There is no doubt that 2021 is the most tragic year for new consumer make-up brands. The market is cruel and no one knows which one will come first, “death” or opportunity.

According to the latest statistics of the CBO reporter,the "death list" of beauty brands has been growing larger from January to December this year. From the perspective of category, the new emerging domestic make-up brands aged 3-5 years have suffered "heavy casualties", and there is no shortage of imported brands that have withdrawn from the Chinese market.

01

Domestic Make-up Brands Suffer "Heavy Casualties"

More Than10 Brands Have Closed Down

The withdrawal of ApinkBaby and Two Space from the market at the beginning of the year marked the beginning of the collapse of domestic cosmetics brands, especially new emerging make-up brands.

The most surprising case is about House of Cards,a domestic make-up brand launched by NYSCPS in March 2020. Less than one month after its products were launched, House of Cards won RMB 20 million in its Pre-A round of financing, but it also fell flat quickly. In July this year, the brand completely cleared its inventory and returned its Tmall flagship store with more than 20,000 fans back to NYSCPS. The reporter learned that its bankruptcy was due to the fact that "the NYSCPS company could not afford to invest more into the House of Card brand and the company had to give up on the makeup sector. The competition in beauty and make up is fierce. Despite the brand’s hard work a lot of its products ended up in the warehouse because the colors are too ‘European and American".

Founded in 2020 and styled with lolita culture,Romance Baby Bear,which had aimed to "create a more thorough lolita beauty brand", issued a closing letter in August this year. Clearance is still in progress now.

 

Tangshi Yayun was founded in 2019 with an ambition "to interpret the prosperity of the Tang Dynasty with modern aesthetics",but ended up closing down due to its long mold production period, shortage of funds, and failure in promotion.

 

Pico tico, a three-year-old brand, closed down in October this year. The brand was obscure from beginning to end. Even after its clearance, there was also lots of negative reviews. "The products are not worth it. Let me put it this way. If I bought its products at the original price, I would be a fool, but if I bought it at the time of its clearance, it would be acceptable"

The same is true of OXFOR, an independent make-up brand founded in 2019. From its birth in 2019 to its collapse at the beginning of this year,everything has been so quiet that it can be only found on second-hand e-commerce platforms now.

 

Partial Sweet,founded in 2020,was still in its clearance stage on Pinduoduo platform as of December 15. The founder of the brand @Bo Ji Yi Da Kou (sweet kiss) shared her failure in her video on Xiaohongshu,stating that RMB 400,000 almost ‘went down the drain’.

In 2019,Miansen,a domestic leading cosmetic cotton brand,launched its own make-up brand: Qingzhuang Riji. Due to its poor operation, it is less popular than other domestic brands. It can be seen from the single items on the flagship store shelves that Miansen has given up the category of make-up products and returned to make-up tools.

 

Swedish make-up brand oden's eye was founded in 2017. Its make-up items are priced somewhere between 20-35 euros (RMB 154-270). Nominally, it is a Swedish brand. But the ownership of the third category of trademarks belongs to Nantong Insomnia Cat International Trade Co,Ltd, and its new Destiny Goddess series is outsourced to Zhejiang Yifei, which makes it look like a new domestic brand in terms of color and product. In 2020 oden’s eye started to sell products in WOW COLOUR. There is debate in beauty circles about whether oden’s eye is actually a Chinese brand in the "disguise"of an imported brand. Regardless of the debate, the brand’s TMAll flagship store has disappeared this year. 

 

“With the skin gone, to what can the hair attach itself?” The beauty blogger Dong Zichu's private brand CROXX did not survive, either.

In September, with nearly 3 million fans, beauty blogger Dong Zichu’s Bilibili and Douyin accounts were banned by the platforms. His private makeup brand CROXX also announced withdrawal from the market. Founded in 2017, CROXX, with its niche and strong design style, triggered a "dark-black" trend and was nicknamed "Gunala Goddess" by netizens, attracting 960,000 fans. Now, clearance is now taking place in Tmall and Douyin live streaming studios.

In another case Xiamen MEIYI Beauty Co., Ltd., listed on NEEQ (National Equities Exchange and Quotations) has shut down its three major beauty brands. The following are the three brands:  First, the MumaSunny of @Lin Shanshan_sunny private brand store on Tmall was temporarily closed in November; second, after two years and seven months of operation, icefancy issued an announcement on brand shut-down in December 2021 due to Force Majeure.

Third, the HAZEL FEEL brand created in 2017 by the beauty blogger @zz who has 3 million fans has “multi-color series” as their product core. The brand launched monochrome eye shadow as their first product and thus "grasped the opportunity of the first wave of domestic makeup". Besides his two stores on Taobao series, in 2018, the beauty blogger was invited to open up his his two stores on Taobao series, and in January 2020, his brand moved into WOW COLOUR... Four years later came the decision to shut down the brand. @zz explained on Weibo: "There is no profit due to the low prices. Other major make-up brands are launching new products too fast, and I just can't manage to survive."

Besides the enterprises that have closed down, there are still many enterprises struggling to survive.

Some brands are temporarily put on hold. Woodz Beauty is one of the lucky ones. Consumers who rushed in before its collapse "saved its life". The founder said that if the new theme can be implemented, we can bring better products back. At present, there is only one product available in the store, Miss Peach Ten-color Eye Shadow Tray, which costs RMB 45 and sells out 400+ pieces per month, and it has moved into Sanfu Department Store offline.

 

Some brands fought their way out. At the beginning of the year, due to the impact of the pandemic, Dramo had a clearance sale before its closing down.When the news broke out among beauty lovers, a large number of consumers rushed into the store and successfully saved it. At present,Dramo has launched its latest product line "Moon Season”.

 

There are three reasons why many new emerging domestic brands collapsed in 2021.

First, the make-up There are three reasons why many new emerging domestic brands collapsed in 2021. has high requirements for the aesthetic of products and the original innovative brands all want tocreate their own molds, which means a series of uncontrollable factors such as high cost and long cycle for start-up brands.

As the brand Partial Sweet wrote in its closedown notice, "At first, we believed that make-up was very simple. When we really stepped in, we found that we had to face so many issues.(texture, color, shell, packing box, express delivery, etc.). We admire some small domestic brands that still hang in there for their courage."

In comparison, skin care products rely on efficacy and customer trust to open up its market, which is on a more long-term basis, make-up products depend  on fashion, word of mouth, etc., which is on a more short-term basis. 

In the beauty industry, the development cycle is defined as "Big Six and Small Three", i.e., big categories are updated every six months, and small categories and small items are updated every three months. But for start-up beauty brands, time is money.

Second, if the brands choose general packaging materials instead of creating their own mold, the products will inevitably become homogeneous, and entrepreneurs will "produce" make-up brands in batches with similar formulas. One of the major consequences of homogenization is that the phenomenon of "substitution" will occur one after another with strong substitutability and the brands will fall into a "price war". Without reasonable gross profit to invest into  supplier selection and product quality improvement, it is impossible for brands to embark  on a positive cycle. 

Third, as the cost of online customer acquisition has gone up, promotion and conversion to actual customers has become more difficult.Compared with skin care products, make-up products have low consumer loyalty, and at the same time new make-up products emerge one after another in the market. Make-up brands need to be constantly innovated and continuously promoted and marketed to maintain sound volume and activity. 

Without exception, Nowadays all new brands start from online. With the increase of online customer acquisition cost, the promotion budget of new brands is generally around RMB 20,000 per month,and the traffic to customer conversion rate is questionable.

Many brands have very little voice on social media platforms, and many of them attract attention and trigger discussion after the brand closure. "In recent years, many domestic make-up brands have been obscure from the beginning to the end, and the only occasion when they attract attention is at the time of closedown and clearance." The founder of Tangshi Yayun expressed in frustration on a social media platform.

Probably from the beginning of 2016 when the government issued restrictions to South Korea products, Chinese consumers shifted demands from fair priced makeup products from Japan and south Korea to Chinese domestic brands. Domestic make-up brands witnessed a sudden rise. Consumers were carried away by the publicity of "the light of domestic products". Entrepreneurs also discovered the opportunity in the domestic makeup market from the success of Perfect Diary and Florasis and swarmed into the market, making the competition on the make-up market particularly fierce.

On one hand, new emerging skin care and oral care brands frequently get financing; on the other hand, domestic make-up brands collapse one after another, and the road for new domestic cosmetics is particularly difficult under the impact of the pandemic. 

02

Some Choose to Give up on Offline 

and Some Choose to Make a Complete Withdrawal

This year has been quite difficult for domestic brands, and it has also been difficult for some of the imported brands.

Recently, many consumers posted on Xiaohongshu that Kate counter in their city is being closed down with clearance sales . The staff of Kate brand said that the company has not received such information for the time being, and if the company issues an announcement in the future, the official announcement will prevail. However, although business is slow in offline stores, Kate's online flagship store is still operating normally. According to industry insiders, Kate will engage fully in online operation in the future.

In the past two years, ETUDE HOUSE, which “shares the same mother” with Innisfree, has entered the phase of "large-scale store closedown" in China. Phase offline stores of ETUDE HOUSE in China are closed down, but consumers can still place orders online through official channels such as Tmall and WeChat Mall.

In addition to the well-known brand ETUDE HOUSE which has given up on the Chinese market, there are many niche brands that have turned around and left after getting their feet wet through cross-border e-commerce in this market.

AURELIA is an example. It is a microecological skin care brand focusing on skin health, which was founded in 2013 with a focus on probiotics. In September 2020, the UK-based brand entered the Chinese market through e-commerce. In July 2019, it was acquired by Hong Kong H&H Group (H&H International Holdings) (the well-known Swisse is also in the same group). So far, its official overseas flagship stores have accumulated 50,000 fans. Its closedown notice mentions no reason and only promises normal after-sales service, The customer service staff said that "the closedown of the store was due to Force Majeure". 

 

Also on this road there is NOVEXPERT, a pure skin care brand from France, NOVEXPERT focuses on 100% natural formula as all product ingredients are extracted from pure natural raw materials. In 2015, NOVEXPERT entered the Chinese market. It once made its way into Sephora China system. Currently clearance is in progress. Its customer service staff said that the reason for its closedown cannot be revealed for the time being.

 

O Cosmetics, a brand operated by Hong Kong Aroma Star International Trade Ltd. distribution company, focuses mainly on acid products. The acid content of cosmetics products is mostly between 12% and 14%. The brand is relatively niche. Currently its flagship store has less than 10,000 fans. According to its customer service staff, it is a normal process that they are closing down the store just because the distribution contract xpires, which should be related to the tightening control over “acid cosmetics products”. 

 

03

These Brands Have Closed Down Worldwide 

At the beginning of this year, Unilever's skin care brand K-BRIGHT seemed to have withdrawn from the Chinese market and started clearance. K-BRIGHTis a South-Korea-series luxury skin care brand launched by Unilever in 2018. It is also the only brand independently developed by Unilever in the period of Unilever’s numerous incubations and acquisitions in recent years. K-BRIGHT’s official accounts of Weibo and WeChat and INS have no longer been updated, and it can not be found at Unilever's global official website.

 

This February Estee Lauder Group announced that it would close down Becca in September. Becca is a makeup brand acquired by Estee Lauder for USD $230 million 4 years ago. This closure was commented by netizens as “the fall of the goddess”. In April, Estee Lauder Group announced that it would gradually stop the related business of its luxury skin care brand Rodin Olio Lusso.  

Just like Becca, makeup brand Les Merveilleuses Ladurée is also “tears of the era”.  Les Merveilleuses Ladurée captured thousands of beauty lovers with its “Ladurée rose face color” has suspended its sales since December 19. Its official website officially closed on December 31 and its sales channels worldwide will be closed one by one.

 

On November 4 Tati Beauty, a vegan and cruelty free makeup brand founded by top beauty blogger Tati Westbrook, closed down two years after its establishment.

The year 2021 is undoubtedly a "reborn" experience for all brands. In 2022 how to build a real brand from online celebrity, to long term celebrity, to a good brand remains an issue that requires hands-on practice of new generations of brands.