Uncovering C-Beauty: Growth Strategies and Market Outlook

May 2023

C-beauty brands outperformed the market in China in the last five years, particularly in skin care and colour cosmetics. Benefiting from strong digital capabilities and marketing strategies, C-beauty is winning younger consumers. However, the challenges facing C-beauty brands are how to build solid competitiveness for sustainable growth. Expansions of C-beauty brands to fragrances and overseas will bring them to compete with foreign brands in the broader market on an equal footing.

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This report comes in PPT.

Key findings

C-beauty brands overall outperform the market in China in the last five years

C-beauty brands have seen strong growth in beauty and personal care in China. Among the top 20 brands in colour cosmetics, the portion of the retail value of C-beauty brands doubled from 14% to 26% between 2017 and 2022. C-beauty brands like Winona, Proya, and Florasis thanks to their strong digital capabilities and the rising e-commerce penetration in China.

Confluence of five factors supports the rise of C-beauty brands

A group of factors has accelerated the boom in C-beauty brands in the market. A mature industry supply chain, changing consumer awareness, a highly developed digital landscape, the availability of sufficient talent, and government and capital market investment have contributed to the increase in the number and quality of C-beauty brands in China.

C-beauty brands seek solid competitiveness to extend the lifecycle

After rapid growth, a significant challenge for C-beauty brands is maintaining their performance and finding a second growth curve for a solid market position. C-beauty brands seek future growth in areas like R&D, brand value communication, and premiumisation.

C-beauty brands will compete with foreign brands in the broader market

Expansions of C-beauty brands to fragrances and overseas will bring them to compete with foreign brands in the broader market on an equal footing. However, the country-based label of beauty brands will gradually play a minor role when consumers purchase; only the products with substantive innovations will win the market.

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Key findings
Rising e-commerce penetration in China boosts the growth of C-beauty brands
C-beauty companies’ ranking climbs in colour cosmetics and facial skin care over 2017-2022
C-beauty brands are mainly priced at a mass (under USD30) price point
Confluence of five factors behind the rise of C-beauty
C-beauty brands improve product quality to tear off “dupe” labels
C-beauty brands act rapidly and flexibly to meet consumers’ volatile needs
Consumer education on ingredients and claims enables C-beauty to target consumer concerns
Synergy of digital-native brands and digital-native consumers maximises C-beauty’s growth
C-beauty brands will need solid competitiveness to extend the lifecycle
Competitive R&D and product quality are the keys to C-beauty’s sustainable growth
Embedding social values to the communication strategy helps Proya’s transformation
With mass market appearing at saturation, C-beauty companies target premiumisation
“C-scent” emerges with China consumers’ growing demand for sophisticated lifestyles
C-beauty brands actively explore expansions overseas
C-beauty has not yet developed as an influential label in the minds of global consumers
G lobal awareness of C- beauty is growing, but its association with innovation falls short
Implications for international beauty and personal care companies

Beauty and Personal Care

This is the aggregation of baby and child-specific products, bath & shower, deodorants, hair care, colour cosmetics, men's grooming, oral hygiene, fragrances, skin care, depilatories and sun care. Black market sales and travel retail are excluded.

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