An analysis report from Guotai Haitong Securities Co., Ltd. suggests that the paths of professional cosmetics and high-end luxury cosmetics differ significantly. Professional brands typically focus on color cosmetics, while luxury brands comprehensively cover fragrances, color cosmetics, and skincare. The firm believes domestic brands have the potential to gradually build brand value recognition through their professional capabilities via category expansion and marketing upgrades, thereby evolving into premium brands that represent Oriental aesthetics. It recommends leading cosmetics companies that are committed to building local premium beauty brands and those deploying differentiated color cosmetics brands, suggesting adding positions in MAO GEPING (01318), Proya (603605.SH), and FOREST CABIN (02657), among others.
The key viewpoints from Guotai Haitong Securities Co., Ltd. are as follows:
Market Evolution and Key Trends
China's color cosmetics market has experienced fluctuating growth, with premiumization and professionalization being the dominant trends. Benefiting from the dividend of online channels, China's color cosmetics market saw explosive growth starting in 2016. The market size grew from RMB 28.5 billion in 2016 to RMB 59.3 billion in 2019, achieving a CAGR of 27%. Post-2020, influenced by the pandemic, the waning of online traffic dividends, and the saturation of the core demographic market, the growth rate of color cosmetics has slowed, with the CAGR for 2020-2025 declining to 1.40%.
Against the backdrop of slowing volume growth, the trends of premiumization and professionalization in color cosmetics are evident. Taking the domestic top 50 color cosmetics brands in 2025 as a sample, the combined retail sales CAGR for leading mass-market, premium, and professional color cosmetics brands from 2016 to 2025 were 13%, 17%, and 24%, respectively. The market shares of premium brands and professional brands significantly increased from 16.9% and 5.3% to 31.5% and 16.3%, respectively.
In terms of timing, foreign professional color cosmetics brands in China experienced rapid growth alongside consumption upgrading starting around 2017, while domestic professional brands have accelerated their growth since 2021, entering a period of development opportunity.
Comparing Professional and Luxury Beauty Brands
Professional brands typically focus on the color cosmetics category, winning through their expertise. Luxury brands have a comprehensive layout across fragrances, color cosmetics, and skincare, establishing themselves through their aesthetic system. Looking at overseas markets, professional brands represented by MAC and Bobbi Brown rose to prominence by leveraging makeup artist expertise, product functionality, and color innovation. Their categories are mostly concentrated in color cosmetics. Brand growth relies more on continuous product innovation, and later stages demand high operational and globalization capabilities, which is why many join major cosmetics groups to expand under professional management.
In contrast, high-end luxury beauty brands like Chanel and Dior build upon their foundations in fashion, fragrance, and brand culture, positioning beauty products as a crucial carrier of their brand worldview and lifestyle. They typically form a multi-category matrix spanning fragrance, color cosmetics, and skincare. Their competitive advantage stems from a long-cultivated aesthetic system, cultural identity, and emotional value, thus possessing a higher ceiling.
In 2025, the global retail sales shares of leading luxury beauty brands Chanel and Dior reached approximately RMB 44.2 billion and RMB 38.4 billion, respectively, exceeding the roughly RMB 19.0 billion global retail sales of the leading professional beauty brand MAC. The disparity in sales scale within the China region is even more pronounced.
Regarding category coverage, fragrances account for over half of the global market for luxury brands. In the China market, the three categories of fragrance, color cosmetics, and skincare each constitute about one-third, showing a balanced distribution. Professional beauty brands, however, typically focus on the color cosmetics category, with some having limited expansion into skincare.
Pathway for Domestic Premium Brands
Domestic premium beauty brands, represented by MAO GEPING, are gradually upgrading from professional brands to premium brands representing Oriental aesthetics. MAO GEPING initially relied on the founder's IP for professional endorsement and gradually built brand loyalty through product development and the accumulation of its light and shadow aesthetic philosophy. It has successfully extended into the skincare category and is attempting to explore the fragrance category.
Since 2008, the brand has maintained good cooperation with the Olympic Games and national teams. In 2018, MAO GEPING collaborated with the Palace Museum's cultural and creative initiatives, subsequently launching six seasons of the "Qi Yun Dong Fang" (Oriental Charm) series products. Building upon its professional capabilities, it is progressively solidifying its brand culture and value recognition.
The firm believes such domestic brands have the opportunity to further evolve from "professional beauty" into "premium Oriental aesthetic brands," achieving a leap from product competition to competition for aesthetic discourse power.
Potential Risks to Consider
Key risks include: a potential slowdown in economic growth dragging down discretionary consumption; intensifying brand competition; and category expansion falling short of expectations.
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