What: Chinese cosmetics brands hold more than half of China's market, worth almost Rmb1tn ($149bn), yet Proya, the largest, has only a 1.5% share against L'Oréal's 8.6%.

Why it is important: With the domestic market shrinking in 2024 and listed players under financial strain, Chinese beauty groups are looking to Western shelves, which gives beauty buyers a growing pool of new brands whose appeal rests more on branding than on origin.

The sector is extremely fragmented, and foreign groups still hold the top spots. Proya, the only Chinese company in the top five, became the first local player above Rmb10bn in revenue in 2024, yet its revenue fell 1.7% last year and rose 0.2% in the first half. Chando, whose revenue rose 16% to Rmb5.3bn last year, and Proya both depend heavily on flagship brands, which Morningstar says leaves them exposed to trend changes until they widen their portfolios.

Results are uneven: Mao Geping's first-half revenue rose 26% to Rmb3.3bn, while Yatsen has lost 98% of its value since its 2020 New York listing and is worth less than $225mn. Yatsen has bought Galénic, Eve Lom and mainland rights to Dr Wu, with research centres in Shanghai and Toulouse, while Proya opened a Paris laboratory in October. Flower Knows, now part of Proya, debuted at Boots, and Proya brings two skincare collections to Ulta Beauty in November. An industry source says Chinese brands do not yet speak to Western consumers in a branded way, and that overseas ambitions rely on consolidation at home as well as stronger branding.

IADS Notes: Reuters' coverage of Proya's move into 400 Ulta stores recorded that Chinese brands held 57.4% of China's cosmetics market last year, and that Proya's CEO put its brand awareness in Europe and the US at zero (Reuters, October 2026). The domestic backdrop explains the urgency: retail sales in China grew 0.4% in August as stimulus faded, and Chinese retailers expanding abroad are testing each market with a flagship and closing weaker sites instead of rolling out fast (Inside Retail, October 2026). The same pattern of local brands gaining share at home before convincing outside investors appears in luxury, where Laopu Gold grew sales 61% in the first half yet trades at about 6 times forward earnings, with doubts over whether its appeal travels (Financial Times, October 2026). Foreign groups have been repositioning around that shift: Estée Lauder is cutting up to 10,000 roles, over 70% of them point-of-sale positions in department and freestanding stores, as it moves toward digital and specialty channels (Retail Dive, May 2026). In the US, Shinsegae's Hyper Ground pop-up shows Asian beauty reaching shelves through curation while Olive Young, Sephora and Ulta compete for K-beauty, and its Paris experience taught it that international shoppers no longer buy Korean brands for their origin alone (WWD, September 2026).

Chinese cosmetics brands look abroad as pressure builds at home