Cutting down All Counters in China, Will Maybelline Save itself by Private Traffic?

Maybelline was founded in 1917 and produced the world's first modern eye cosmetic, Maybelline Block Mascara.

The Maybelline brand name is made up of Maybel, the name of the American chemist Williams’ sister, and the second half of Vaseline. Maybelline was founded in 1917 and produced the world’s first modern eye cosmetic, Maybelline Block Mascara. Today, Maybelline has become a brand that enjoys legendary global cosmetics pioneer. In more than 90 countries and territories around the world, Maybelline turned out to be a popular international brand among consumers.

In 2002, Maybelline held 19% of the global market share. In China, Maybelline is positioned as a mass consumer product according to the “pyramid strategy” of Paul Gay, president of L’Oréal China. Maybelline once had a slogan: “Let every Chinese woman owns at least one Maybelline product”.

Unlike most international brands that enter the Chinese market only on the premium route, L’Oréal Group has introduced its popular brand Maybelline into China from overseas and continued its popular brand route with increasingly convenient purchasing channels and increasingly affable prices. With a deeper understanding of the Chinese market, Maybelline has repositioned itself. It seeks a better way for Chinese consumers both in terms of brand management and channel construction.

Maybelline entered China in 1997. Then Maybelline has put a lot of effort into offline channels such as supermarkets and department stores considering this is the fastest channel to reach the masses China. The results have been remarkable. In less than five years, user loyalty of Maybelline has reached 75.31% and the overall competitiveness is also ranked first in the Chinese color makeup market.

According to a report by WRI Research, market share of Maybelline in China was as large as 15.71% in 2011. It is worth noting that the sales of counters opened in department stores contribute more than 60% of overall sales in China.

Subsequently, Maybelline has been introducing innovative products to the Chinese market all the time. For example, one concealer (“Eraser” called by Chinese people), which was introduced from abroad in the first half of 2017, became the No. 1 selling makeup product in Tmall flagship store and the No. 1 product in terms of offline recruitment and repurchase rate with 240,000 units sold on the Tmall platform during the promotional campaign on November 11st. The new lipstick, which was launched in the second half of 2017, also achieved great results with total sales reaching 40,000 units after its debut in Tmall. It sales exceeded 100,000 units in Tmall during the same promotional period.

Maybelline, which laid out China’s supermarket channel to approach mass consumers, is undoubtedly the educator of the enlightenment of China’s makeup market. But more than 20 years have passed, young consumers had a higher pursuit of professionalism and richness in makeup and there are more and more brands to choose from along with the upgrading of consumption.

In 2018, Maybelline completely withdrew from the supermarkets as well as department stores and other channels in China. The most direct reason for the adjustment of Maybelline’s channels is the decline of traditional retail and the loss of department store counters. But the withdrawal of department stores and the layout of online and single-brand boutiques actually conceal the strategic adjustment of Maybelline from mass makeup to mid-to-high-end brand.

With the battle of consumption upgrade, the retail market environment is changing dramatically. With e-commerce platforms making their hot debut and the atmosphere of traditional offline supermarkets going into the doldrums, more and more problems keep appearing such as declining sales, store closures, and rising entry fees year after year. In 2020, Maybelline once again cut down the offline channels which is a channel strategy adjustment made by Maybelline on its own initiative. Maybelline China said that the move to withdraw the Maybelline counters is a strategic transformation of the offline channel, which is based on considerations such as meeting consumer demand and further completing the shaping of the unique high street brand of Maybelline .

Nearly 5 million offline users and hundreds of millions of dollars in annual revenue will be lost due to Maybelline’s decision to shut down its offline counters. In order to reach this group of loyal users again and meet their buying needs, Maybelline started to do private traffic from last June.

By now, the enterprise community in wechat has 120,000+ users and 200,000+ friends. The total user volume is greater than 200,000+. Maybelline started out by directly transferring users from the enterprise wechat of staff who left due to store closures to the private domain and there are nearly 40,000 users who enjoy high loyalty and spend more than 1,000 per month. The problem is that there are still nearly 4.96 million stock users who cannot be reached at scale.

Later, Maybelline tried to contact this group of users manually by phone and the final conversion rate of adding fans was around one in a thousand. In December last year, Maybelline started to use AI voice phone to contact the remaining users. The connection rate reached 55%-60% in that time and the conversion rate was 4%. Compared with manual calls, AI voice calls are quite efficient. By the end of March this year, Maybelline had completed nearly 70,000 users into the group through AI voice calls.

In 2018, Maybelline shut down Chinese superstores as well as department store channels. In 2020, Maybelline shut down Chinese offline counters. Maybelline in the Chinese market share has occupied by the rise of the Chinese makeup like Florasis, Perfect Diary and high-end makeup Lancôme, Dior and other brands step by step, which no longer have the former glory. In June 2020, Maybelline started to do private traffic. Will that be the way out for Maybelline to save itself?



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