As of now, multiple domestic beauty brands have released their first-half performance reports. Proya, Shanghai Jahwa, Maogeping, and Shui Yang achieved double growth in both revenue and net profit, while Betani and Huaxi Biology continue struggling with growth difficulties, and Yatsen Holding Limited remains on the edge of losses. As the traffic dividend period fades, the challenges facing domestic beauty brands have surfaced. Multi-brand strategies, premiumization, overseas expansion... various beauty brands are revealing their cards. As competition in the domestic beauty market enters the second half, whoever can find the breakthrough solution first will gain the upper hand in future competition.
Maogeping's Net Profit Growth Yatsen Holding Limited's Continued Losses
Looking purely at performance data, Shanghai Jahwa showed outstanding results in the first half, with revenue of 4.108 billion yuan, up 17.3% year-on-year; net profit of 524 million yuan, up 30.65% year-on-year. Its main brand Herborist supported the majority of performance. Also performing well in the first half were Maogeping and Shui Yang. According to financial reports, Maogeping's first-half revenue reached 2.588 billion yuan, up 31.3% year-on-year; net profit of 670 million yuan, up 36.1% year-on-year. Shui Yang's first-half revenue was 2.5 billion yuan, up 9.02% year-on-year; net profit of 123 million yuan, up 16.54% year-on-year. Compared to the same period last year, Shui Yang's net profit decline has eased.
Compared to the growth rates of the above beauty brands, domestic beauty leader Proya performed "moderately." Financial reports show that in the first half of this year, Proya's revenue was 5.362 billion yuan, up 7.21% year-on-year; net profit was 799 million yuan, up 13.8% year-on-year. However, compared to previous years, Proya's revenue and net profit growth rates show a slowing trend.
Some rejoice while others worry. In the first half of this year, Betani, Yatsen Holding Limited, and Huaxi Biology remained trapped in growth difficulties. According to financial reports, Betani's first-half revenue was 2.372 billion yuan, down 15.43% year-on-year; net profit was 247 million yuan, down 49.01% year-on-year. Yatsen Holding Limited's revenue was 1.92 billion yuan, up 22.48% year-on-year; net loss was 22.97 million yuan, narrowed year-on-year. Huaxi Biology, whose functional skincare business accounts for over 40% of revenue, delivered its worst half-year report with revenue of 2.261 billion yuan, down 19.57% year-on-year; net profit of 221 million yuan, down 35.38% year-on-year. Among these, skincare product business revenue was 912 million yuan, down 33.97% year-on-year.
Betani Group's Public Relations Director Zhong Wei stated that in the first half of this year, against the backdrop of overall industry transformation and intensified competition, the company actively promoted strategic adjustments and operational optimization, focusing on high-value products and high-quality growth, while temporarily reducing inefficient promotions and resource investment. Although this strategy had some impact on short-term revenue, it successfully drove steady improvement in gross margins and significant improvement in operating cash flow, with continued optimization of inventory and asset structure, significantly enhancing operational resilience and health.
Yatsen Holding Limited representatives stated that the group continues to drive strategic transformation, adhering to an "innovation-driven" growth logic, continuously optimizing category structure through R&D innovation, and enhancing overall innovation capabilities and product competitiveness. To date, multi-brand collaborative innovation has been achieved, driving steady group performance growth.
Senior beauty commentator and founder of Meiyun Space E-commerce Bai Yunhu stated that behind the slowdown and decline in domestic beauty performance, on one hand, the overall growth rate of the cosmetics industry sector faces a slowing situation; on the other hand, intensified competition between leading enterprises and market brands, including the entire cosmetics market covering skincare and makeup, faces competition for users and product marketing.
Betani's "Two-Pronged Approach" Shanghai Jahwa Caught in "Price War"
Reviewing various financial reports, it's not difficult to find that the domestic beauty industry shares a common characteristic—the era of high marketing and high growth is becoming a thing of the past. Meanwhile, brands face a common problem: how to grow after traffic dividends disappear.
Around 2021, domestic beauty was in a period where marketing investment yielded high returns. That year, Betani's revenue and net profit grew over 50%, Proya's revenue and net profit growth exceeded 20%, and Shanghai Jahwa's net profit grew over 60%. It was also during this period that high marketing became a key discussion point for domestic beauty brands. However, as traffic dividends receded in recent years, the difficulties facing domestic beauty companies have surfaced. Betani fell into growth difficulties, Yatsen Holding Limited continued losses, Huaxi Biology's functional business frequently declined, and Proya's growth slowed...
Market changes are most apparent to companies. Beauty companies at this time clearly know that to continue growing, they need to look at strategic layouts beyond marketing. Multi-brand development is one of Proya's strategies, which has led the industry to frequently discuss whether it's replicating the Anta model. In recent years, Proya has successively acquired makeup brand Caitang, Spanish brand St. Gallen, personal care brand "OffRelax," high-efficacy skincare brand "CORRECTORS," and expanded into medical devices by launching medical dressings. When the cultivated second brand Caitang can support performance growth (Caitang's revenue accounts for over 10%), the overall performance scale supports the title of domestic beauty leader, and Proya is building moats through multi-brand strategy.
Shui Yang focuses more energy on premium positioning. In recent years, recognizing that growth as an online brand has peaked, Shui Yang began premium transformation, successively acquiring French premium brand Ifedan, French mid-to-high-end brand PierAuge, and controlling stake in American luxury skincare brand ReVive, forming a premium beauty lineup centered on Ifedan, PA, and RV. Betani is simultaneously pursuing both multi-brand and premium strategies. Zhong Wei stated that the company has built a clear multi-brand matrix and is gradually releasing synergistic effects. Besides main brand Winona, premium anti-aging brand Acmedcare's revenue grew 93.9% year-on-year, Winona Baby maintains leading growth in the infant skincare track, and brands like Beafutin are steadily advancing in their respective segments. In the second half, the company will continue adhering to dual-drive of internal incubation and external expansion, implementing differentiated resource allocation and cultivation strategies based on each brand's stage, with key focus on strengthening high-potential tracks like premium anti-aging and infant skincare, continuously improving brand ecosystem and business boundaries.
Shanghai Jahwa relies on price advantages to find breakthrough solutions in the affordable market. Herborist's 399 yuan low-price sets dominated Douyin channels, with the brand achieving revenue of 3.344 billion yuan in the first half, up 14.3% year-on-year, accounting for over 80% of revenue and supporting Shanghai Jahwa's high growth. However, this has also put Shanghai Jahwa under scrutiny for engaging in "price wars."
In the view of Zhou Ting, Dean of Yaoke Research Institute, low-price competition has little potential for subsequent development. As consumers become smarter and more rational, it will cause companies' costs of obtaining sales through traffic to increase dramatically, lacking sustainability.
Expanding Overseas Markets Participating in Global Competition
Whether multi-brand or premiumization, a review reveals that domestic beauty brands share a common direction—seeking overseas growth opportunities.
Recently, Proya announced plans to issue overseas listing shares (H shares) and list on the main board of The Stock Exchange of Hong Kong Limited. Proya stated in its announcement that this move aims to accelerate the company's internationalization strategy and overseas business development, enhancing the company's overseas financing capabilities. In May this year, Proya founder Hou Junchen announced at the annual shareholders' meeting that the company will launch overseas M&A through its Paris branch, focusing on infant care, fragrance, and men's skincare segments.
In Bai Yunhu's view, for Proya, globalization is both the optimal path and necessary route to achieve its "Double 10" strategy, as most international beauty conglomerates have validated this successful model. For rising Chinese beauty companies, besides occupying a dominant position in the domestic market, participating in global competition is also an inevitable choice for companies to grow stronger.
Betani has also continuously accelerated overseas market expansion in recent years. Zhong Wei stated that the company has systematically established regional headquarters in Thailand and other areas, conducting product registration, channel development, and localized operations. Products have gradually entered local mainstream KA channels, medical aesthetic clinics and other retail channels, initially building brand awareness through social media platforms, with sales steadily developing at Mannings stores in Hong Kong and Macau.
In May last year, Yatsen Holding Limited invested over 80 million yuan to officially open the Yatsen Global Innovation R&D Center in Shanghai. Additionally, Yatsen Holding Limited representatives revealed: "Perfect Diary launched overseas business in 2020, entering Shopee, Southeast Asia's largest e-commerce platform. In 2022, Perfect Diary launched in the Japanese market and entered offline beauty retail stores in 2023. Simultaneously expanding North American markets."
Shui Yang has also stated that it has initially achieved global expansion, including brand globalization, R&D and supply chain globalization, market and channel globalization, and organizational capability globalization, constructing a new label as an "emerging luxury beauty brand management group" with preliminary globalization.
"Compared to globally-oriented international beauty conglomerates like L'Oréal, the biggest challenge facing domestic beauty brands is 'insufficient strategic brand structuring' and 'low brand user value' issues. This requires strengthening 'brand layout and user value enhancement.' Capital investment, M&A, and brand user operations will become the main development directions for domestic beauty brands in coming years," Bai Yunhu believes.