Rumors are swirling that P&G is winding down the First Aid Beauty (FAB) business in the Chinese market. At the end of 2022, the brand's official accounts on Xiaohongshu, WeChat, and Weibo stopped being updated. The brand has closed its flagship stores on Douyin and Tmall, while personal stores on Taobao are offering clearance discounts on FAB products.
Founded in 2009 by beauty industry veteran Lilli Gordon, the brand was born from an identified need for efficacious, fun, sensitive skincare solutions. She built FAB centered around healing skin. In 2018, P&G acquired the brand from private equity firm Castanea Partners, who backed the brand in 2015. At the time of the deal, which was reported to be $250 million, FAB had net sales in the neighborhood of $50 million.
FAB filled the luxury price point SK-II and mass-market price point of Olay and provided an access point into the specialty retail channel in North America through Sephora, Ulta Beauty, and QVC. Gordon noted at the time under P&G, FAB would be able to increase its global footprint “much faster and so much more effectively."
The brand first entered the Chinese market in 2020 with a significant investment to get it off the ground. While traction in the market has been slow, insiders are surprised by the exit because a foundation was being built. The FAB Tmall store was at almost 1 million fans with a presence established across Douyin and JD built through big-budget livestreamers like Austin Li and celebrities like Li Yifeng and Wang Xinlin.
With no official comment from P&G, it's unclear if FAB is doing a reset or if the brand is exiting the market. The Chinese beauty market has matured and become far more competitive.
Clean Beauty is still relatively embryonic in China. Consumers don't have a clear idea of what "clean beauty" (纯净美妆) means. In a crowded marketplace, the adoption of new concepts requires high acceptance rates to move a niche trend into a mainstream idea.
FAB faced stiff competition from domestic brands operating at a similar price point with an intuitive understanding of consumer needs, providing a competitive advantage and the ability to adapt quickly. Clean C-Beauty brands Zhuzhan, Dewy Lab, Fanfuzi, and Fabloox have all received investment in the past 2-3 years and have invested time and energy educating on the concept of clean beauty, but similar to the US market, there isn't one coherent view.
In addition to the clean positioning, FAB leaned into a skin-repair narrative instead of focusing on sensitive skin, which hasn't worked. Domestic competitor Winona makes similar claims, but has gained success crafting a strong, sensitive skin positioning in the skincare category.
Besides the challenges with positioning and domestic competitors, the brand has received some pretty negative feedback online—comments that the products smell bad and that it’s suited to “North American skin” rather than Chinese skin are prevalent.
Jack Porteous, Client Services Director at Samarkand Global Limited, shared, “FAB were fighting the same battle faced by Chinese and International clean beauty brands in China—an unclear position for the entire 'Clean Beauty' segment in the mind of consumers, with no defined understanding of what it actually entails. Couple that with increasingly intense competition from Chinese brands at the same price point, and some challenging feedback about the products from consumers and clearly P&G have taken the decision that it’s better to throw the towel in—at least for now.”
P&G also acquired Snowberry in 2018, a New Zealand brand positioned as skincare with no compromises on functionality, safety, or the inclusion of ingredients in their optimum quantities. Snowberry entered the Chinese market for the second time in 2019, promoting the concept of pure skincare and launching products based on the popular ingredient blue copper peptide. By the end of 2022, P&G quietly closed the Snowberry Tmall official flagship store.
China expert Elizabeth Kopelman, CEO of Frisson Beauty, warns, "There’s more pain coming in China. To sidestep it, brands need to have clarity of purpose, localize and sharpen their message, and consistently prove their relevance to win over the discerning Chinese beauty consumer. The days of swooping in with a one-size-fits-all approach are long gone."
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