Core Insights - The Chinese cosmetics market has surpassed 1.1 trillion yuan, maintaining its position as the largest cosmetics consumer market globally [2][3] - The market share of domestic cosmetics has increased to 57.37%, solidifying its leading position [3][25] - Approximately 27,000 brands were eliminated in the past year, while over 60% of the top 500 brands achieved positive growth, indicating a shift from a broad growth phase to a deep transformation focused on structural optimization [3][19] Market Size and Growth - In 2025, the total transaction value of the Chinese cosmetics market is projected to be 1,104.25 billion yuan, with a year-on-year growth of 2.83%, indicating a stable development phase [8] - The growth rates for the years 2023, 2024, and 2025 are 3.61%, 2.80%, and 2.83% respectively, reflecting a new normal of single-digit growth [8] - The retail sales of cosmetics in 2025 are expected to reach 465.3 billion yuan, with a growth rate of 5.1%, outpacing the overall retail sales growth [11] Market Dynamics - The data from the China Cosmetics Association and the National Bureau of Statistics complement each other, presenting a comprehensive view of the market landscape [14] - The divergence in data is attributed to different statistical scopes, with the National Bureau focusing on larger enterprises while the Association includes a broader range of market players [14] - The market is experiencing a significant internal structural change, with resources concentrating on larger, compliant, and research-capable enterprises, while smaller firms face increasing survival pressures [15] Brand Performance - Over 60% of the top 500 brands achieved positive growth, while the number of brands with over 100 million yuan in sales increased from 746 in 2023 to 839 in 2025 [16] - The elimination of approximately 27,000 brands in 2025 signifies the end of competition based on traffic and homogenized products, marking an acceleration of the survival of the fittest [19] Channel Competition - Online channel transaction value grew by 4.45% in 2025, while offline channels remained stable, indicating the end of reliance on a single growth channel [22] - The shift towards comprehensive channel operations is becoming the new foundation for brand development [22] Rise of Domestic Brands - Domestic brands' market share has risen to 57.37%, marking a fundamental shift in market dynamics [25] - Successful domestic brands focus on niche markets, technological barriers, and unique brand cultures rather than just price competitiveness [28] - The victory of domestic brands reflects a new development model that emphasizes long-term value and systemic capabilities [31] Regulatory and Competitive Landscape - The modernization of the regulatory system during the 14th Five-Year Plan has clarified the direction for high-quality development [34] - The shift from marketing wars to technology and brand wars is reshaping competitive dynamics within the industry [35] - Continuous investment in R&D is evident, with the average R&D expense ratio for Chinese cosmetics companies increasing from 2.36% in 2020 to 3.24% in 2025 [35] Consumer Behavior and Market Trends - The market is witnessing a dual pursuit among consumers for both high-value basic products under 300 yuan and luxury products over 1,000 yuan, while mid-range products are declining [38] - Brands must clearly position their value propositions to succeed in this evolving market landscape [38] Global Market Expansion - Expanding into global markets is becoming essential for leading brands, with some achieving significant breakthroughs in mature markets [39] - The dual drivers of strong policy and active market dynamics are propelling the Chinese cosmetics industry towards a new era of high-quality development [40]