Core Viewpoint - Sasa International has decided to terminate its offline business in mainland China, closing all physical stores by June 30, 2023, and shifting focus to online operations due to declining performance in the beauty retail sector [1][2]. Company Performance - Sasa International reported a revenue of HKD 3.942 billion for the year ending March 31, 2023, representing a year-on-year decline of 9.7%, with a net profit of HKD 77 million, down 64.8% [1]. - Watsons in China has experienced six consecutive years of profit decline, while Sephora's revenue in China is projected to drop by 19% to CNY 7.14 billion in 2024, with net losses widening to CNY 646 million [2]. Market Trends - The Chinese cosmetics market is expected to grow from CNY 516.9 billion in 2023 to CNY 579.1 billion by 2025, indicating stable growth in the beauty industry [3]. - New retail beauty brands like Huamei, WOW COLOUR, and THE COLORIST are gaining traction by offering unique shopping experiences and targeting younger consumers [3]. Consumer Behavior - Consumers are increasingly opting for online purchases due to significant price advantages, with examples showing a price difference of CNY 194 for a product purchased online during a promotional event compared to in-store prices [2]. - The availability of diverse international brand counters in shopping districts has reduced the exclusivity of beauty collection stores, leading price-sensitive consumers to prefer e-commerce platforms [2]. Industry Challenges - Experts suggest that traditional beauty collection stores must explore new consumer hotspots and develop differentiated competitive advantages for sustainable growth [4]. - Despite the rapid growth of new beauty collection stores, they face challenges related to high customer acquisition costs and the need for a balanced expansion strategy to maintain profitability [5].