By Luna Jade – Global Beauty Analyst with more than 10 years of industry experience, providing evidence-based insights on the Chinese beauty market
A Market at a Crossroads
The Chinese beauty market is entering a period of profound transition. After years of rapid expansion driven by rising consumer incomes, social media-fueled beauty ideals, and the “self-indulgence” (悦己) consumption trend, 2024 marked the first decline in market size since the pandemic. According to data from Qingyan Intelligence, the market value fell to 774.6 billion RMB (approximately USD 107 billion), down 2.8% from 2023.
<Source: Yangtze Evening Post>
This shift signals more than just a temporary slowdown—it represents a structural turning point. While consumer demand is becoming more diversified and competition intensifies, market saturation has forced many brands to rethink their strategies. The slowdown has pushed global companies and domestic challengers to compete on innovation, emotional branding, and regional expansion rather than sheer scale.
At the same time, certain categories are defying the slump. Online channels have grown slightly, accounting for 52.5% of total sales, while offline retail shrank by 6%. And while skincare and makeup both saw double-digit declines, haircare, bodycare, and fragrances posted notable gains. These dynamics reveal a Chinese beauty market in flux, where winners will be defined not by past prestige but by their agility and cultural resonance.
Market Restructuring: Growth Gaps Between Categories
Declining Core Segments
Historically, skincare and makeup have been the twin engines of the Chinese beauty market. In 2024, however, skincare revenues fell 12.5% year-over-year to 421.9 billion RMB, while makeup declined 8.1% to 156.3 billion RMB. These downturns reflect consumer fatigue, the rise of minimalist routines, and reduced discretionary spending amid economic uncertainty.
Notably, imported beauty brands have faced even steeper headwinds. China Customs data show that total cosmetic imports fell 9% in 2024 to USD 16.3 billion—the lowest in five years. Since peaking in 2021, import values have dropped by USD 8.6 billion, with French, Japanese, Korean, and American suppliers all affected. Korean exports, for example, slipped 5.5% to USD 2.24 billion.
This contraction underscores how Chinese consumers are increasingly favoring local brands that deliver comparable quality at lower price points, combined with culturally resonant storytelling and social commerce strategies.
Rising Secondary Categories
In stark contrast, peripheral categories have surged. Haircare sales soared 59.3% to 88.9 billion RMB, while bodycare rose 28.4% to 81.6 billion RMB, and fragrances grew 2.1% to 25.9 billion RMB. These categories benefit from emotional consumption trends, self-care rituals, and lifestyle positioning.
Their growth suggests that while traditional segments mature, whitespace remains for innovative niches that align with shifting consumer values—particularly products that deliver sensorial or emotional experiences, rather than only functional claims.
The Shift to Domestic and Tier 3–4 City Markets
Declining Premium Segment in Tier 1–2 Cities
From 2011 to 2021, China’s premium beauty market enjoyed a compound annual growth rate (CAGR) of 21%. But since 2021, growth has slowed sharply, dropping from 257.8 billion RMB to 236.4 billion RMB in 2024 (Goldman Sachs Research). The erosion of prestige beauty has been linked to the rise of livestream e-commerce, which has eroded department store and duty-free channels.
While livestreaming drives short-term volume, it risks diluting brand equity—especially for luxury-oriented labels that rely on controlled image management. Even global giants like Estée Lauder and L’Oréal have struggled to balance livestreaming’s scale with brand exclusivity.
Emerging Demand from Tier 3–4 Cities
Paradoxically, Tier 3–4 cities are now emerging as the growth engine of the Chinese beauty market. These lower-tier cities account for roughly 70% of China’s population and are seeing steady income growth, improved logistics infrastructure, and rising e-commerce penetration.
Goldman Sachs data show that Tier 3–4 cities contributed about 40% of premium beauty’s user base between 2021 and 2024. Department store rents are one-third to one-fifth those of Tier 1 cities, reducing operating costs, while consumers are increasingly receptive to luxury products. Brands like Lancôme and La Mer opened new counters in 2024 in cities such as Baoji (Shaanxi Province), often promoted as the “first local flagship,” drawing significant attention.
Fragrances and Aromatherapy: From Supporting Role to Emotional Core
As the broader Chinese beauty market slows, one segment is defying gravity: fragrances and aromatherapy. Once a niche category, they are now riding the wave of the “emotional economy” and self-care culture to become a core growth engine.
According to Eternal Group, a leading fragrance brand operator in China, the domestic aromatherapy market is projected to grow at a CAGR of 21.78% between 2021 and 2025, surpassing 30 billion RMB by 2026. This robust trajectory contrasts sharply with the stagnation seen in skincare and makeup, and it reveals how consumer priorities are shifting from external appearance to inner emotional well-being.
Emotional Value Drives Consumption
The rise of “self-indulgence” (悦己) consumption has reframed fragrance from a functional product to an emotional companion. The 2024–2025 China Fragrance Industry and Consumer Insight Report found that 64.2% of consumers use perfume primarily to improve their mood or relieve stress, rather than to impress others.
This shift has expanded fragrance usage scenarios from social occasions to daily life, embedding it into personal rituals of comfort and self-expression. In the context of the Chinese beauty market, this is a profound evolution: beauty is no longer only about external validation but about personal emotional satisfaction and wellness.
Livestream E-commerce Fuels Sensory Storytelling
For years, fragrances struggled online due to their sensory nature—consumers could not smell through a screen. Livestreaming has solved this by turning olfactory impressions into vivid verbal imagery.
<Source: Yangtze Evening Post>
Top livestreamer Li Jiaqi (Austin Li) has become famous for describing scents in emotionally immersive language—like calling a local brand BudingSuo’s “Xiawa” perfume “the clean scent of bare skin in the sun.” Such descriptions help viewers visualize and emotionally connect with the product, triggering impulse purchases.
BudingSuo reached 80% online sales within four years of launching, showing how powerful livestream-driven storytelling has become in the Chinese beauty market. This model enables small fragrance brands to compete with global giants without traditional offline counters.
Offline Experience Spaces Build Emotional Bonds
However, offline remains indispensable for building brand identity and deep emotional ties. Fragrance consumption is highly personalized and sensorial, making physical interaction crucial.
Chinese niche fragrance label THE BEAST (野兽派) opened its first immersive “Chinese Atelier” in Shanghai’s Xintiandi in January 2025. The store features seasonal thematic installations and Chinese floral motifs, blending traditional craftsmanship with modern scent artistry. Such experiential spaces allow consumers to embody a brand’s world, not just purchase its products.
This hybrid model—emotional storytelling online, emotional immersion offline—is now seen as best practice for fragrance players in the Chinese beauty market.
Digital-First Strategies: Social Platforms Reshape Beauty Engagement
The digital ecosystem in China has become the heartbeat of the Chinese beauty market, especially for reaching Gen Z. Platforms like Xiaohongshu (RED) and Douyin (TikTok China) are now primary discovery and decision channels for beauty products.
Xiaohongshu: Micro-Influence and Authenticity
Xiaohongshu emphasizes user-generated reviews and lifestyle storytelling, making it ideal for building trust. Beauty brands leverage Key Opinion Consumers (KOCs)—ordinary users who create authentic content—to spark grassroots trends.
For example, fragrance brands often seed products with niche lifestyle influencers who craft “emotional scenarios” such as “a perfume to de-stress after work.” This aligns perfectly with the emotional consumption trend sweeping the Chinese beauty market, allowing small labels to gain traction without heavy advertising budgets.
Douyin: Viral Commerce and Speed
Douyin, meanwhile, is optimized for rapid sales conversion. Its algorithm amplifies viral short videos, and its integrated e-commerce features let users purchase instantly. Brands that excel here often use emotionally charged hooks—like “a comforting scent for lonely nights”—to spark impulse buying.
This convergence of emotional marketing and frictionless commerce has made Douyin indispensable for new entrants trying to break into the Chinese beauty market quickly.
Omnichannel Evolution: Blurring Online and Offline Boundaries
As the Chinese beauty market matures, brands can no longer rely on siloed channel strategies. The post-pandemic consumer journey blends digital inspiration with physical immersion, requiring seamless online-to-offline (O2O) integration.
AR and VR Lower the Barrier to Entry
Augmented reality (AR) and virtual reality (VR) technologies are becoming vital tools for driving engagement. Beauty brands increasingly deploy virtual makeup try-ons, skin analysis tools, and immersive VR pop-ups to help consumers experiment before purchase.
These tools reduce perceived risk, especially in lower-tier cities where physical testers are limited, and they help bridge the sensory gap of e-commerce. More importantly, they create an emotional experience that mimics in-person interaction—an essential ingredient in the evolving Chinese beauty market where emotional value increasingly outweighs functional claims.
Offline Counters Reinforce Brand Atmosphere
Despite digital dominance, offline counters remain irreplaceable for conveying brand atmosphere and prestige. Veteran beauty analyst Bai told Sina Finance that physical spaces excel at delivering a brand’s “aura” and emotional identity, which screens cannot replicate.
New perfume brands are rapidly opening offline counters and pop-up stores, often with interactive scent zones and cultural design elements. This approach reinforces brand storytelling, fosters deeper emotional bonds, and localizes global brands to Chinese cultural contexts.
Strategic Implications for Global and Korean Brands
The transformation of the Chinese beauty market carries profound implications for international entrants, especially Korean beauty (K-beauty) players who once dominated China’s midrange segment. Winning in this new era requires rethinking product design, marketing psychology, and channel deployment.
Design for Emotional Value, Not Just Function
Consumers now prioritize emotional resonance—products must deliver “self-care,” “mood enhancement,” or “stress relief,” not just hydration or whitening. Korean brands must blend their signature aesthetics with Chinese cultural symbols and emotional narratives to stand out.
Scenario-based marketing works especially well. Campaigns like “a perfume to escape workplace stress” or “a body lotion to relax before bed” tap into real-life emotional needs, resonating deeply with Gen Z audiences.
Localize Content for Xiaohongshu and Douyin
Rather than generic ads, brands should invest in culturally nuanced content for Xiaohongshu and Douyin. This includes collaborating with local KOCs, leveraging storytelling trends, and using colloquial Chinese copywriting that mirrors native emotional expressions.
Unlike Western social media, Chinese platforms reward authenticity and emotionality over polished perfection. Brands that master this dynamic can scale rapidly within the Chinese beauty market without large budgets.
Build O2O Infrastructure in Tier 3–4 Cities
Finally, brands must physically enter lower-tier cities while maintaining digital agility. Department store rent is far lower than in Tier 1 cities, and consumer appetite is rising fast. Establishing small-format counters or pop-ups can anchor brand presence and provide touchpoints for local shoppers.
This dual presence—emotional connection online, sensory immersion offline—represents the new success formula in the Chinese beauty market.
Final Insights: The Future Belongs to Emotionally Intelligent Brands
The Chinese beauty market is no longer defined by sheer growth, but by emotional intelligence. As traditional categories saturate, the next wave of winners will be those who blend cultural sensitivity, emotional storytelling, and omnichannel presence to deliver not just beauty—but comfort, confidence, and joy.
Brands that read these signals early and adapt accordingly will not only survive this transition—they will define the next era of beauty in China.
Relevant reports:
China Cosmetic Regulations 2025
China’s Inner Beauty Boom in 2025
China Anti-Aging Cosmetics Market 2025
Method & Source Notes
This report synthesizes data from Qingyan Intelligence, China General Administration of Customs (GACC), Goldman Sachs Research, Eternal Group, Xiaohongshu (RED), Douyin, Shanghai Municipal Government, Yangtze Evening Post, and Sina Finance, along with interviews by KOTRA Shanghai Trade Office.
Data points include 2024 Chinese beauty market size (774.6 billion RMB), import values (USD 16.3 billion, down 9% YoY), category revenues, and CAGR forecasts for fragrances and aromatherapy.
Disclaimer
This article is intended for informational and journalistic purposes only.
It does not constitute financial advice, investment guidance, or commercial solicitation.
All data and market forecasts are based on third-party sources believed to be reliable, but accuracy cannot be guaranteed.
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