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Chinese beauty brand Florasis’s smart factory on the banks of the Qiantang River in Hangzhou sounds like something out of a science fiction film. The factory is built around a proprietary “smart brain” operating system, which digitises every step, from raw materials sourcing to final product packaging. Robotic transporters are guided by “laser navigation systems”, while artificial intelligence is used throughout to detect defects and optimise formulations.
The 6,480-square-metre factory soft launched last year and is now fully up and running, employing over 50 technicians and engineers. It is a stake in the ground for Florasis, an eight-year-old indie makeup and skincare brand, which is carving out a name internationally for its blend of traditional Chinese aesthetics and cutting-edge technology. Until now, Florasis has been outsourcing production to third-party manufacturers like Cosmax China. “By internalising production, we can ensure consistent quality, shorten development lead times and become significantly more responsive to consumer feedback and market shifts,” says Gabby Chen, Florasis president of global markets.
However, as one of the first independent C-beauty brands to build a smart factory of this scale and complexity, Chen admits the challenges are multifaceted.
Smart factories are part of a national strategy to digitalise the manufacturing sector and make it greener, especially among SMEs (small and medium enterprises), according to China’s Ministry of Industry and Information Technology. Traditional factories are adopting China’s digital transformation in droves to better manage quality, productivity and cost, explains Vincent Djen, who has 20 years of experience in product development and supply chains in the apparel sector, where smart companies are more common (alongside health tech and consumer electronics). “This is a major trend in manufacturing in the past few years. It allows management to monitor in real time how the factory is doing in terms of productivity and quality so they can make adjustments on the fly,” he says.
Beauty conglomerates use automation and AI to varying degrees. L’Oréal Group, for example, has smart factories in China and France. However, it’s rare to see independent beauty brands invest in such high-tech capabilities.
Founded in 2017 in Hangzhou, which is one of China’s tech hubs, Florasis was one of the earlier names to pioneer the C-beauty craze, rooted in traditional Chinese aesthetics, craftsmanship, skincare philosophies and formulas. It foregrounds storytelling, product artistry (such as embossing and intricate engravings) and elevated packaging, all of which has contributed to its success. In 2021, it turned over upwards of $800 million in sales (more recent figures have not been disclosed).
Now, thanks to the smart factory, it has seven digitalised production lines, which facilitate a diverse product portfolio including skincare, base makeup and powder-based colour cosmetics, with an annual production capacity of 50 million units.
The factory was years in the making. “As early as 2020, we began laying the groundwork to move towards full vertical integration,” says Chen. “We recognised that a brand with high R&D [research and development] intensity, a fast innovation cycle and global ambitions would need long-term infrastructure to sustain quality and speed.” Florasis declined to disclose the amount invested in the smart factory, though experts estimate that it runs into the millions.
After scaling domestically (it sells online and has stores in Hangzhou and Sanya), Florasis has been making moves into international markets, including Southeast Asia, Europe, the Middle East and Japan, through direct-to-consumer models and retail partnerships. As it expands, Florasis’s bid to build vertically integrated, automated systems that reduce reliance on legacy suppliers should give it a competitive advantage, says Adam Knight, CEO of omnichannel company Yaso. “Smart manufacturing compresses lead times, boosts margins and improves consistency — meaning digitally native brands like Florasis can go toe-to-toe with global giants,” he explains.
Not without challenges
Having control over production at a time when the global beauty industry is facing headwinds on several fronts is significant. Geopolitical instability, tariffs and trade restrictions, fluctuating regulations and logistics costs, and regulatory compliance challenges are all hammering the sector. While Florasis’s smart factory doesn’t fix these global issues outright, Knight believes it offers a “compelling solution” to the challenges of scaling efficiently and sustainably, especially for fast-moving C-beauty brands.
“Smart factories like this are raising the bar on speed, sustainability and cost efficiency. It’s not about replacing traditional supply chains overnight — but it is about building the flexibility to compete in an unpredictable global market,” he explains. This means long-term resilience and efficiency in a world where beauty brands need to move faster.
Still, it’s not all plain sailing. One obstacle lies in talent and technology integration. “From engineering to cosmetic science, it took years to align and integrate these disciplines into a seamless system,” Chen says of the cross-disciplinary team capable of merging Industry 4.0 technologies like AI, automation and cosmetic production in controlled environments.
Another hurdle comes when maintaining the brand’s artisanal identity in the face of adopting automation. Florasis is known for its luxury packing, which is not easily produced en masse, especially for products like engraved compacts. The fact that Florasis adopts global standards and formulation practices — and the difficulty of navigating those regulatory requirements — add “layers of complexity”, adds Chen.
Even with these drawbacks, the smart factory confirms a broader trend: the growing role of supply chains in brand strategy. Many international brands still operate using fragmented, linear systems that simply can’t adapt fast enough. Isaac Hetzroni, a supply chain expert and CEO of consultancy The Sourcing Guy, warns that vertical integration is not something brands should romanticise. “If they don’t have the right systems and cash flow in place, it can actually kill the business,” he explains. But when it’s done right, it offers security. “You insulate yourself from external shocks like tariffs, shipping delays and compliance issues, while building directly towards your sustainability goals. I think we’ll see a lot of others start to follow their lead, across sectors.”
Chen hopes the smart factory can serve as a replicable framework for other homegrown or emerging brands. “This isn’t just a factory — it’s a scalable, sustainable model of future-ready beauty manufacturing,” he says.
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Correction: This article was updated to correct Gabby Chen s job title to president of global markets. (25 June 2025)
