration, anti-aging, and skincare benefits. All of these are obviously costly.

Product Recommendation
ANFISA
ÂN-DEW 10% Azelaic Acid + PHA Serum  <- Click to Shop

Formulation and Clinical Testing

• No matter how effective an ingredient is, its skin care effects are often limited, so high-priced skin care products are often exclusive formulas that combine multiple high-efficacy ingredients with synergistic effects, cutting-edge skin care technology and excellent delivery systems.
  
  To verify the effectiveness of these exclusive formulas, brands will also need to conduct extensive clinical tests, perhaps more than once, to ensure safety, efficacy and optimal results, which of course will also increase the overall cost.

Product Recommendation
AGENT NATEUR
holi(lift) Ageless Lifting and Firming Serum  <- Click to Shop

Production Processes

• Many high-end skincare brands manufacture products in small batches to maintain quality and freshness; and throughout the production process, they usually maintain strict quality control standards to ensure product consistency, purity and efficacy. This production method naturally increases production costs.
  
  In addition, brands committed to sustainable development are more likely to use environmentally friendly production processes and packaging, which greatly increases costs.

Product Recommendation
TWELVE BEAUTY
Plant Perfection Gel Serum  <- Click to Shop

Characteristics of Budget-Friendly Skincare Products

Affordable products do not necessarily mean bad quality, but when skin care products are too cheap, there must be trade-offs, such as raw material procurement, formula and technology, manufacturing process and other factors.

Ingredients and Their Sources

• The main consideration when choosing ingredients during budget-friendly skincare product development is price, rather than the source, activity and effect of the ingredients. Therefore, the ingredients contained are generally basic, extensively used, and cheap, such as cheap niacinamide (vitamin B3), hyaluronic acid, witch hazel, petrolatum, shea butter, mineral oil, beeswax, dimethicone, etc. A large number of synthetic ingredients, emulsifiers, additives, texture enhancers, artificial fragrances, alcohol, low-quality preservatives, and even harmful substances that are cheaper than natural or organic ingredients are likely to be added as well.

R&D and Technology

• To keep their product prices down, budget skincare brands usually conduct minimal R&D. So where do their product formulas come from? One way is to buy pre-made formulas, or just change individual ingredients or concentrations, and then label them as their own brand (i.e. OEM or white label).
  
  Another way is to reduce their own R&D work by reverse engineering, copying and imitating formulas that have already been launched on the market, and then switching out the high-priced ingredients and replacing them with cheaper ingredients.
  
  In addition, in order to save costs, budget skincare products generally do not adopt those high-end technologies mentioned above, such as nanolization, micronization, micro-encapsulation, fermentation, etc., nor do they have complex delivery technologies such as liposomes and timed release. Thus, even if they may contain some popular skincare ingredients, these active ingredients will only stay on the surface of the skin and cannot penetrate into the skin cells to work properly.

Formulation and Clinical Testing

• The formulas of affordable skincare products tend to be much simpler than that of high-end skincare products. For example, low-cost hydrating serums may only use cheap hyaluronic acid and glycerin, and cheaper brightening serums may only contain cheap synthetic L-ascorbic acid and niacinamide (vitamin B3), while budget-friendly moisturizers may mainly use only petrolatum, shea butter, one type of ceramide and ingredients of that sort.
  
  In order to cover up the shortcomings of the formulations, many affordable skin care products will kick up the concentration of a single ingredient, while ignoring the problem of possible skin irritation. In addition, since there are not many effective ingredients involved, a lot of cheap emulsifiers, additives, texture enhancers, fragrances, etc. that have no practical benefits on the skin will be added to make the ingredient list look not as simple (for consumers who don’t know much about ingredients, a longer product ingredient list would always seem more effective than a shorter one). In the worst case, a lot of alcohol or even harmful substances could be added!
  
  In terms of safety, due to the simplicity of the formula, or since the formula is purchased or copied, only the most basic efficacy and safety tests may be conduted, thereby reducing the various costs related to clinical testings and research.

Luxury vs. Budget-Friendly Skincare Products

Skincare products are not just a mixture of ingredients; it is an exact science that involves a lot of research, the individual and synergistic effects of different ingredients and skin cells, various types of high-end technologies and delivery mechanisms, clinical trials, stability studies, etc.

The main advantage of budget-friendly skincare products is that they are relatively low-priced, so they are easily accessible for most consumers. Even if they do not suit you well in the end, well, at least you will not feel bad for throwing them away.

However, since the formulas of budget-friendly skincare products are relatively simple, and the ingredients and technologies used are mediocre, the effects are generally limited or poor. Simple hydration may be okay, but in order to truly targeting anti-aging, brightening, hyperpigmentation, firming and lifting, etc., it really does require another level of ingredients and technology.

Try thinking back whether you have used some budget-friendly products, only to find that they provided little to no effects, or even caused various skin problems, so you had to spend additional money to buy other skincare products, and this process kept repeating itself. In the end, more money is spent than buying a high-end, efficacious product, no?

But then, ineffectiveness is not even the biggest issue, skin damage is!

As mentioned above, in order to reduce costs, most budget skincare products not only have poor sources of ingredients, but also contain alcohol, synthetic fragrances, texture enhancers, irritants, preservatives with insufficient antibacterial power, and even harmful substances. Long-term use will not only fail to improve the skin, but may cause allergic reactions, redness, acne, and inflammations!

For example, niacinamide (vitamin B3) is effective and widely available, but it has two major problems. Firstly, the pure form of niacinamide is expensive to source and manufacture, while cheaper alternatives may contain niacin residues that can irritate sensitive skin. So even if at the same concentration, the better sourced and more expensive ones will bring about skin brightening and sebum balancing effects, while the poorly sourced and cheaper ones may cause allergic reactions and irritations. Secondly, when niacinamide serums are practically everywhere, how can brands distinguish themselves from their competitors? The answer is to increase its concentration to 10% or even 15%. The problem is that many studies have long pointed out that continued use of niacinamide with 5%+ concentrations may cause allergic reactions such as sensitivity, redness, and swelling due to increased histamine levels!

Compared to these affordable skincare products, high-end skincare products usually use more effective active ingredients, more advanced yet harmless formulas, and cutting-edge technology and delivery mechanisms to ensure that results are truly delivered. In other words, investing in a well-formulated product is actually more cost-effective than layering on and constantly switching between multiple ineffective skincare products!

Product Recommendation
HANISUL
Less More MO-A™ Intense Repairing Mask  <- Click to Shop

Of course, expensive price tags do not equate to high efficacy. As mentioned above, what some expensive skincare products are selling are their brand names, shopping experiences, and the sense of vanity, rather than the actual product formulations and effectiveness.

As a consumer, you must first know how to distinguish between sweet talk and marketing gimmicks. If the product description is vague and only focuses on one or two ingredients or technologies and doesn't explain the overall formula, or if the website does not list out all ingredients, with exaggerated before and after photos (such as 2-3 shades whiter or wrinkles completely gone in a week), or even boasts that the effect can be achieved within 7 days, then you must think twice.

Also in The Journal