Maybelline Closes All Offline Stores in China
- Chaileedo Press
- Jul 27, 2022
- 3 min read
Updated: Aug 30, 2022
Abstract: Recently, L'Oréal Group's beauty brand Maybelline plans to all offline stores in China. Its future sales channels will be transferred to online platforms including Tiktok China, Pingduoduo, Taobao, and WeChat Mini Program, with offline channels retaining only Watsons's counter.
News on July 26th claimed that Maybelline would close all its offline stores in China, and its customer service staff confirmed to CHAILEEDO that it was notified of the brand's closedown on offline counters in succession. "In response to changes in market and consumer demand, Maybelline has been on a gradual strategic transformation since 2020 towards the traditional offline channels, aiming to create online-offline interactive experience stores to offer consumers a diversified shopping experience. Going forward, the brand will step up its effort to produce products of more competence and better quality." according to its official statement. This is another case where L'Oréal's beauty brand has withdrawn its offline stores in China, with YUESAI making the precedent.
Maybelline entered the Chinese market in 1995, then was acquired by L'Oreal in the following year, and this year marks the 27th year of its establishment in China. Once hailed as "the No.1 Beauty Brand", it has gained its foothold in the Chinese market. As early as 2018, Maybelline received close attention as it withdrew from the supermarket channel and by 2020 it further quit department store channel. " Amid the rapid growth and constant changes in the beauty market, Maybelline is also in a critical juncture of transformation." all-domain retail general manager of L'Oréal China's mass-market cosmetics division Lin Xiao suggested.
When Maybelline first entered the Chinese market, it was positioned as a mass consumer goods producer, thus focusing its layout on mainstream channels like supermarkets and department stores. Now the decision to withdraw from offline services is closely related to the sales channel reform caused by the general decline of entity store customers and high charges such as settling fees, bar code fees, and numerous factors.
Not just Maybelline suffers from slipping offline sales, but all the players within the Chinese cosmetics market are registering higher online sales than offline ones. According to a report from the Qianzhan Industry Institute, the proportion of offline cosmetics sales is on the decline. Euromonitor's data shows that offline sales channels are predominance across the world from 2011-2020. But recent years have seen a rapid development of the online channels for global cosmetics, thus threatening offline channels. And the pandemic's outbreak in 2020 further accelerated the process, with the proportion of offline channels being 24.8% and online channels taking up 74.4%.
On the other side, the rapid rise of Chinese beauty brands also threatens to take over more market shares abroad owned by Maybelline and other established brands. From 2015 to 2019, Maybelline was the No. 1 brand in market occupancy across the Chinese beauty market, according to a report by market analyst CTR Market Research. However, under intensifying competition in the mass beauty market, Maybelline's market share has dropped from 30.9% to 23.3% year by year. Despite the pandemic in 2022 leads to decline of the overall consumption of the beauty industry to some degree, the Chinese beauty brands maintain a decent performance overall. Data from MKTINDEX that during the pre-sale period of Chinese 618 Shopping Festival, L'Oréal's professional beauty brand 3CE won the first place with sales of more than $ 21 million. Florasis was taking the lead in Chinese beauty brands with sales of nearly $ 21 million, and Timage, Colorkey are also among the top10 list, and Maybelline ranks 14th with $ 7.5 million.
The rise of China's beauty brands is inseparable from the emergence of new cosmetic products and mounting e-commerce tracks. The Chinese brands aims at e-commerce channel for overseas brands in the first place, taking the advantage of the the online market. Even some beauty brands started only with online channels such as Perfect Diary, Judydoll. Most of the Chinese beauty brands come from content-oriented social e-commerce platform, setting foot in Xiaohongshu, Bilibili and cooperating with the beauty blogger by video link to gain an in-depth look to the livestreaming field, as well as joining hands with KOLs through livestreaming.
It is reported that strategic adjustment is all about promoting sales. In addition to Watson's counter, Maybelline will turn its sales to Tiktok China, Pingduoduo, Taobao, WeChat Mini Program, and other online channels. Amid fierce competition, abandoning offline stores and operating in the Chinese market more flexibly may fare better for Maybelline.
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