In recent years, the cosmetics market has been hit hard, with numerous cosmetics brands withdrawing or closing down.
Not long ago, the discontinued cosmetics brand Moonway announced its revival, and the brand has already started pre-sales on Douyin (Chinese version of TikTok). At the same time, it has come to the attention of CHAILEEDO that other cosmetics brands that previously announced clearance sales have managed to turn the situation around. So, how have these brands regained their momentum amidst the wave of cosmetics closures? What other opportunities exist in the cosmetics market?
With over 3,000 pre-orders, Moonway Cosmetics restarts its operations
In October of this year (2023), a video posted by a Douyin user named “Xiaoye” went viral, garnering nearly ten million views and 227,000 likes. In the video, Xiaoye mentioned that the loose powder she had been using for five to six years had been discontinued. Surprisingly, when Xiaoye contacted the brand, she received a response, and the staff member even offered to send her a product.
From the interaction between Xiaoye and other netizens in the comments section, it was revealed that the product mentioned in the video was the Moonway Cherry Blossom Loose Powder, and other consumers also expressed their recognition of Moonway products, hoping for the brand’s revival.
Following the video’s popularity, Moonway’s brand responded through their Douyin account, “Moonway Guochao Beauty,” stating, “We had to discontinue Moonway for various reasons before… We have heard and seen the strong demand for the brand’s revival, and we are actively preparing for its return. We believe that we will soon share good news with everyone. Moonway will reappear in a completely new way before the public.”
Public records show that Moonway was founded in 2017 and positioned itself as a local original trendy professional cosmetics brand. They have launched products such as the Cherry Blossom Loose Powder, Mahjong Series Eyeshadows, and Mascara. The packaging of their products features exaggerated graffiti designs, targeting consumers in their 90s who prefer a personalized and fashionable style. It is worth mentioning that Moonway is also a sister brand of the mass skincare brand Herbetter.
CHAILEEDO noticed that Shanghai Taojiyuan E-commerce Co., Ltd. (referred to as “Shanghai Taojiyuan”) had filed records for 25 Moonway cosmetics products from 2017 to 2019. However, these products are currently listed as “record canceled” or “de-registered.” In August of this year, Shanghai Taojiyuan was fined 10,000 yuan by the Baoshan District Market Supervision Administration in Shanghai for selling discontinued Moonway Cherry Blossom Brightening Tri-Color Loose Powder cosmetics through their Pinduoduo store, “Moonway Cosmetics Flagship Store.”
With the rising popularity of videos related to Xiaoye, the Moonway brand has made progress in reviving its production. According to the information from the National General Cosmetics Record Information System, the registrant for several Herbetter products is Shanghai Huke E-commerce Co., Ltd., which has filed records for the MOONWAY Purifying Makeup Remover and MOONWAY Brightening Tri-Color Loose Powder in February and November of 2023, respectively.
Simultaneously, both the Douyin accounts “Xiaoye” and “Moonway Guochao Beauty” released teasers about the new Moonway loose powder in October and November. It is known that on November 23rd, the Moonway Beauty Store on Taobao began the first round of pre-sales for the new loose powder, priced at 49.9 yuan. The initial batch of 1,000 units was sold out quickly. On November 28th, the Moonway Skincare Store on Douyin also started pre-sales for the loose powder, with 2,389 units already reserved as of the time of writing.
Thus, in response to the demand from consumers, Moonway’s loose powder has returned to the market, and the brand has found a new lease of life.
Clearance and closure, restart and new launch, a roller coaster ride for emerging cosmetics
In fact, Moonway is not the first cosmetic brand to restart with consumer support. CHAILEEDO noticed that during the clearance and closure wave of cosmetic brands in 2021, the attention from the public and the rush of consumers also brought some brands back to life.
One of the most typical examples is DRAMO. It is understood that DRAMO was founded in April 2017, with the brand slogan “Originated from the wild, full of innocence,” and has launched products such as lipstick, eyeshadow, and nail polish. At the end of 2020, DRAMO announced the upcoming closure of its stores, which attracted the attention of many bloggers and netizens. Many consumers also chose to purchase products to show support for the brand. On March 5, 2021, the official WeChat account of DRAMO even published an article mentioning that “on April 25, 2021, we will organize a clearance closure event to sort out the inventory.”
It is known that one of DRAMO’s eyeshadow palettes became discontinued during the clearance sale, which caused a frenzy among consumers, and there were cases of resale at high prices on second-hand platforms. During this period, the wave of closures in Chinese domestic cosmetic brands also attracted the attention of many bloggers and media outlets, and DRAMO gained more attention due to this “clearance closure” event.
On April 1, 2021, when replying to fans’ comments on Weibo, DRAMO’s official account once said, “Clearance to regain strength, strive to release new products in the middle of the year,” leaving the fate of the brand uncertain. On June 19 of the same year, DRAMO launched a new product, the Noise Meditation Park five-color eyeshadow palette, and started pre-sales on Taobao. Since then, they have also released multiple new eyeshadow palettes.
As of now, DRAMO is still operating normally, and the highest-selling product in the DRAMO Taobao store is the Monthly Wheel Plan single-color eyeshadow, with over 40,000 units sold. The Full Note single-color eyeshadow has also sold over 20,000 units. In October of this year, the DRAMO Monthly Wheel Plan series also launched a co-branded eyeshadow palette with a popular influencer on Xiaohongshu (Little Red Book), priced at 198 yuan. The Taobao store shows that over 1,000 units have been sold. Clearly, DRAMO has overcome the dilemma of “clearance closure.”
Similarly, Romance Baby Bear, a cosmetics brand that focuses on Lolita culture, also announced its closure in August 2021 through its brand’s official account, stating, “Due to certain reasons, we are unable to continue.” The store also started clearance sales. After nearly a year, Romance Baby Bear announced its restart in July 2022. In an open letter, the brand expressed that they had closed down due to certain reasons but received many messages and encouragement during that year, leading to their decision to come back.
In October of the same year, Romance Baby Bear launched a new makeup series in collaboration with Japanese illustrator Mikko illustrations, including lip gloss, under-eye concealer, eyeshadow, blush, and powder puffs, with prices ranging from 29.9 yuan to 89 yuan. Currently, the best-selling product in the Romance Baby Bear Taobao store is a 9.9 yuan eyebrow pencil, which has sold over 700 units. The Mikko illustrations collaboration series has also sold only a few hundred units.
However, not all cosmetic brands that planned to close down were able to restart. Woodzbeauty originally planned to close down and have a clearance sale in 2021. But due to the news of the clearance, they gained a surge of attention on Xiaohongshu. The brand once wrote on its store details page, “Perhaps we will come back.” However, as of now, Woodzbeauty has disappeared from online sales. Public information shows that the Woodzbeauty Taozi Miss Ten-color Eyeshadow Palette was canceled on January 6, 2023, and Hangzhou Gaomuzi Biotechnology Co., Ltd., the company behind Woodzbeauty, was listed as an abnormal operation entity in July this year for failing to disclose the 2022 annual report within the prescribed time limit.
Regarding the situation where beauty brands gain attention and revive through “closure,” a responsible person from an emerging brand once said, “It is not ruled out that the brand did consider closing down before, but it might have been able to continue due to the surge in attention on Xiaohngshu and the support of consumers.
Another market leader in the beauty brand industry expressed a similar viewpoint. In her opinion, the cosmetics market, especially color cosmetics, has been severely impacted during the pandemic. The pressures of funding and inventory may make it difficult for some emerging brands to continue. The support and purchase of Chinese domestic products by consumers may temporarily help these brands overcome the crisis, but their future development will also depend on the brand’s subsequent marketing and promotional strategies.
Some people build brands, while others are busy reaping the benefits
In the wave of the rise of Chinese domestic products, the first to receive attention was the emerging Chinese domestic cosmetics. However, in recent years, the downturn in the cosmetics market has greatly reduced the presence of Chinese domestic cosmetics, and some leading brands have been deeply immersed in a crisis of trust. At the same time, financing for cosmetic brands has also reached a freezing point. As of now, only two cosmetic brands in China, RED CHAMBER and CODEMINT, have received financing this year, and few new cosmetic brands have emerged in the past three years. So, what is the current state of the active cosmetic brands?
According to the Tmall, Douyin, and Kwai Double 11 cosmetics brand rankings compiled by CHAILEEDO based on CHAILEEDO Intelligence and Ebrun, an analysis of the basic situation of some Chinese domestic cosmetic brands reveals that today’s these cosmetic brands can be roughly divided into two categories. One category consists of brands with distinctive characteristics or those that break through with special product categories, such as makeup artist brands like Timage and MAOGEPING, which have their founders, Tang Yi and Mao Geping, as brand IPs. The other category consists of brands active on Douyin and Kwai, which are beauty industry OEM factories. Typical examples include VC, the number one cosmetic brand on the Douyin Double 11 brand ranking, as well as luxury brands launched by top Kwai anchors such as She Mao, Mirui, and Dailaixi. These brands follow the formula of “massive advertising materials + 24/7 live streaming + endorsement by anchors” to complete the process of marketing and sales on social platforms.
In terms of product categories, the majority of cosmetic brands that make it to the top of the rankings mainly focus on base makeup products, including foundation, cushion compacts, concealer, loose powder, and pressed powder, emphasizing concepts such as skincare, Asian research, suitability for sensitive skin, and pure beauty. In addition, INTO YOU has made a strong entry into the lip makeup market with its innovative product category, lip mud. Jiao Se Lipstick has gained recognition with its irregular water ripple appearance and unique jelly texture. The most popular products from RED CHAMBER are four-in-one multipurpose cream products for lips, cheeks, eyeshadows, and highlights. Hua Zhixiao focuses on girly makeup and is known for its original packaging design full of girlish charm.
The head of a beauty brand’s operations department stated that base makeup emphasizes functionality and allows for premium pricing. The well-developed base makeup technology of Chinese domestic cosmetic OEM factories provides support for these brands in the field of base makeup. On the other hand, color cosmetics emphasize a sense of fashion and require brands to keep up with or even create trends. This statement is consistent with the current product category deployment of Chinese domestic cosmetic brands. Most cosmetic brands choose to focus on the base makeup track, while brands that produce color products often have differentiated advantages and a unique aesthetic that is already recognized by the market. A typical example is DRAMO, which faced clearance and store closure but still focused on promoting eyeshadow palettes with special color combinations. Its unconventional aesthetics have attracted a group of loyal fans.
It is worth mentioning that, unlike the strategy of rapid sales by the brands of the Douyin and Kuaishou beauty industry OEM factories, and different from the sales-oriented thinking of previous emerging brands, many of today’s emerging cosmetic brands have already paid attention to the shaping and communication of brand core concepts in the early stages of entrepreneurship. They have begun to emphasize providing consumers with more cultural and emotional value.
For example, FunnyElves, which achieved explosive growth over the past three years due to the pandemic, positions itself as a “base makeup brand focused on researching Asian skin types.” It encourages women to be confident, accept themselves completely, and enjoy life with ease and confidence, while its full product line aims to achieve a natural makeup look. The brand’s founder, Yang Ju, has appeared multiple times to tell the brand’s entrepreneurial story and convey its philosophy. Her personal Douyin account has been updated since April of this year and has already attracted 100,000 followers, becoming a brand IP.
On the other hand, Beauroma, a cosmetic brand that was launched in November this year, positions itself as “light makeup.” The brand recognizes that most cosmetic brands emphasize flawless skin, which to some extent causes appearance anxiety. Therefore, Beauroma incorporates the concept of “everyone is naturally beautiful” into its brand philosophy. Nancy, a strategic investor in Beauroma, told CHAILEEDO that the brand hopes to convey a sense of relaxation to users, allowing everyone to apply makeup without requiring too much technique or skill. “Our entire startup team is made up of women, and we also hope that Beauroma can transmit a strong sense of femininity to more female consumers.”
In Nancy’s opinion, the future development of Chinese domestic cosmetic brands will depend on several factors. First, brands need to establish trust and credibility with consumers. This can be achieved through transparent and reliable product information, quality control, and positive customer reviews. Second, brands should continue to innovate and differentiate themselves from competitors. This can be done through unique product formulations, packaging designs, and marketing strategies. Third, brands should leverage social media platforms to engage with consumers and build a loyal customer base. This requires creating compelling content, collaborating with influencers, and actively responding to customer feedback. Finally, brands should stay updated with market trends and consumer preferences to ensure their products meet the evolving needs of the target audience.
In summary, after going through a rigorous selection process, domestic color cosmetics have moved beyond simply selling products and entered a new phase of product development and brand value output. In this process, it is possible that Chinese color cosmetics brands will emerge that can lead global trends.
