The cosmetics market in 2025 is experiencing a strong wave of coldness and reshuffling, sweeping through every corner. Brands that once held a place in the market, whether they are old domestic products or emerging forces, are facing unprecedented challenges. From the downfall of the cutting-edge cosmetics company Naijizi with a GMV of over ten million before the 38th National Day promotion, to the bankruptcy liquidation of the veteran cosmetics company Guangzhou Qiaodi with over 20 years of history, all of these phenomena demonstrate the cruelty and fierceness of industry competition.
At the same time, since the beginning of the year, well-known Japanese and Korean beauty brands have collectively withdrawn, and some foreign high-end brands have hit a wall in the Chinese market. Meanwhile, domestic beauty brands have also shown a polarized trend in their development. Against the backdrop of slowing economic growth and changing consumer demand, the era of excessive profits in the cosmetics industry has come to an end, and affordable consumption has become a trend. The industry has entered a new stage of "intensive cultivation and continuous flow". How to find the right direction and achieve breakthroughs in this industry transformation has become an urgent problem for all practitioners to solve.
The decline of traditional makeup brands and the exit of emerging brands have intensified the reshuffle in the beauty industry
20 year old cosmetics company goes bankrupt and liquidates
Guangzhou Qiaodi Fine Chemical Co., Ltd., a well-established enterprise that operates three major cosmetics brands, Qiaodi Shanghui, Shanghui, and Ruzhuang, is currently undergoing bankruptcy liquidation proceedings. Guangzhou Qiaodi was founded in March 2006, and its parent company, Shanghui International Group, was founded in 2001. It was once a sizable daily chemical group. In the development process, brands such as Qiaodi Shanghui have also had glorious moments. During the period of 2009-2013, the performance of Qiaodi Shanghui maintained an annual growth rate of about 30%. In 2015, Shanghui International's overall revenue increased by 37% year-on-year. Qiaodi Shanghui's golden products such as cushion CC cream performed well, with monthly sales reaching 1 million units.
However, since 2013, the growth rate of Qiaodi Shanghui's market performance has slowed down, and sales declined in 2017. In response to the difficulties, it has taken measures such as streamlining SKUs. Although the month on month growth rate of related products increased to over 30% in April 2018, the overall decline is difficult to stop. It can also be seen from the operation of the brand account that Qiaodi Shanghui's WeChat official account will be closed on the 11th day of the Double Ninth Festival in 2023, and Xiaohongshu's account will be closed on May 2022.
In February 2025, the National Enterprise Bankruptcy Restructuring Case Information Network released a public announcement showing that the total amount of debt owed by Guangzhou Qiaodi employees was approximately 5.4409 million yuan, involving 88 employee creditors. In fact, as early as 2023, the failure of Guangzhou Qiaodi had already begun to emerge. Liao Mouqing and He Mouchun had applied for bankruptcy liquidation of it. In September 2024, the Guangzhou Intermediate People's Court ruled to accept Fu Moutao's bankruptcy liquidation application, officially declaring that this old domestic cosmetics enterprise was heading towards the end.
The rise and fall of emerging brands
While traditional makeup companies are facing difficulties, the development of emerging makeup brands is not always smooth sailing. In recent years, emerging brands have rapidly risen through online channels, such as Perfect Diary, Huaxizi, Juduo, etc., which were established around 2017 and began their online frenzy. But with the peak of social media dividends and a significant increase in brand acquisition costs, the development of emerging brands has also encountered bottlenecks.
Founded in 2019, Naijizi mainly sells through online channels. Although it successfully obtained angel round financing, it ultimately announced its closure. The founder of the brand, Chen Shiyi, stated that the main reasons for the brand's collapse were the inability to break through business difficulties, the inability to make profits from projects, and the difficulty in sustaining high cost operations. From the perspective of market competition, the competitiveness of Naijizi in the market is gradually weakening, and its former brand advantage is no longer there. This is also the result of the survival of the fittest in the market. Not only Naijizi, but also the number of investment and financing for cosmetics brands has significantly declined year by year since 2021. In 2024, only Fangli has received investment, and many emerging brands have withdrawn from the fierce market competition.
Japan and South Korea's beauty retreat, foreign high-end brands face cooling in the Chinese market
Renowned Japanese and Korean beauty brands collectively evacuate
At the beginning of 2025, the collective retreat of well-known Japanese and Korean beauty brands has become the focus of the industry. Shiseido and Yameng jointly launched the brand EFFECTIM, and the online channels of Jiyan Zhi Guang have been completely shut down, with offline counters collectively closed; SIENU, a high-end brand under AmorePacific, has completely ceased operations on its online channels. In addition, brands such as SIDEKICK, SHIHYOSHIHYO, Meinado, and Lanzhi have also withdrawn from the Chinese market.
Among them, Lanzhi and Meiyinado have both entered the Chinese market for over 20 years. At its peak, Lanzhi had more than 400 counters in China, and gained a large number of fans with star products such as sleep facial mask, lip cream, and isolation cream. However, since 2019, Lanzhi's situation in the domestic market has been deteriorating. Not only has it gradually closed some offline counters, but there have also been reports of a complete withdrawal from offline channels this year, although its online channel sales have not been affected yet.
Shiseido's Shiseido subsidiary, Shiseido, entered the Chinese market in 2022 with the ambition of becoming one of the top 3 brands in the Chinese men's skincare market share within 5 years, but left in less than 3 years. SHIHYO, jointly founded by L'Oreal and South Korean Samsung Group, has lukewarm sales and popularity in the Chinese market, with less than 1500 followers on Xiaohongshu.
Reasons for foreign high-end brands hitting the wall
Industry insiders analyze that the consecutive decline of Japanese and Korean beauty products in the Chinese market is partly due to misjudgment of consumer perception. In the current economic downturn, consumption tends to be rational, and most Chinese consumers have shifted from chasing "big brands" to purchasing "big brand replacements". However, some Japanese and Korean brands still rely on "brand premiums", making it difficult for consumers to pay. For example, SHIHYO Shiyao, which is priced between 580-1300 yuan, is considered by consumers to lack effective ingredients that are "resistant to damage".
On the other hand, some Japanese and Korean beauty brands have lost their traffic on social e-commerce platforms such as Tiktok. Since 2022, social e-commerce such as Tiktok has become the main sales channel of beauty products. In May 2023, Tiktok's cosmetics sales exceeded that of Taoyu for the first time, with a year-on-year growth of 172.3%. However, brands represented by Shike have less than 10000 fans on the official account of Tiktok platform, and brands like Lanzhi and Jiyan Zhiguang still stick to the high-end department store model and fail to switch to social e-commerce channels in time, leading to the loss of market share and ultimately "losing ground" in the Chinese market.
The polarization of domestic cosmetics and the failure of the "explosive products+traffic" model
The head advantage of domestic cosmetics and the exit of emerging talents
In the fiercely competitive environment of the cosmetics industry, domestic cosmetics are showing a polarization phenomenon. Leading enterprises such as L'Oreal, Yixian E-commerce, and Maogeping have demonstrated significant competitive advantages. In the first half of 2024, the sales revenue of Mao Geping's cosmetics business was 1.085 billion yuan, accounting for 55.1% of the group's revenue. In December of the same year, Mao Geping went public on the Hong Kong stock market, and the stock price surged on the first day of listing. From 2018 to present, Juduo has maintained growth and profitability for six consecutive years, with sales of nearly 2 billion yuan. Yuese is also a rapidly growing brand, with a nearly 10 fold increase compared to the three years in 2020. Kajalan, Luxe, and other brands have also developed well.
However, some emerging domestic makeup brands have failed in the industry reshuffle. Since 2024, HEDONE, Emerging brands such as Fomomy have closed their stores one after another, and in 2025, news of the closure of VENUS MARBLE and Shuiyi has also been reported. These once popular brands mostly rely on explosive products to gain popularity, but their lifecycle is extremely short.
VENUS MARBLE's annual sales reached 260 million yuan in 2018 by virtue of the "marble eye shadow plate", ranking first in the category of Taobao eye shadow for eight consecutive months. However, the flagship store of Tmall will be closed in 2024, and the market will be completely delisted in 2025; HEDONE once became popular because of the "1986 Journey to the West eye shadow Plate". Tmall's flagship store has 1.7 million fans in total, and a certain lip glaze has sold more than 1 million in total, but it will "disappear" in 2024.
Analysis of Reasons for the Exit of Emerging Brands
The exit of emerging makeup brands is due to the departure of capital. After the beauty investment boom from 2018 to 2020, capital gradually calmed down after 2021. The financing events in the cosmetics industry decreased by 73% from 2021 to 2024, making 2024 the most difficult year for the beauty market to raise funds. According to incomplete statistics from Yimei, the number of investment and financing events in the beauty industry in 2024 decreased by 26 compared to 2023, a year-on-year decrease of 18.3%.
The second is the 'bundling' of traffic. Although traffic has helped brands rise in the early stages, over time, the return on investment (ROI) decreases and traffic costs continue to rise. The founder of Fuqi Fomomy once said that the return on investment of the brand's early sales in Tiktok was relatively high, but later the overall return on investment of e-commerce declined, bloggers' quotations climbed, and the data of goods became worse. Even if they entered the head anchor studio, they mostly lost money to earn a shout. The higher the commission, the more they sold, the more they lost. This indicates that the extensive model of "explosive products+traffic" in the beauty industry has become ineffective, and future competition will focus on the three-dimensional construction of research and development depth, supply chain efficiency, and user mentality.
Industry transformation and response, parity becomes a trend, and meticulous cultivation is the direction
The cosmetics industry enters a new cycle
From a macroeconomic perspective, China's economy has experienced long-term high-speed growth since the reform and opening up, but since 2010, the GDP growth rate has continued to decline, entering a period of medium to low speed development. Along with the changes in economic growth, the cosmetics industry has also entered a stage of medium to low speed development from high-speed development. In September 2024, the retail sales of cosmetics were 32.9 billion yuan, a year-on-year decrease of 4.5%. The cumulative retail sales from January to September were 306.9 billion yuan, a year-on-year decrease of 1%, and the year-on-year growth rate of retail sales has been declining for four consecutive months.
According to data from Qichacha, from January to October 2023, 1.4325 million cosmetics related companies were revoked/cancelled, a year-on-year increase of 87.05%. During the same period, 4.6348 million new registrations were added, and the growth rate of cancellations and cancellations was nearly twice that of new registrations. At least 27 beauty brands will announce bankruptcy or adjustment in 2023. These data indicate that the cosmetics industry is undergoing profound changes, with the era of excessive profits coming to an end and the industry entering a new development cycle, which will continue to be under pressure in the coming years.
Affordable consumption has become the mainstream trend
At present, there are many similarities between the domestic consumption environment and Japan's economic transformation period after the 1990s, such as a decline in economic growth rate, a revision of residents' income growth expectations, a historical high in residents' leverage ratio, an aging population, and a natural population growth rate entering a "negative growth" era. This makes the consumption trend in Japan after the 1990s have important reference significance for the domestic consumption trend in the next 10-20 years, and affordable consumption may become a characteristic of the consumption market era in the next 20 years.
In the cosmetics industry, in recent years, consumers have been increasingly calling for affordable and high-end cosmetics to remove the charm of big brands. In 2024, the trend of affordable goods becoming the mainstream in the cosmetics market is evident, with the market share in the low price segment continuing to expand, and sales reaching 1.24 billion units, a year-on-year increase of 2.9%.
Some affordable brands have experienced significant growth in the Chinese market. In the first half of 2024, Kong Fengchun's operating revenue was 116 million yuan, a year-on-year increase of 145.95%, with a net profit of 5.5289 million yuan, a year-on-year increase of 394.59%; The revenue of Miyuequan increased by 80% year-on-year; As of 2024, Babela's sales have exceeded 800 million yuan, an increase of over 20% compared to the same period last year; Shipenei's sales this year have increased by an average of about 30% compared to the past three years. The global skincare market is also showing a trend of mass market over high-end, and the downward trend of industry consumption exists in many regions, indicating the growth of the affordable beauty market worldwide.
Industry response strategy: meticulous cultivation for development
In the era of "intensive cultivation and continuous flow", practitioners in the cosmetics industry need to actively adjust their strategies. Firstly, we need to adjust our mindset, lower our expectations, and become a long-term thinker. Starting from 2023, cosmetics brands will enter a period of major reshuffling, with most brands experiencing tight profit margins. The era of excessive profits is gone forever, and the future return cycle will be extended. Practitioners should accept a long-term stable and steady development path with steady progress.
Secondly, we need to refine management and enhance product strength. Products are the core vitality of a brand. With the diversification of consumer demands and the continuous increase in the threshold of the cosmetics industry, the requirements for product research are becoming increasingly extreme. In the future, the industry will enter a stage of refined management and high specialization. Product strength does not simply refer to the number of functions, but rather the degree to which the product meets consumer needs, the excellence of the single product profit model, and whether it can create explosive products to drive brand strength enhancement.
Finally, we should focus on pragmatic quality and ultimate cost-effectiveness. In the market environment of low profit, high cost-effectiveness, and high efficiency, more and more consumers tend to "replace big brands". In recent years, most brands that have maintained efficient growth have taken this step correctly. The cosmetics industry has resilience. Only by bidding farewell to extensive development, actively embracing change, and entering the era of intensive cultivation can we maintain vitality and achieve sustainable development in the industry transformation.
