“Everyone says Chinese domestic beauty brands are on the rise, but is the path of Tuke really the right one for them?”
Let’s take a look back at the global beauty industry in 2023.
2023 was a year of recovery for China’s beauty and personal care market, and also a year of the rise of domestic beauty brands.
According to data released by the National Bureau of Statistics, in 2023, China’s total retail sales of cosmetics reached 414.2 billion yuan, with growth rates returning to the levels of a decade ago.
And in this year, with the release of the 2022 TikTok Shop global sales rankings, SKINTIFIC, founded by Guangzhou Feimei, established its dominance in the TikTok Shop beauty sector with a breakthrough GMV of over $50 million.
Its account Skintific_id boasts more than 2.8 million followers, ranking first in the global influencer sales leaderboard.
The small shops it opened in Indonesia and Malaysia also won the sales champion titles, becoming highly popular among Southeast Asian beauty consumers, and has virtually become the “Perfect Diary” of Southeast Asia.
SKINTIFIC’s TikTok shop account Image source: TikTok
Also in this year, the export share of Korean beauty and personal care products to the Chinese market saw its fifth consecutive year of decline, dropping from 24% in 2018 to 13% in 2023, with major Korean beauty and personal care brands beginning to withdraw from the Chinese market.
A typical example is Papa Recipe.
Papa Recipe is a natural skincare brand from Korea, established in 2012. It was once extremely popular, selling 100 million facial masks a year, with nearly 90% of sales concentrated in China. It even signed Fan Chengcheng as its spokesperson, and at its peak (2020), its annual retail sales reached the 2 billion yuan level.
Yet, such a beauty and personal care brand suddenly announced on December 31, 2023, that it would cease operations of the Papa Recipe brand in China and close its stores on platforms such as Tmall, JD.com, and Douyin.
In fact, if we think carefully about the current situation of China’s beauty market, Papa Recipe’s withdrawal is not sudden.
As the domestic market continues to rise, the influence of domestic products keeps growing, and consumers have more trust and preference for domestic brands. In this process, the status of Korean beauty in consumers’ minds has gradually declined, and Gen Z consumers now have more choices. In addition, domestic beauty brands actively seize the dividends of live-streaming e-commerce, attracting a large number of consumers.
Just as netizens say, Chinese aesthetics are beginning to influence more young consumers, and Japanese and Korean aesthetics are no longer the mainstream.
This statement actually holds true even in overseas markets.
According to data recently released by the General Administration of Customs, in 2023, China’s exports of beauty, cosmetics, and personal care products reached 45.8 billion yuan, a year-on-year increase of 22.8%. Among them, Southeast Asia is the main export destination for Chinese beauty products, and in recent years, beauty products imported from China have shown explosive growth in the Southeast Asian market.
In addition to emerging brands such as SKINTIFIC, FOCALLURE, and SACE LADY making a mark in the Southeast Asian market, some well-known domestic brands like Betteni, Shanghai Jahwa, and Perfect Diary have also entered the Southeast Asian market.
For example, Betteni established a Southeast Asia operations center in Bangkok, Thailand in 2023, covering multiple markets such as Indonesia, Singapore, and Thailand through e-commerce platforms like Shopee; Shanghai Jahwa also set up an overseas business division to actively expand its overseas business.
This is enough to show that the rise of domestic products is enabling China’s beauty and personal care market to achieve reverse export.
Now let’s return to the initial question:“Is Tuke really the right path for Chinese beauty brands?”
The answer may already be self-evident.
The rise of Chinese beauty and personal care brands brings not only strong vitality to the industry, but also fierce internal competition. Rather than struggling in the domestic industry, early planning for overseas markets may be another path that new era brands prepare for themselves.
Just like Korean brands such as Papa Recipe entered the Chinese market back then, when local products cannot meet the needs of the target group, foreign products become the best choice.
However, Tuke in the new era is slightly different from before. The explosive popularity of social media platforms like TikTok has made overseas expansion more focused on content marketing, followed by localization, and then multi-channel layout.
Therefore, reckless exploration is not advisable; sometimes reasonable cooperation and operation with overseas service providers is the right answer.
For example, domestic OEM factories and other B2B brands can fully leverage their flexible supply chain capabilities, cooperate with local merchants through TikTok, and compete in the international market with extreme cost-effectiveness.
Wasn’t there a saying circulating in 2023,It’s not that A is unaffordable, but that B offers better value for money.
The explosive popularity of platforms like SHEIN and Temu under Pinduoduo is enough to show that overseas consumers’ pursuit of value for money is no weaker than ours.
Moreover, compared to OEM factories creating their own brands, the cooperative OEM model may be more popular for beauty industry expansion overseas. This model can fully utilize the professional skills and experience of OEM factories, while also reducing risks and costs for brand owners.
However, regardless of the approach, TikTok, as a social media platform that has exploded overseas, is an unavoidable and important path for brand promotion abroad.
Moreover, by Tuke through TikTok, whichever path is chosen, there are more options available.
Currently, the overseas expansion of China’s beauty industry is still in its early stages, especially in countries such as Indonesia, Malaysia, Thailand, and Vietnam. Due to rapid economic growth and the penetration of e-commerce channels, the trend of beauty brands Tuke is becoming increasingly evident. It is expected that in 2024, this trend will continue and attract more merchants and brands to join the expansion into overseas markets.