“I am very proud. I never expected that a Chinese cosmetics brand would be so popular in France.”
“To put it bluntly, at that time, tears were already welling up in my eyes,” recalling the day when the Herborist flagship store in Paris opened, many members of the Herborist management who had been involved in the store’s preparation could not hide their excitement and joy.
On April 17, 2015, Herborist’s first overseas flagship store opened at 38 Avenue de l’Opéra in Paris, becoming the first Chinese cosmetics brand to open an independent store in an international core business district. It set a height that was difficult to surpass in the short term for Chinese domestic cosmetics going global. In the past decade, no other brand has replicated that.
However, recently, CHAILEEDO learned through the Shanghai Stock Exchange that Shanghai Jahwa responded to investor inquiries by stating, “Herborist flagship store in Paris has been closed.” This news immediately sparked discussions within the industry. Some seasoned industry insiders believe that this signifies the end of an era, as Chinese domestic cosmetics going global is entering a new phase.
So, in the current climate where Chinese domestic cosmetics going global is thriving, why did Herborist close its store in Paris, France? What implications does this have for Chinese domestic cosmetics going global? To answer these questions, CHAILEEDO conducted interviews with several key decision-makers who were involved in and witnessed the opening of Herborist’s store in Paris, aiming to reveal lesser-known details behind this bold move into international markets and pave the way for Chinese domestic cosmetics going global.
The store was closed around 2020, and it was once a milestone for Chinese domestic cosmetics going global.
When it comes to Chinese domestic cosmetics going global, Herborist is an unavoidable mountain.
Around 1998, Ge Wenyao, who was in charge of Shanghai Jahwa, faced remarks from a senior executive of a multinational beauty company criticizing the lack of originality and competitiveness of Chinese products. He began to create high-end Chinese domestic cosmetics brands, one following a completely Westernized route named Distance and the other being Herborist—a brand that embraced pure Chinese elements, positioning itself with traditional Chinese herbal medicine.
However, Herborist, with the mission to build a high-end Chinese cosmetics brand, did not have a smooth journey going global.
In 2006, Shanghai Jahwa, which had already established a joint venture company with Sephora in China, aimed to enter the French market with Herborist through Sephora. However, Sephora preferred to introduce Herborist as a body care brand in France, only selling hand, foot, and neck care products. Afterward, Herborist redesigned its brand positioning and packaging, eventually officially launching in France as a skincare brand in Sephora in 2008.
Shortly after, Herborist delved deeper into foreign markets, rapidly expanding its sales points in France and subsequently landing in countries like Spain and Italy. In 2013, Herborist entered the German market by collaborating with Douglas.
In 2015, Herborist reached a “highlight” moment in its globalization journey by successfully opening its first overseas flagship store in Paris, becoming the first Chinese cosmetics brand to establish an independent brand store in a core business district in Europe and America.
“Everything fell into place.” Li Meng, who had served as the Herborist brand manager and director of brand development at Shanghai Jahwa, described the opening of the Herborist flagship store in Paris to CHAILEEDO as, “Because before this, we had already established very good distribution channels in Europe.”
However, while Herborist was overcoming challenges abroad, it was facing crises in the Chinese domestic market. Factors such as a lack of new product launches for a considerable period of time and challenges in Chinese domestic department store channels posed significant obstacles to Herborist’s development. Consequently, the once prominent figure in the Chinese cosmetics market, Herborist, gradually faded within Shanghai Jahwa’s brand portfolio.
In terms of specific performance, according to Shanghai Jahwa’s financial reports, Shanghai Herborist Cosmetics Co., Ltd. experienced losses four times between 2013 and 2021, with a net profit of 170 million yuan in 2021. According to Fei Gua data, Herborist has achieved sales on the Douyin platform exceeding 100 million yuan this year, with an average selling price of 200-300 yuan.
Recently, according to the Shanghai Stock Exchange communication platform eInteraction, when faced with an investor inquiry about the closure of Herborist’s Paris boutique, Shanghai Jahwa responded, stating, “Currently, Herborist’s Paris boutique has closed.” This marks the official “closure” of this milestone in Chinese domestic cosmetics going global.
In response, CHAILEEDO promptly contacted several key participants involved in the opening of the Herborist flagship store in Paris to further understand the information behind the closure. Among them, Li Meng, who was involved in planning the entire process of opening the Herborist flagship store in Paris, disclosed to CHAILEEDO, “That store has been closed for several years now. I remember we signed a five-year lease, and it expired around 2020.”
At the same time, Herborist’s position within the Shanghai Jahwa brand portfolio is no longer a top priority. At the recent annual shareholder meeting, Shanghai Jahwa’s CEO and General Manager Lin Xiaohai categorized the brands under Shanghai Jahwa into tiers, with competitive and clearly positioned brands like Liushen and Dr. Yu in the first tier, while Herborist and Maxam were placed in the second tier, to be promoted as the “ultimate value-for-money” choices among Chinese domestic brands.
Many details of the store opening are disclosed for the first time, marking a marketing effort that yielded results far exceeding the investment.
It is worth noting that following Herborist, there hasn’t been a Chinese domestic cosmetics brand in nearly a decade that could match its achievements in going global. In response to this, CHAILEEDO interviewed several key decision-makers deeply involved in Herborist’s international expansion, aiming to uncover more details about Herborist’s journey abroad and explore the real themes behind Chinese domestic cosmetics brands going global.
“Upon hearing this news, there must be a myriad of emotions, a deep sense of pain inside.” Upon learning of the closure of Herborist’s flagship store in Paris, Li Huiliang, former Deputy Director of Research at Shanghai Jahwa and Director of the Herborist Institute of Chinese Herbal Medicine, sighed repeatedly. He led the team in developing the Herborist Tai Chi series products, laying a solid product foundation for Herborist’s international expansion.
In the eyes of many key decision-makers at that time, the success of Herborist’s international expansion was closely related to its positioning, product features, management decisions, and even the era it was in, a result of perfect timing and favorable circumstances.
“The rent for the Paris storefront was much lower than our flagship store in Shanghai at the time, which made opening a store overseas feasible for us.” Li Meng revealed to CHAILEEDO, “The rent for the Paris flagship store was only a third of that of the Herborist flagship store in Shanghai at the time, just over a hundred thousand yuan, much lower than imagined.”
In addition to lower costs, according to Qian Qi, General Manager of Hangzhou Mei Yitian Brand Management Co., the time when Herborist opened its flagship store in Paris was the best environment for going global. “Now the external environment has changed, and various factors are not so favorable.”
It is worth noting that apart from lower costs and favorable external conditions, Herborist’s high-end positioning, rooted in traditional Chinese herbal skincare with unique product designs, made it a distinctly Chinese brand with a strong Eastern cultural influence. This undoubtedly piqued the local market’s curiosity about Chinese culture and gave Herborist higher visibility in the earlier and more mature European market.
“We redefined the brand’s positioning clearly, focusing on Eastern culture, and then we promoted products like Tai Chi Mud, emphasizing Eastern elements such as yin and yang balance, which foreign consumers found very interesting and mysterious,” Li Meng explained to CHAILEEDO.
In fact, in terms of both cost investment and brand benefits, according to several former decision-makers at Herborist, initiatives like opening the flagship store in Paris brought returns far exceeding the investment.
Kong Hua, former Senior Director of CS Channel at Shanghai Jahwa’s Herborist Business Unit, told CHAILEEDO, “The early sales performance of Herborist’s Paris flagship store was not bad, essentially maintaining a balanced income and expenditure status, and it provided strong support for our brand promotion and channel development in China, bringing very positive publicity effects.”
Wang Zhuo, former General Manager of Shanghai Jahwa and Chairman of Herborist Company, summarized to CHAILEEDO, “Herborist offers three insights for Chinese domestic cosmetics brands going global: differentiation, being different from brands and products in the target market; mainstreaming, entering mainstream channels and targeting mainstream audiences; dynamism, adapting and innovating according to market changes, constantly improving and progressing.”
Chinese domestic cosmetics going abroad face obstacles and a long road; the value questioning behind globalization
As companies like Huawei, Xiaomi, and BYD from China ride the waves in global markets, the question of when China will birth a global cosmetics brand remains a lingering inquiry in the minds of many industry players. Herborist’s exploration has already proven the potential for Chinese domestic cosmetics to establish a foothold in the European market.
In the eyes of Wang Zhuo, “When Chinese domestic cosmetics go abroad, attention needs to be paid to three Ds. One is Dynamic, emphasizing dynamism to keep pace with the times, avoiding being stuck in old ways. The second is Direct, reaching consumers directly as platforms and technology are ready, striving to establish new business models instead of clinging to outdated ones. The third is DEI (Diversity, Equity, and Inclusion), truly embracing diversity, equality, and inclusivity, and striving for Glocalization.”
It is noteworthy that in the past two years, there have been new changes and perspectives regarding Chinese domestic cosmetics brands going abroad, especially for leading companies in the industry. While most are cautious, they continue to explore overseas markets.
A recent statement from a top Chinese domestic beauty company executive emphasized, “Going abroad requires patience. Currently, very few Chinese companies truly have the capability to go global, because going abroad involves talent and culture. Besides the CEO, the company needs to cultivate mature talent who have worked together, won battles, and trust each other, only then can there be hope.”
“I should be leading a team to conquer the Southeast Asian market in the second half of next year; this is also a significant market,” the executive told CHAILEEDO.
Leading Chinese domestic cosmetics brand Proya is also cautious about going abroad. During the online performance briefing for the first three quarters of 2024, Proya stated, “The company’s international expansion is mainly focused on Japan, Southeast Asia, and primarily online sales, still in the exploration and trial phase.”
Recently, Proya established its European Innovation Center in France, becoming the first Chinese domestic cosmetics company to set up an innovation center in Paris. Some believe that this innovation center may pave the way for Proya’s cosmetic sales in France and Western Europe in the future.
Chinese makeup brand Florasis has been active in going abroad and is at the forefront of Chinese domestic cosmetics. In September this year, Florasis officially opened a beauty counter in Paris’ Samaritaine department store, becoming the first and only Chinese makeup brand in Samaritaine and the sole Chinese makeup brand with a physical store in Europe.
Regarding the exploration of Chinese domestic cosmetics brands going abroad, Wang Zhuo stated, “Caution is good. From a values perspective, there isn’t much that Chinese domestic cosmetics can export, so instead of blindly rushing into it, it might be better to focus on internal development first. Wait until you have the necessary team and brand foundation before going out; it might be more suitable.”
“If a brand is to go abroad, the core is whether the product and brand align, rather than just aiming for grandeur. Additionally, the involvement of the CEO personally increases the chances of success,” added Wang Zhuo.
In Li Meng’s view, “The most challenging aspect of going abroad is brand positioning. I believe two types of brands are more likely to succeed in going abroad: those with differentiated brand positioning, like Florasis exploring and expressing its own take on Eastern culture, and those with personal IP attributes, brands that come with their own following, like Fan Beauty by Fan Bingbing.”
According to insider sources speaking to CHAILEEDO, Fan Bingbing recently established the overseas headquarters of Fan Beauty in Singapore, forming a dual-headquarters model with Beijing to better expand globally.
In reality, unlike traditional trade-oriented goods going abroad, the exploration of Chinese domestic cosmetics in overseas markets faces the challenging proposition of brand strength, making “Chinese cosmetics going abroad” always intertwined with complexity and a hint of tragedy. The departure of Herborist’s Paris flagship store serves as a reminder of the arduousness and challenges faced by Chinese domestic companies going global. However, this does not deter Chinese domestic cosmetics from going global and solidifying their determination to become global brands.
