For the last two years, China has largely disappeared from Western beauty’s growth narrative. Once treated as the industry’s mandatory expansion play, the market became shorthand for volatility: collapsing margins, endless discounting cycles, rising domestic competition, and increasingly complex regulatory demands. In boardrooms and investor conversations alike, China quietly shifted from aspiration to liability.
But during the recent BeautyMatter webinar, China's Comeback: What It Means for Global Beauty, moderated by founder and CEO, Kelly Kovack, executives with deep operational experience in the market argued that the global beauty industry may be misreading what is actually happening on the ground.
“The comeback is real,” said Adam Knight, co-founder of e-commerce platform YASO. “But the market that used to exist is gone.”
The conversation brought Knight together with Dawn Hilarczyk, Chief Operating Officer at Borghese, and Patricia Schuffenhauer, Chief Product Officer at Erno Laszlo, to unpack what China’s next chapter actually looks like and why brands that still rely on legacy operating models are struggling to compete.
The panel’s consensus was clear: China is no longer a scale-at-all-costs market fueled by explosive growth and easy distribution. It is now a highly disciplined, operationally demanding ecosystem where pricing control, supply chain agility, localized storytelling, and data ownership matter more than brute-force expansion.
That shift is forcing brands to rethink nearly every aspect of how they operate in the region.
For years, many Western brands entered China through trading partners that effectively acted as outsourced operators, controlling everything from pricing and promotions to logistics, customer data, and social media accounts. During the market’s boom years, that arrangement worked well enough. Sales growth often masked structural inefficiencies, and brands were willing to sacrifice visibility in exchange for rapid expansion. But as growth slowed and competition intensified, many brands realized they had very little control over their own business.
Knight described the traditional TP model as one that “took all of the complexity out of your hands,” but also “all of the control.”
That realization became a turning point for brands like Borghese. Hilarczyk explained that after reevaluating the company’s global business two years ago, the team discovered significant operational problems in China, including inconsistent assortments, gray-market activity, and major pricing discrepancies. “We had not been paying close attention to what had been happening,” she admitted.
Instead of exiting the market, Borghese decided to rebuild its China business from the ground up, partnering with YASO to restructure operations and regain visibility into the business.
The results were immediate. Since relaunching the partnership earlier this year, Hilarczyk said Borghese’s China business is up nearly 19% year over year from March through April. That operational reset reflects a broader industry shift away from the idea that China can be managed remotely.
“You have to be there,” said Hilarczyk. “The further you get from the market, the further you get from the market.”
For Erno Laszlo, that proximity has been critical to sustaining long-term growth in the region. Schuffenhauer described the market as still one of the largest skincare opportunities globally, particularly for Western brands with strong clinical credibility. But she stressed that success today requires a fundamentally different approach than it did even five years ago.
“It’s a highly localized game today,” she said, pointing to the importance of China-specific formulations, fast-moving social commerce strategies, and culturally relevant storytelling.
The conversation also challenged one of the most persistent narratives surrounding the Chinese market: that consumers now overwhelmingly prefer domestic brands out of nationalism.
Knight dismissed that explanation as overly simplistic. “What Chinese consumers are ultimately interested in is the same thing any consumer anywhere is interested in,” he said, citing efficacy, pricing, and product relevance.
While domestic brands have undeniably gained market share, particularly in color cosmetics, the panel argued that their advantage comes less from patriotism and more from operational speed. Chinese beauty companies move faster, launch faster, and iterate faster, supported by highly optimized supply chains and deeply integrated digital ecosystems that still outpace much of the West.
That acceleration is especially visible in commerce. Knight traced the evolution of China’s retail ecosystem from early e-commerce platforms like Tmall and JD.com to the rise of social commerce through platforms like WeChat, Red, and Douyin, and ultimately to today’s livestream-driven economy. But even livestreaming itself is evolving.
The era of giant influencer-driven sales events is giving way to more sustainable models, with brands increasingly building in-house livestreaming operations and focusing on what Knight described as “shelf commerce,” a more integrated form of social discovery and traditional e-commerce conversion.
For global brands, that complexity can feel overwhelming. Kovack described China’s commerce ecosystem as a deeply interconnected web of digital touchpoints, unlike anything currently operating in Western markets. “It was the first time in a really long time where I was seeing things I had never seen before,” she said of a recent trip to China.
Offline retail, however, still matters, particularly in skincare. Schuffenhauer argued that physical retail remains essential for building trust and allowing consumers to experience products firsthand. In China, she noted, offline retail has evolved into something highly experiential, centered around immersion, trial, and entertainment.
Product strategy also emerged as a major point of discussion. Borghese’s Advanced Fango Active Mud Mask still accounts for roughly 80% of the brand’s China business, illustrating both the power and risk of hero-product dependency. Hilarczyk acknowledged that while entering the market with a hero SKU is often the right strategy, long-term growth requires gradually expanding the assortment.
“You will not be able to build the business at the scale we want with just that one SKU,” she said. At the same time, brands entering China must navigate one of the world’s most demanding regulatory and supply chain environments. Schuffenhauer emphasized the importance of diversified sourcing, contingency planning, and regulatory readiness, particularly as ingredient scrutiny and geopolitical pressures continue to intensify.
Still, perhaps the panel’s strongest warning centered around pricing discipline.
China’s promotional culture, fueled by shopping festivals, livestreaming, and platform pressure, can quickly trap brands in destructive discounting cycles. Once consumers become accustomed to aggressive markdowns, reversing course becomes extraordinarily difficult.
Knight cautioned that many brands have effectively trained Chinese consumers to expect perpetual discounts, eroding both profitability and brand equity in the process. The solution, he argued, is not to abandon promotions altogether, but to become far more strategic about how value is delivered through bundling, gifts with purchase, and controlled assortment strategies.
As the conversation concluded, the panelists agreed on one thing: China remains one of the beauty industry’s most important markets. Not simply because of its size, but because it continues to function as an early indicator of where global beauty is headed next.
The market may no longer offer the easy growth story that once attracted Western brands in droves. But for companies willing to adapt operationally, culturally, and strategically, the opportunity is far from over.
