Not acclimatized, Stila quitting China

ABSTRACT: On July 26th, Stila, an American beauty brand, announced in its Tmall flagship store that its overseas beauty flagship store would cease operation at 18:00 on July 26th.

Along with the overall consumption upgrade of Chinese consumers and the growth of Chinese e-commerce platforms, recent years have witnessed overseas niche beauty brands flocking into China, with shops on e-commerce platforms becoming their top choice. But since the second half of 2021, social media is always reporting cosmetics clearance and the closedown of some brands' Tmall stores, with several stores selling niche imported beauty products having been closed or entering the countdown of their closedown. The eyeshadow palette of UrbanDecay and the Huda beauty, and liquid eyeshadow of Stila were once all the rage because customers had to offer higher prices to secure them from purchasing agents, said many a consumer. But now they are available via some unofficial stores at prices around $ 100. It is understood that most of these products of clearance sales by online distributors are products nearing their expiration date. Stila also announced the closure of its flagship Tmall store on July 26 after clearance sales for some time.

Purportedly Stila entered the Chinese market in 2022 as its products were already selling like hotcakes in the purchasing-through-agency market. And many products like eyeshadow, Skin Tone Correcting &Brightening Primer, highlighter, and All-in-one Color Correcting Palette are hot-selling due to kol's recommendation. It took Stila only two years to go from a demand-exceeding-supply boom to sales clearance and end up with eventual closedown. And these two years also happened to witness the rapid development of domestic beauty brands in China, with the number and categories of brands increasing exponentially.

According to the 2021 Research Report on National Cosmetic Industry's Region released by Qixin.com, the number of new cosmetics enterprises in China has increased year by year over the past decade. In 2020, the number exceeded 25 thousand, with a growth rate of 70%. In 2020, the scale of China's cosmetics market reached $ 50.288 billion and $ 54.4 billion in January-November 2021, with a growth rate of 15.3%. Recent years have witnessed the continuous development of domestic cosmetics by virtue of the live streaming e-commerce and the gradually complete industrial chain behind it. Therefore, the new generation of Chinese fashion cosmetics brands is dominating the major market of domestic cosmetics. Such as the Chinese-element-oriented beauty brand Florasis is one of the brands gaining popularity through live streaming marketing, offering a unique design, lipstick with decorative carved pattern, and love lock-style packaging that capture the hearts of the young generation.

In fact, not just niche European and American brands are facing mounting challenges in China. LVMH's beauty brand Benefit Cosmetics and Japanese beauty brand KATE have all had their counters removed from the Chinese market, and even the former beauty giant Maybelline recently announced the closure of all its offline stores in China. According to Euromonitor, Maybelline boasts the largest market share in the Chinese beauty market for years, and has remained so from 2011 to 2020. The ranking of Chinese beauty brands has changed since 2021, with Florasis's market share ranking top and Maybelline falling to sixth place.

In recent years, China's beauty industry has recorded a rapid development, the transaction scene is moving from offline to online, which on one hand drives the growth of digital new retail sales. On the other hand, short video, livestreaming marketing, social e-commerce, and online and offline highly marketing models of high integration have become the inevitable trend. Overseas brands need to deal with the pressure from the rise of China's local brands, and also dissect the trend of Chinese consumers to gain better access to the Chinese market.