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.

A manufacturing base of Amorepacific in Shanghai, established in 2014.[Photo:china.ajunews.com]

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 anywhere between 3 and 30 percent starting from January 15th.

Meanwhile, U.S. cosmetics manufacturer Estee Lauder has also announced it will lower the retail prices of a few make-up and perfume products by 7 to 18 percent starting from January 5th.

Chinese Ministry of Finance says China has eliminated consumption taxes on ordinary cosmetics and will only levy the tax on high-end products. The tax rate has also been lowered to 15 percent.

Chen Min, an industry insider, says in addition to the tax reduction, the rapid development of cross-border e-commerce and overseas purchasing services in China have also pushed international brands to adjust prices in the country.

A recent report released by Changjiang Securities, a securities firm based in the central Chinese city of Wuhan, suggests the contraction in high-end cosmetics market in China as a result of slowed consumption growth has boosted markets for more affordable products and forced luxury brands to lower prices in the country.