Why Are Chinese Consumers Abandoning Maybelline?

Recently, the announcement released by the Tmall flagship store of the American cosmetics brand NYX showed that “the flagship store will cease operations at 12 AM on June 21, 2024, and will no longer accept new orders.”
This is not the first overseas brand to withdraw from the Chinese market. In early 2024, the American brand Becca, which had been in the Chinese market for 17 years, announced that it will officially withdraw from the Chinese mainland market by the end of June or early July 2024. Becca had already begun to gradually close its online channels such as Douyin and Taobao at the end of last year.
Marc Jacobs Fragrances also released an announcement on its Tmall official flagship store, stating that it will cease operations on June 30, 2024, and the membership rights will become invalid after the store closes.
According to incomplete statistics, from 2022 to May 2024, more than 20 overseas cosmetics brands have withdrawn from the Chinese market, including well-known brands such as Innisfree, Maybelline, and e.l.f. Some of them were once very popular in the Chinese market, while others had been entrenched in the Chinese market for many years, but in the end, they all stumbled in this once glorious market.

The cosmetics market is changing unpredictably. Chinese consumers have passed the stage of “worshiping overseas big brands,” and online e-commerce has gradually become the mainstream channel. As overseas big brands withdraw, new and emerging brands are growing like mushrooms after the rain.
Data shows that by the end of 2023, the total number of cosmetics manufacturing enterprises reached 5,722, an increase of 3.81% year-on-year. In 2023, the sales scale of China’s cosmetics industry reached 797.2 billion yuan, with an online scale of 404.59 billion yuan, of which the market share of domestic brands reached 50.4%, surpassing overseas brands for the first time.
With fierce market competition, while overseas brands retreat, domestic brands are also launching a counterattack. According to Statista data, the global cosmetics market size reached $343.27 billion in 2023, with a year-on-year growth rate of 8.9%. It is forecast that by 2027, the global cosmetics market size will approach $400 billion.
Facing a wider overseas market, domestic cosmetics brands are quietly reshaping the global cosmetics market landscape.

The Overseas Exploration of China’s Domestic Beauty Brands

The overseas expansion of China’s domestic beauty brands can be traced back to around 2008. Herborist entered the European market through Sephora, a high-end beauty retail chain under LVMH Group; Guangzhou Carslan, an OEM manufacturer, created its own brand Cartier and started to expand to Russia, Mexico, Canada, Europe, and the Middle East.
These brands largely set the tone for subsequent overseas expansion plans of their peers – those who can find advantageous channels will follow the channel partners’ expansion to test the overseas waters, while those with manufacturing capabilities will leverage their clients’ sales networks to expand their own brands abroad.
Nowadays, with the increasingly mature domestic beauty supply chain and the growing prevalence of cross-border e-commerce globally, more and more brands are choosing to expand overseas.
Statistics show that in 2023, China’s cosmetics exports reached $6.51 billion, a strong year-on-year increase of 16.7%; imports were $17.94 billion, down 19.4% year-on-year. The “explosive” growth in exports contrasts sharply with the “sluggish” decline in imports.
Currently, Chinese beauty brands’ overseas expansion is concentrated in the color cosmetics category, mainly in the eye makeup segment which has higher innovation and playfulness.
Among the overseas expansion brands, there are not only mature brands like Perfect Diary and Florasis that have already successfully explored the domestic market, hoping to find a second growth curve overseas, but also new brands that are directly localized in the overseas markets, such as Pigeon and Y.O.U, which are deeply rooted in the local markets through high-density omnichannel coverage and differentiated services.

Perfect Diary eye shadow

In terms of target markets, Southeast Asia and Japan have become the first stops for most Chinese beauty brands due to geographic proximity and cultural similarities. In addition to the relatively small differences in skin tone and texture within the Asian region, the more important reason is that consumers’ beauty trends are similar, which allows Chinese domestic brands to integrate into the local market more quickly.
According to Feishu Shenuo data, the online transformation and e-commerce development in Southeast Asia have laid the foundation for Chinese beauty brands’ overseas expansion. As e-commerce penetration gradually increases, the beauty and skincare category is also showing a rapid online trend. Taking Indonesia, which has the highest beauty online penetration, as an example, the e-commerce sales of skincare products increased from only 1.3% in 2016 to 20.9% in 2021, and the online penetration of color cosmetics even exceeded 30%.
In terms of sales channels, Japan presents a completely different development trajectory. In the Japanese market, where drugstore channels are highly active and mature, consumers’ beauty purchases are concentrated in offline channels, with mass-market products purchased at drugstores and mid-to-high-end products purchased at department store counters. Therefore, many brands entering the Japanese market often choose to penetrate the local market through offline channels such as drugstores.
In 2019, some top Japanese beauty influencers discovered Chinese makeup looks on Xiaohongshu and started recreating them, quickly generating a lot of attention. Since then, “Chinese-style makeup” has entered the Japanese consumer’s field of vision, with “seeking whitening, prominent lipstick, mature beauty, and high-end makeup” becoming the perceived characteristics of Chinese makeup in the eyes of some Japanese consumers. Many Chinese beauty brands have also seized this opportunity, signing Japanese idols and collaborating with Japanese dramas to occupy social media and compete for local consumers.
The U.S. market, on the other hand, presents a development trajectory completely different from Asia. In terms of products, young female consumers in the U.S. tend to prefer a “natural” skin appearance, so base makeup products with a “natural” makeup effect are more popular; in terms of brands, the U.S. market is highly concentrated, with L’Oreal firmly leading both the color cosmetics and skincare segments, but there are also emerging brands constantly disrupting the market through strong marketing tactics.
In terms of marketing and promotion, image-and-text-based Instagram, short-video platform TikTok, and long-form video platform YouTube are the mainstream options for consumers to discover and be influenced by new brands. Unlike the dominance of top influencers in China, the influencer structure in North America is more dispersed, so brands tend to engage in long-term targeted collaborations with mid-tier KOLs.

The Story Behind the “Counterattack” Overseas

Whether in Southeast Asia, Japan, North America, or other countries and regions, differentiation of products is the key in the fierce competition in the overseas market. Among the many brands that have gone global, three types of differentiation strategies – “Eastern Beauty” positioning, cost-performance advantage, and localized expansion – are the top choices for many brands.
Huaxizi is a typical case of a brand that has positioned itself as “Eastern Beauty” to go global.
On October 25, 2020, Huaxizi appeared on the Nasdaq screen in Times Square, New York, releasing a large poster for its “Miao Impression” product series, which also appeared in locations such as Shibuya and Shinjuku in Japan, and Thailand.
On March 1, 2021, multiple Huaxizi products sold out on the first day the brand opened its Amazon Japan store, officially launching its global strategy, and later opened logistics in Japan, the US, Europe, and other regions.
In early 2022, the world-renowned beauty blogger Jeffree Star made a 25-minute video reviewing several Huaxizi products such as the Tongxin Lock Lipstick and Jade Girl Peach Blossom Powder. In September of the same year, the senior figure in the European and American beauty circles, Tati, made two consecutive videos to review dozens of Huaxizi’s popular products such as Air Honey Powder, Silk Nourishing Powder Cake, Tongxin Lock Lipstick, Four-color Eyeshadow, and Makeup Remover.

Jeffree Star made a 25-minute video reviewing several Huaxizi products

Since then, Huaxizi, with its Eastern aesthetic system, has opened up a new approach to the globalization of Chinese beauty brands.
Currently, Huaxizi has achieved online sales in nearly 50 countries and regions, and users from more than 100 countries and regions have purchased Huaxizi products. It is reported that Huaxizi will also collaborate with DFS (DFS), the luxury travel retail company under the LVMH Group, to open its first European counter at Galeries Lafayette in Paris, France, on September 1, 2024.
It is worth mentioning that brands with an “Eastern Beauty” positioning also need to integrate their unchanging cultural core into different regional markets, so there are different focuses in product selection and advertising placement in different regions. Taking the Japanese market as an example, Huaxizi did not choose the most popular bright red in the domestic market, but instead chose the peach red and raspberry red, which are more favored by Japanese women.
In promotion, Huaxizi’s advertising campaigns in the Japanese market and the European and American markets are similar, but on the product landing pages of the independent stations, the main model images in the Japanese market are of eastern appearance with a light and transparent makeup look, while the makeup in the European and American markets is more personalized, with different skin color contrast images.
In addition to the “Eastern Beauty” positioning, many overseas brands also choose to highlight their cost-performance advantage.
FOCALLURE, a brand that has gone global in Southeast Asia, is a typical example of this strategy. FOCALLURE was an OEM factory for overseas cosmetics from 2013 to 2016, during which time it gained exposure to a very flexible cosmetics supply chain and a large amount of overseas cosmetics data. In 2016, FOCALLURE collaborated with the OEM factory Meishang Manufacturing to expand overseas to Southeast Asia. The strong collaboration between FOCALLURE, which already had supply chain advantages, and Meishang Manufacturing, quickly formed a mature flexible supply chain system.
It is reported that FOCALLURE’s total SKU is as high as 6,000, and its Shopee store currently has more than 400 products on sale, including more than 50 lip products, each with more than 10 color options, and some best-selling products even have up to 30 color options.
The advantage of the supply chain lies not only in supporting the rapid iteration of products, but also in compressing costs to the extreme, providing high cost-performance products. According to GoodsFox, compared to the 7-15 US dollar price range of L’Oreal cosmetics, the best-selling items in FOCALLURE’s Indonesian stores are all priced below 5 US dollars, and the high cost-performance ratio is an important factor in the brand’s rapid proliferation in some Southeast Asian countries with relatively low per capita GDP.
In the highly homogenized cosmetics market, brands that have positioned themselves to fit the local culture and style are also not uncommon. Huazhixiao, which is positioned as a Japanese-style girly brand, although its early audience was mainly the pan-anime group, it has gradually converted niche demand into mass consumption through its high-appearance and strong visual impact product design, which awakens the “girl heart” of female consumers.
The girly style originated in Japan and South Korea, so it is natural for Huazhixiao to choose Japan as its first stop for going global.
In 2019, Huazhixiao went global to Japan with its visual packaging as the selling point. Facing a more mature offline channel in the Japanese market, Huazhixiao first entered multiple offline brand collection stores such as LoFt, Plaza, and Tokyu Hands, with a coverage rate of over 90%.
In marketing, Huazhixiao has a multi-channel social media layout, but with some focus, mainly on Instagram, Twitter and TikTok. As of June 2024, Huazhixiao’s Instagram account in Japan has 956 posts and over 100,000 followers.
Since venturing overseas, Hua Zhizhao has been collaborating with local brands or distributors that lean more towards anime, in order to amplify its “young girl” positioning advantage. In 2021, Hua Zhizhao officially announced that Sakura Miyawaki would serve as the Asian brand ambassador. Sakura Miyawaki, who rose to fame with her sweet and girlish image, is a perfect fit for Hua Zhizhao’s young girl brand positioning, further igniting a wave of buzz.
In 2021, Hua Zhizhao entered the Southeast Asian market through e-commerce platforms like Shopee. On the product side, Hua Zhizhao has placed more emphasis on refined and localized operations, making some adjustments tailored to the Southeast Asian market.
For example, Thai consumers are greatly influenced by European and American aesthetics, while also having their own unique Thai-style makeup. They tend to pay more attention to sunscreen and prefer a whiter skin tone. Vietnamese consumers, on the other hand, are more fond of the Japanese and Korean styles, but due to their geographical proximity to China, they also have a higher acceptance of Chinese makeup styles. Apart from that, Hua Zhizhao also needs to customize product strategies based on factors like different countries’ religious beliefs, development paces, and purchasing power.
After years of exploration, Hua Zhizhao’s team has gradually matured its color cosmetics approach. By aligning with local cultural brand positioning and distinctive styles, they first expanded to Japan, and then gradually expanded their footprint, adjusting product strategies based on the preferences of different regions, thus completing their overseas expansion.

Conclusion

From the emerging Southeast Asian market to the mature Japanese, Korean, and Western markets, the overseas expansion of Chinese domestic beauty brands is just the beginning, and they are still far from being able to “stand firm.”
Powerful supply chain support and gradually developed overseas marketing and sales systems are the advantages driving one emerging Chinese brand after another to go global. However, although the experience gained domestically can be replicated to a certain extent in overseas markets, the countries and target consumers are different, and some market perceptions need to be rebuilt.

The overseas market is vast, but this exploratory path still faces many challenges. In the long run, in order to obtain more lasting brand benefits, Chinese domestic brands still need to find new breakthroughs and growth points, and continue to strengthen their efforts in brand building and channel expansion, telling the story of the “Chinese brand” well.