Household products represent almost 60% of sales; ability to quickly adapt to consumer needs is the main advantage
Domestic cosmetics brands have strengthened their dominance in China’s $141 billion beauty market by 2025, capturing nearly 60% of total sales. Supply chain agility and adoption of e-commerce tactics have pushed foreign competitors further into the margins in the country.
This dominance highlights the growing challenge facing international conglomerates in China. Local brands, with their ability to quickly adapt to changing consumer tastes, have helped drive total cosmetics transactions to more than 1.1 trillion yuan ($141 billion) for the first time, according to the China Association of Fragrance, Flavor and Cosmetic Industries. The group reported on Tuesday (20 January 2026) that domestic brands held a 57.4% market share in 2025, the 5th consecutive year of growth.
Although China remains the world’s largest consumer of cosmetics, foreign brands have been steadily losing ground. French companies –led by – came in 2nd place with a 16.1% share, representing 75.5 billion yuan in sales. Brands from the USA, Japan and South Korea followed with shares of 11.7%, 6.4% and 4%, respectively.
A central factor behind this shift is the rapid adaptation of domestic manufacturers. A source at a local cosmetics factory told Chinese production facilities can adjust formulas within hours, while foreign competitors can take months to implement similar changes. The technical gap, she said, has been largely reduced — but flexibility remains a local advantage.
This agility is reinforced by a more sophisticated regulatory environment. Since implementing stricter oversight in 2021, the practice has become one of promoting innovation and service rather than punishing non-compliance. Increasingly, factories are investing in R&D (Research and Development) and creating patents to increase the credibility of their brands and marketing.
Local companies are also increasing research budgets. Among the 22 publicly listed companies across the cosmetics supply chain, average R&D spending increased from 2.36% of revenue in 2020 to 3.24% in mid-2025, according to the industry association. The drive for innovation coincides with intense turnover in the market: around 27,000 brands left the market in 2025, being replaced by around 17,000 new entrants.
Experts attribute the rise of domestic brands to their superior dominance of digital platforms. Online channels accounted for 65.4% of all sales in 2025, and local businesses have proven much more agile in implementing marketing tactics within China’s fragmented e-commerce ecosystem. Younger consumers, once attracted by the prestige of global brands, are increasingly favoring domestic brands that offer better value for money.
Consumer habits are also changing. Products priced below 300 yuan accounted for nearly 59% of sales in 2025, while high-end offerings above 1,000 yuan accounted for 14.75%. Intermediate products, with prices ranging from 300 yuan to 1,000 yuan, saw their market share decline. This change points to a dynamic of “survival of the fittest”in which high-end and technologically advanced brands attract more capital and consumer interest.
This report was originally in English by Caixin Global on January 21, 2026. It was translated and republished by Poder360 under mutual content sharing agreement.
