HKD58.2 million! Sa Sa International Achieved Profitability for the First Time Since the Pandemic

On July 18th, Hong Kong beauty retailer Sa Sa International released its annual report for the 23 fiscal year. According to the report, Sa Sa International achieved profitability for the first time since the pandemic, reaching 58.2 million Hong Kong dollars. Meanwhile, Sa Sa International has seen two consecutive years of turnover growth since 2021.

On July 18th, Hong Kong beauty retailer Sa Sa International released its annual report for the 23 fiscal year. According to the report, Hong Kong beauty retailer Sa Sa International reported its fiscal year 2023 results on July 18th. The company’s sales for the year reached HKD 3.5 billion, representing a 2.6% YoY growth. The gross profit amounted to HKD 1.4 billion, and for the first time in three years, the company achieved a profit of HKD 58.2 million. Following a significant drop in sales from HKD 8.157 billion in fiscal year 2019 to HKD 3.043 billion in fiscal year 2021 due to the pandemic, Sa Sa International has now reported growth in sales for two consecutive years.

Achieved profitability for the first time after the pandemic

Sa Sa International Holdings Limited, a Hong Kong-based beauty retailer, was founded in 1978 and went public on the main board of the Hong Kong Stock Exchange in June 1997.

In its first fiscal year as a listed company (1996-1997), Sa Sa International generated a turnover of HKD 990 million. Over the next five years, the company’s turnover steadily grew, from HKD 990 million to HKD 1.439 billion (pre-adjustment) in fiscal year 2001, with a growth of 45.35%.

On July 28, 2003, the Mainland-Hong Kong Individual Visit Scheme was implemented, bringing a booming tourism and retail industry to Hong Kong. Sa Sa International cleverly seized this opportunity, and its performance began to soar from fiscal year 2002 onwards. According to its financial reports, Sa Sa International’s turnover grew from HKD 1.354 billion (post-adjustment) in fiscal year 2002 to HKD 4.9 billion (pre-adjustment) in fiscal year 2011, a growth rate of 261.94% and a compounded annual growth rate of 15.4% over the ten years.

Starting in April 2009, residents with Shenzhen hukou (household registration) could apply for multiple-entry endorsements to visit Hong Kong. This policy stimulated more visits from Shenzhen residents to Hong Kong, and Hong Kong’s daigou (purchasing agents) market began to flourish. Sa Sa International again seized this opportunity and achieved its peak sales and performance in the fiscal year 2015.

Over the five years from the fiscal year 2011 to the fiscal year 2015, Sa Sa International’s turnover surged again, from HKD 4.516 billion (post-adjustment) in fiscal year 2011 to a historic high of HKD 8.419 billion in fiscal year 2015.

However, in the fiscal year 2016, Sa Sa International’s turnover declined for the first time, dropping by 13.12% to HKD 7.314 billion compared to the fiscal year 2015. But from fiscal year 2017 to fiscal year 2019, Sa Sa International’s turnover increased for three consecutive years, returning to HKD 8 billion in fiscal year 2019, reaching HKD 8.157 billion. Then, hit by the COVID-19 pandemic in 2020, Sa Sa International’s turnover hit a 15-year low.

In fiscal year 2020, Sa Sa International’s turnover plummeted by 29.91% from the previous year to HKD 5.717 billion. In fiscal year 2021, the downward trend intensified, with turnover dropping from HKD 5.717 billion to HKD 3.043 billion, a staggering 46.78% decrease. The turnover of just over HKD 3 billion was also a new low in nearly 15 years, lower than the HKD 3.221 billion in fiscal year 2008. Its turnover declined by HKD 5.114 billion in the first two years of the pandemic, which saw a decrease of 62.69%.

Meanwhile, as turnover fell sharply, Sa Sa International also posted its first loss in nearly 20 years, with three consecutive years of losses from fiscal year 2020 to fiscal year 2022, reaching HKD 475 million, HKD 359 million, and HKD 344 million, respectively.

However, according to its fiscal year 2023 report, Sa Sa International achieved a profit of HKD 58.2 million, its first profit since the pandemic hit. In addition, the company’s turnover has grown for two consecutive years since fiscal year 2021. Nevertheless, the turnover in the fiscal year 2023 only increased by 2.6% to HKD 3.5 billion, which only restored the turnover to the level of the fiscal year 2009.

The Southeast Asian market is experiencing a big rebound

After going public, Sa Sa International began its expansion journey in Asia. In the year of its IPO in 1997, Sa Sa expanded its business to Taiwan, Macau, and Singapore, opening its first stores in these three regions. One year later, Sa Sa International opened its first store in Malaysia. Within two years of going public, Sa Sa had already expanded its business to three new regions.

In 2005, Sa Sa International opened its first store in mainland China in Shanghai, marking the beginning of its expansion journey in mainland China and Southeast Asia.

According to its annual report, as of the fiscal year 2009, Sa Sa International had a total of 150 stores and counters in Asia, with 64 in Hong Kong and Macau, 10 stores and 23 counters in mainland China, 12 in Taiwan, and 14 and 26 in Singapore and Malaysia, respectively.

Five years later, in 2014, Sa Sa International expanded to 280 stores in Asia, an increase of 130. By 2016, it had reached 291 stores, nearly doubling its presence in the region.

However, despite continuously expanding its market, Sa Sa International has faced challenges in these regions.

Since entering the mainland China market, Sa Sa International reported losses consistently. In 2013, Sa Sa International’s financial report showed that its losses in mainland China had narrowed from HKD 31.3 million to HKD 30.1 million as of March 31. This was the eighth consecutive year of losses since entering the mainland China market in 2005. In its fiscal year 2023 financial report, Sa Sa International stated that its losses in mainland China for the entire 2023 fiscal year decreased by 69.2% to HKD 44.5 million compared to the previous fiscal year, while overall operating losses in the second half of the year narrowed significantly from HKD 43.6 million to HKD 0.9 million.

One of the important reasons for Sa Sa International’s consecutive losses has been the increase in costs due to tariffs since entering the mainland China market. As Hong Kong enjoys the status of a free trade port, cosmetics are exempted from taxes when entering Hong Kong, but tariffs are levied when entering mainland China. Reports have indicated that prices for Sa Sa International products in mainland China are generally 15% to 20% higher than in Hong Kong.

In terms of specific store numbers, as of March 31, 2023, Sa Sa International’s stores in mainland China have shrunk from 77 in the 22 fiscal year to 37, a reduction of 40 stores.

In addition to the mainland China market, Sa Sa International has also faced consecutive losses in the Singapore and Taiwan markets, leading to its direct withdrawal from these two markets.

On February 21, 2018, Sa Sa International announced that it would close all 21 stores in Taiwan by the end of March, focusing on developing its business in mainland China, Hong Kong, Macau, and Singapore. Sa Sa International claimed that its Taiwan business had been recording losses for six consecutive years, continuing to be weak. As of January 31, 2018, for the ten months ended, its Taiwan business turnover, calculated in local currency, decreased by 11.5% year-on-year to HKD 154.3 million.

When Sa Sa International withdrew from the Taiwan market in 2018, it mentioned the Singapore market as a focus for development. However, just over a year later, on December 2, 2019, Sa Sa International announced its withdrawal from the Singapore market. The announcement stated that the Singapore market had been in a state of loss for the past six fiscal years. As of the six months ended September 30, 2019, Sa Sa International’s turnover in the Singapore market was HKD 99.4 million, down 4.6% year-on-year in local currency. Therefore, it decided to close all 22 retail stores in the Singapore market.

Looking at the overall number of stores, as of March 31, 2023, Sa Sa International has reduced its stores in Asia to 186, a decrease of 105 from its peak of 291.

However, it is worth noting that in the past three years, the performance of the mainland China market has continued to decline, while the Southeast Asian market has seen a big rebound in 2023.

According to the fiscal year 2023 financial report, the number of retail stores in mainland China has been significantly reduced from 77 to 37, while the number of retail stores in Southeast Asia has decreased from 72 to 70. In terms of performance, offline sales in mainland China (in original currency) decreased by 22.9% to HKD 220 million, while offline sales in Southeast Asia increased by 64.9% (in original currency) to HKD 300 million. The offline sales in Southeast Asia have already surpassed those in mainland China.

Overall, in the fiscal year 2023, the turnover from the mainland China market was HKD 520 million, a year-on-year decrease of 31.1%, and the turnover share also decreased from 22.1% last year to 14.9% this year. The turnover from the Southeast Asian market in the fiscal year 2023 was HKD 372 million, a year-on-year increase of 43.8%, and the turnover share of the entire company’s 2023 fiscal year also increased from 7.6% last year to 10.6%.

During the reporting period, the turnover from Sa Sa International’s online business was HKD 602 million, a year-on-year decrease of 13.5%, with a 33.4% decline in mainland China due to the impact of the pandemic, making it the only region to record a decline. The total online business accounted for 17.2% of the company’s total turnover (2022: 20.4%), showing a significant increase compared to the pre-pandemic fiscal year ending March 31, 2019.

Overall, the Southeast Asian market has been gradually recovering in the three fiscal years since the pandemic.

The journey to reproduce the glory is likely to be long and challenging

The decline of Sa Sa International, from its once prosperous state to its current desolation, may be attributed to its heavy reliance on physical retail and its failure to seize opportunities for digital transformation.

Sa Sa International was once a shining star, but now it has fallen to the bottom, and one of the main reasons for this is the failure to seize the opportunity of digital transformation.

Sa Sa International had already launched its official website in 2000, allowing consumers to purchase products directly on its website without having to go to the store. At that time, domestic e-commerce was just beginning to emerge, and it was also swept away by the Internet bubble at the beginning of the millennium. Sa Sa International did not choose to take a risky move to invest in e-commerce.

Since the launch of Taobao in 2003, domestic e-commerce has been developing rapidly. At this time, Sa Sa International had not yet established a presence in the e-commerce business.

It was not until 2016 that Sa Sa International signed a cooperation agreement with, and Sa Sa entered JD Worldwide to develop its e-commerce business in the Chinese mainland market. In 2017, Sa Sa Micro Store began its operations. In the same year, Sa Sa International’s Tmall Global, Koala, and Xiaohongshu online stores opened for business.

In 2018, Sa Sa International cooperated with Tmall Global Buy. In 2019, it launched its WeChat mini-program. Even more delayed, it was not until 2020, after the outbreak of the pandemic, that Sa Sa International partnered with Shopee to open its first online store in Southeast Asia. In 2021, like a belated attempt to save a lost sheep, Sa Sa International opened its first online store in Lam Tin Plaza, launched its overseas flagship store on Douyin, and released updated shopping websites and mobile applications for the Hong Kong Special Administrative Region. It was not until 2022, two years after its withdrawal from the Singapore market, that Sa Sa International opened its first online store in Singapore.

Looking at the process of Sa Sa International’s digital transformation, it seems more like a belated attempt to remedy the situation, and it did not actively keep up with the market changes in a timely and proactive manner.

As other brands succeed in their digital transformation and shopping patterns change, consumers are no longer overly dependent on offline shopping. The impact of the pandemic is only temporary. After the industry recovers, there will be significant rebounds, such as the giants of the domestic cosmetics industry, Pechoin and Shanghai Jahwa, whose net profits are expected to increase by up to 65% and 100% respectively in the first half of 2023. In contrast, Sa Sa International’s turnover growth in the 2023 fiscal year was only 2.9%, and its turnover declined by as much as HKD 5.114 billion, a decline of 62.69%, in just two years.

The significant decline in Sa Sa International’s performance is not only due to its failure to achieve digital transformation promptly but also to its failure to effectively integrate into the local market, simply copying the business model of its Hong Kong stores. At the same time, competition from Sephora, Watsons, and local beauty retailers also put pressure on it. Unlike Sephora’s high-end positioning and Watsons’ low-price route, Sa Sa International’s awkward positioning also affected its performance.

In addition, excessive reliance on domestic tourists is also a reason for its significant decline in performance. On July 28, 2003, the policy of mainland tourists traveling to Hong Kong on individual visas was officially implemented. As a low-tax free trade port, Hong Kong undoubtedly became a famous shopping paradise around the world. Sa Sa International quickly took advantage of this advantage and attracted a large number of mainland tourists to visit, thus achieving significant growth in performance. At the same time, starting in April 2009, residents of Shenzhen can apply for multiple entry permits to visit Hong Kong, which has stimulated an increase in the number of Shenzhen residents visiting Hong Kong. At the same time, Hong Kong’s purchasing agents also began to flourish, promoting Sa Sa International’s performance growth.

In fiscal years 2014 and 2015, Sa Sa International’s turnover reached a historic high, taking advantage of the policy dividends of mainland tourists traveling to Hong Kong in 2003 and Shenzhen residents being able to apply for multiple entry permits to visit Hong Kong in 2009.

According to its financial report, Sa Sa International’s sales contribution from mainland tourists is more than 70%, far exceeding the sales contribution of local Hong Kong consumers. This abnormal turnover structure has also brought pressure on Sa Sa International, which is increasingly dependent on domestic tourists.

After the “one sign, multiple entries” policy for Shenzhen residents to visit Hong Kong was changed to “one week, one entry” after its expiration in 2015, the number of domestic tourists visiting Hong Kong began to decline. At the same time, the popularity of tourist destinations such as Korea and Japan has also led to a continued reduction in mainland tourists, further impacting Sa Sa International’s performance.

In summary, Sa Sa International’s decline can be attributed to a combination of factors, including its failure to keep up with the digital transformation trend, its awkward positioning in the market, its over-reliance on domestic tourists, and increased competition from other beauty retailers. Meanwhile, Sa Sa International has seen two consecutive years of revenue growth since 2021.




Subscribe for unlimited readership of the most professional, comprehensive and unbiased articles backed by data.
Starting at $8.33 per month if you subscribe a Pro Annual Plan


Beauty News

Industry News, Broadcast and Breakings

Industry Stats

In-depth Statistics from all aspects to dig out the sales, up and downs.

Consumer Research

Exclusive service to survey numerous consumers across the country and get the best expected results

Brand Analysis

Examine and analyse a brand in details to conclude a report showcasing the desired information

Niche Market Research

Study into the niche product market, producing whitepaper helpping business to understand the potential, development of a product and make decisions.


Retail / Distributor Finder

Help brand distribute in China.

Cosmetics/ Makeup Compliance

Help make your product legal in China

OEM/ODM Manufacturers

Know what's trending or find the best possible material / ingredient / product supplier

Scroll to Top

Subscribe Yearly Member to Read More