Summary of Key Points from the Conference Call Industry Overview - **Industry**: Beauty and Cosmetics in China - **Current Trends**: China's beauty demand and promotions have stabilized in 2025, with growth driven by onshore e-commerce channels while travel retail continues to decline [1][2][4] Market Performance - **Sales Growth**: Government data indicates a 3.3% growth in cosmetics sales from January to August 2025, slightly below GDP growth but an improvement from a 1.1% decline in 2024 [2][4] - **Channel Performance**: - E-commerce platforms experienced a 5-10% growth in beauty sales [2] - Hainan travel retail saw an 8-10% decline [2] - Offline sales are expected to be a drag on overall performance [2] Key Brand Performances - **L'Oréal**: Sales dipped by 0.2% to 0.3% in Q1 2025 but rose by 3% in Q2 2025, with a full-year target of approximately 5% growth [4] - **Estée Lauder**: Onshore e-commerce grew in mid-single digits in Q1 2025, with travel retail contributing about 15% of full-year sales [4] - **Shiseido**: Reported a low single-digit decline in Q2 2025 sales, with e-commerce up in low teens but offline and travel retail down sharply [4] - **Amorepacific**: Post-restructuring, sales in China increased by 30% YoY in Q2 2025, with expectations for double-digit growth into Q3 2025 [4] - **LG Household & Health Care (LGHH)**: Focus on profit led to over a 10% sales decline in China and a 30% drop in travel retail in H1 2025 [4] - **Giant Biogene**: Expected 21% sales growth in H2 2025 for Comfy and 33% for Collgene, with strong performance anticipated during the 11.11 shopping event [4] - **Proya**: Sales trends remain weak in Q3 2025, with potential for growth momentum in 2026 [4] 11.11 Shopping Event Insights - **Promotions**: Tmall's event began on October 15, 2025, with a notable reduction in overall promotions compared to previous years [3][4] - **Average Selling Price (ASP)**: Most leading brands' flagship products showed similar or slightly higher ASP year-over-year [3] Market Risks and Future Outlook - **Risks**: The industry faces risks related to over-reliance on large promotions and macroeconomic weaknesses [2] - **Price Competition**: Expected to moderate somewhat, indicating a potential stabilization in pricing strategies [2] Additional Insights - **Korean Cosmetics**: Travel retail for Korean cosmetics shipped to China is estimated to have declined by 25-30% in the first half of 2025 [2] - **Channel Overhaul**: The necessary channel overhaul for China's beauty market appears to have concluded, with travel retail dropping to approximately 50% and 60% of their respective peaks in 2021 [2] This summary encapsulates the key points discussed in the conference call regarding the beauty and cosmetics industry in China, highlighting market performance, brand-specific insights, and future outlooks.