Inside China’s Fragmented Beauty Market

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In China's competitive beauty market, global beauty players now face challenges such as an increasingly fragmented online retail, Douyin's drag on pricing power, and agile local alternatives.

According to the latest data from the National Bureau of Statistics, for the month of July, total cosmetic sales fell 6.1 percent to 24.5 billion renminbi, or $3.35 billion. From January to July, total sales in the cosmetics category edged up merely 0.3 percent year-over-year to $241 billion..

“The reason behind market fragmentation is the fragmentation of retail channels,” said Liu Yin, a beauty expert and founder of FBeauty, a Chinese beauty research firm. “Douyin’s gross merchandise volume has already surpassed Tmall in the first half of 2024, taking share from Tmall. But brands need to realize that Douyin marketing is markedly more expensive and directly targets a more price-sensitive customer base,” said Stefan Huang, head of strategy at Joy Group, a Gen Z-friendly cosmetics based in

More specifically, bioactive ingredients, synthetic biology technology, and high-efficacy formulas will continue to drive industry growth. Based on official registration record, out of 69 new beauty ingredients or formulations registered in China last year, 50 came from local beauty companies, including top players such as Proya, Botanee and Bloomage.

 

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