L'Oreal set to buy skincare company Magic Holdings

"Facial masks have experienced strong growth this year both online and offline. Offline, the annual total sales of facial masks from October 2012 to September 2013 reached 5 billion yuan ($821 million), with a year-on-year growth rate of 32 percent," said Li Xin, managing director of Nielsen Online in China.

"A mix of products and pipeline focused on middle-and-low prices are likely to attract more online shoppers especially during online shopping-spree days when, generally speaking, consumers are price-sensitive," he said.

Richard Ding, senior retail expert and chief executive officer of Shanghai Zonfa Commercial Management Group, said that the change of Chinese consumers' habits - more inclined now to buy products online - has provided much room for the development of domestic cosmetics brands.

"As most overseas brands are much superior to domestic brands in terms of the distribution channels in department stores and hypermarkets, some domestic cosmetics brands have been eyeing e-commerce," Ding said.

"It usually takes more time and more sophisticated planning for leading overseas brands to adjust their marketing strategies. In this sense, smaller domestic brands may have the advantage of responding faster to the most recent market trends."

Ding added that leading overseas brands have also been adjusting their strategies in China by attaching more importance to rural areas. With China's ongoing urbanization drive, Ding believes people living in rural areas will be the next driving force for consumption in the country.

"It's much easier to enter lower-tier Chinese cities with the products of a domestic brand than L'Oreal's own cosmetics brands," he added.