Core Viewpoint - The beauty industry in China is experiencing a significant market reshuffle, with major brands consolidating their positions while smaller brands face survival challenges due to increasing operational costs and fierce competition [1][2]. Group 1: Market Performance - In the first half of 2025, the total retail sales reached 24.55 trillion yuan, showing a year-on-year growth of 5.0%. The cosmetics retail sales amounted to 229.1 billion yuan, with a growth of 2.9% [1]. - Despite the overall market growth, there is a stark contrast between the performance of large companies and smaller brands, leading to a concentration of market heat among top players [1]. Group 2: Brand Closures and Market Exit - Sa Sa International closed its last 18 offline stores in mainland China by June 30, marking its exit from the market after 20 years of operations [3]. - Over a dozen beauty brands have closed or exited the Chinese market in the first half of 2025, including well-known brands under major beauty groups, indicating that foreign brands are not guaranteed success in China [3][4]. - Amorepacific's high-end skincare brand "SIENU" and Innisfree have also closed their online stores, reflecting the declining influence of Korean wave culture and increasing operational challenges [3][4]. Group 3: Strategic Adjustments by Major Brands - Major beauty companies are streamlining their brand portfolios in response to intense market competition and rising operational costs, focusing resources on mature and popular brands while closing less efficient ones [5]. - Unilever's high-end skincare brand TATCHA has ceased operations on major e-commerce platforms, highlighting the challenges faced by even well-established brands [5]. Group 4: Capital Market Activity - Domestic beauty companies are increasingly seeking capital market opportunities, with several companies planning IPOs in 2025, including raw material suppliers and brand operators [7][8]. - Notable IPO activities include 毛戈平's successful listing in late 2024, which has inspired other domestic beauty brands to pursue similar paths [7][8]. - Industry experts believe that seeking capital market support is a strategic choice for the future development of domestic beauty companies [9].

Group 1 - The beauty industry is experiencing intense competition, leading major beauty groups to streamline their brand portfolios [1][4] - In the first half of 2023, the retail sales of cosmetics reached 229.1 billion yuan, with a year-on-year growth of 2.9%, while overall retail sales increased by 5.0% [1] - Many beauty brands, including Sasa International and Amorepacific's brands, have closed stores or exited the Chinese market, indicating a challenging operating environment [2][3] Group 2 - The closure of brands like SHIHYO and TATCHA reflects the increasing operational costs and competitive pressures in the Chinese market [3][4] - Domestic beauty companies are increasingly attracted to the capital market, with several companies planning IPOs in 2023 [5][6] - The trend of seeking capital market support is seen as a strategic move for domestic beauty companies to enhance their growth prospects [7]

Core Insights - Unilever has decided to close its UK clean beauty brand REN due to internal factors and market challenges, indicating a strategic shift under new CEO Fernando Fernandez [1] - The company has also closed its TATCHA brand's Tmall flagship store and ceased updates on social media, signaling a significant adjustment in its high-end beauty strategy [1] - Unilever's Q1 2025 revenue was €14.8 billion, a slight decline of 0.9% year-on-year, with a 1.3% increase in underlying sales volume [1] Group 1: Business Strategy and Restructuring - Unilever initiated a "growth action plan" last year, which included cutting approximately 7,500 jobs, about 6% of its workforce, and reducing its brand portfolio from over 400 to 30 core brands [2] - The company aims to save approximately €550 million by the end of 2025 through these restructuring efforts, having already reduced around 6,000 full-time employees [2] - The ice cream business is expected to be separated by Q4 2025, with independent operations starting on July 1 [2] Group 2: Financial Performance - Unilever's Q1 revenue breakdown shows Beauty & Wellbeing and Personal Care each generated €3.3 billion, while Home Care, Nutrition, and Ice Cream generated €3.0 billion, €3.4 billion, and €1.8 billion respectively [3] - The company maintains a full-year outlook for 2025, expecting underlying sales growth between 3% and 5% [3] Group 3: Market Dynamics - The Asia-Pacific region is Unilever's largest market, contributing 44% of total revenue, with Q1 revenue of €6.5 billion and a 2% increase in underlying sales [4] - However, the Chinese market has shown signs of decline, with a high single-digit drop in Q1, continuing a trend from the previous year [5] - Unilever is implementing targeted interventions in China, such as expanding product offerings and enhancing brand promotion, with expectations for improvement by H2 2025 [5] Group 4: Competitive Landscape - The company faces increasing competition from local brands and market dynamics, particularly in the personal care and beauty segments, where consumer preferences are shifting towards online and personalized experiences [6] - Unilever's ice cream and personal care segments are under pressure from "consumption downgrade," impacting profitability [6] - Competitors like L'Oréal are planning to maintain growth in China, further intensifying the competitive environment for Unilever [6]