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Chinese beauty brand Florasis will open its first counter in Europe at the Samaritaine Paris Pont-Neuf in partnership with LVMH-owned luxury travel retailer DFS this September. Hangzhou-based Proya is set to become the first Chinese beauty brand to hit £1 billion in revenue this year. Buzzy direct-to-consumer (DTC) brand Uniskin launched its first bricks-and-mortar store in April on Yueyang Road in Shanghai — complete with a by-appointment-only space for consultancy and treatments.
As international brands and conglomerates struggle with China’s patchy recovery, C-beauty brands are taking advantage. Proya and its contemporaries are finding success domestically in catering for China’s ‘skinification’ and offering solutions to issues like sensitive skin and colour palettes tailored to Asian skin tones. DTC brands are opening experiential retail stores, and brands are looking at opportunities to expand overseas. What many of these brands have in common is a keen understanding of the Chinese customer, competitive pricing and targeted marketing, as well as an adeptness on local social media sites like Douyin.
“Brands like Girlcult, Timage and Proya have largely succeeded by offering a story and narrative that connects with audiences. These stories include ones based on mythology and legends (Girlcult) or showcasing east Asian aesthetics (Timage),” says Jimmy Robinson, CEO of marketing agency Pingpong Digital. Fragrance brand To Summer is leaning into Chinese culture and history by opening a ‘To Summer Bookstore’ in Beijing earlier this month inspired by the Qing dynasty emperor Qianlong’s study in the Palace Museum.
The ‘fast makeup’ category is one of those gaining traction. Domestic makeup brands can adapt rapidly to local trends and innovate with textures or wide colour ranges, says Juliette Duveau, founder of consultancy The Chinese Pulse. She adds that companies like Colorkey are “slowly but surely” gaining consumer trust by focusing on buzzy products and collaborating with young actors, including Gong Jun and Dilraba Dilmurat, to reach a broader local audience (especially Gen Z). “With their fast R&D (research and development) and production, they can continuously launch new colours and textures at very affordable prices, which make a very interesting option for consumers,” she explains.
In the field of derma skincare, cosmeceutical brand Winona, founded in 2008, has already surpassed international rival Avène as a top-category leader on many fronts, according to Duveau. Comfy — which specialises in human-like collagen ingredients — is also gaining popularity for its use in the aftercare of medical beauty procedures, or ‘tweakments’.
Local names tend to better cater for the sheer size and “wide-ranging climates and clients” found in China, says Adam Knight, co-founder of Yaso, a company that helps brands accelerate in China through social commerce. This assists brands in tapping into the growing opportunity beyond Tier 1 cities like Shanghai and Beijing.
C-beauty’s digital marketing advantage
Chinese brands are often ahead of their international rivals when it comes to digital marketing and e-commerce strategies that succeed locally, says marketing expert Bai Lulu. Video sharing platform Douyin, which allows for more personalised interactions and direct access to potential customers, has become an important marketing tool for the C-beauty category.
“[Local brands] are all very adept at leveraging the capabilities of Douyin. Proya utilises a mix of professional live streamers and in-house talent to promote products on Douyin, offering special discounts and limited-time offers during live sessions to boost viewer engagement and conversion rates,” she explains. Shanghai-based skincare brand Chando uses its live-streaming features to demonstrate product usage and efficacy, Lulu adds, providing viewers with “real-time interactions and immediate purchasing options that are supercharging its appeal”.
Knight puts much of C-beauty’s recent success down to such features. “Homegrown brands have been innovating in all sorts of areas in recent years such as product efficacy, price and consumer strategy. But there’s a social commerce nativeness that brands like Proya have managed to build into their strategies over the years,” Knight explains. This is where large multinational companies dominant in China can’t compete — it’s all about “adapting to where the conversations are happening”.
Ongoing headwinds for international giants
Weakened consumer sentiment — including a pandemic-driven shift in loyalty towards domestic brands — continues to niggle global conglomerates in China.
Recent earnings indicate that multinationals are encountering sluggish sales within the country, as well as lower travel retail sales from Chinese tourists. In February, L’Oréal Group CEO Nicolas Hieronimus reported a “stagnating beauty market in China”. Its luxe division (comprising Lancôme, Helena Rubinstein and YSL Beauté) was roughly flat in Q4 2023, weighed down by China. Hieronimus said market growth was subdued at less than plus 1 per cent. Estée Lauder Companies (ELC) lowered its full-year forecast, citing soft sales in China among its hurdles.
L’Oréal’s Q1 2024 earnings in April showed a consistently weak sales environment in Asia despite a 3 per cent net sales growth in APAC during this quarter, led by Hong Kong (which grew double digits). Mainland China was up low-single digits. ELC CEO and president Fabrizio Freda said sales were strong in January for Chinese New Year, but softened in February and March with skincare and fragrance performing best.
Big multinationals are failing to adapt to the changing demands of the Chinese market, says Knight. “The beauty category in general continues to be recession proof.” Knight puts the challenges facing foreign brands down to them “trading off legacy” and “resting on their laurels” rather than doing the hard work of “understanding what the consumer wants”.
This includes value for money. Consumers in APAC rate this the top-desired feature across skincare, haircare and colour cosmetics, new research from Euromonitor shows. This doesn’t necessarily mean cheaper, however. Consumers want sophisticated, science-based products that are effective, says Yang Hu, insight manager for health and beauty Asia at Euromonitor. She advises brands to focus on “increasing value from various aspects rather than simply lowering prices, for long-term growth”.
Still, local brands have a long way to go to compete with the big multinationals. “We are still learning a lot from international brands in terms of brand building, retail operations and supply chain management,” says Gabby Chen, president of global expansion at Florasis. The DTC brand has only two stores at home (in Sanya and Hangzhou). It also has to deal with price fluctuation due to currency exchange rates: outside of China it holds a higher price, placing it alongside Givenchy Beauty or Chanel.
Is 2024 the year C-beauty cements its global reach?
The Chinese Pulse’s Duveau says many C-beauty brands that are finding success overseas have focused on Southeast Asia. “Makeup brands such as Into You and Flower Knows are actively exploring East Asian — Japan and South Korea, more specifically — and Southeast Asian markets, because the young customers have similar aesthetic codes and [this] can increase their sales,” she explains.
Europe is a harder nut to crack. C-beauty brands are still relatively unknown in the West, and are up against stiff competition. “Most of these C-beauty products that are outperforming international brands in the China market specifically target the Chinese audience — which may limit [C-beauty’s] success outside of the domestic market. A significant amount of localisation or even product innovation may have to be done for such brands to go global, which may result in a costly exercise with limited returns,” says Lydianne Yap, research director at RTG Consulting Group.
“Beyond that, there is also the cultural export consideration, where the global audience must be interested in China and its pop culture — which is something that China would still need to solidify — before consumers would buy into its products and exports,” says Yap.
Florasis’s counter in Samaritaine — its first-ever bricks-and-mortar presence globally — will be the culmination of a four-year strategy to build up a retail presence. Chen hints that further expansion is in the pipeline: “We simply don’t have enough retail to tell our story. I’m pushing for that as it will create an immersive brand experience.”
The brand is known in China for its guochao appeal thanks in part to its packaging, which is grounded in Chinese culture, heritage and aesthetics. It will debut in Europe with The Nomadic Glam range inspired by the culture of Inner Mongolia. “We believe that the essence of our brand and our attention to detail such as the packaging will help us stand out on a global stage,” Chen says. Investment goes into R&D (it currently has 150 patents outstanding), product design and channels, as well as ESG initiatives.
Florasis’s global business is currently less than 5 per cent, so the odds are stacked high. But it has stamina, says Chen. “We know it’s not going to be easy as there are so many to choose from, why should you choose one to do that is made in China? But it’s OK. We’ll slowly prove to consumers why we deserve a chance.”
Correction: This article was updated to correct the name of Juliette Duveau s consultancy, The Chinese Pulse. A previous version of this article incorrectly called the consultancy, The China Pulse.
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