What Happened:

In April, the total gross merchandise value (GMV) of local online makeup and skin care totaled $2.6 billion, and for the first time Chinese cosmetic brands surpassed international competitors in online GMV. Estée Lauder’s April sales reached $24.5 million, ranking it first among global names, but third overall. Topping the list was domestic beauty brand Florasis with $33.5 million GMV followed in second place by Perfect Diary with  $28.2 million GMV. Moreover, the trend continued in May; however, international companies rebounded in June during the lucrative 618 Shopping Festival.

The Jing Take:

This short, but nonetheless, impressive victory for local brands suggests that these labels are now a significant threat to global names. Domestic consumers are paying less importance to a brands history and the origins of their products. However, the fact that international names reaffirmed their supremacy implies there is still a long way to go for domestic companies to take over China’s vast beauty market.

But the difference between the two is in marketing:

international brands lean heavily on celebrity influence to help achieve significant exposure and traffic, while homegrown brands instead rely on quickly adapting to the dynamic local market, enlisting innovative marketing strategies, and responding much quicker to trends and ever-changing consumer demands.

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Lisa Nan – July 28, 2021