The American affordable beauty brand e.l.f Beauty has announced its withdrawal from the Chinese market less than five years after it first entered.
According to Beijing Business Daily, e.l.f. announced its departure via its flagship stores on the e-commerce platform Tmall and short video platform Douyin on February 20th. The statement issued online read “Due to global strategy adjustments and objective factors, e.l.f. will temporarily leave the Chinese market from March 31, 2023, and the Tmall flagship store will take down its entire store on March 15, 2023.”
After opening its flagship Tmall store in 2018, e.l.f Beauty, known for its philosophy of providing high quality and inexpensive beauty products, struggled to gain a foothold among Chinese consumers. The brand’s best-selling product on Tmall only reached over 2000 sales, paling in comparison to other brands whose sales are in the millions.
E.l.f Beauty is far from the only foreign cosmetics brand that has been squeezed out of the Chinese market. Revlon also plans to shut its online flagship stores in March after years of financial instability, with one of its popular products even becoming known on Chinese television as “bankruptcy lipstick”.
China’s affordable beauty market is increasingly saturated with domestic brands, which have been much more successful at driving sales through huge marketing budgets and intimate knowledge of online channels for product promotion and consumer interaction. China’s e-commerce and social media landscape is a rapidly evolving space and foreign brands struggle to keep up with the latest techniques for effective digital marketing.
However, there is still an important place for international beauty brands in China. Jiang Han, a senior researcher at Pangoal, explained “In the minds of consumers today, the bands considered to be high-end are big international brands like L’Oréal, Estée Lauder. Reaching the status of high-end has always been a barrier for domestic cosmetics brands to cross. High-end means a lot of investment in research and development, technological innovation, and the accumulation of a long-term brand reputation, which is precisely where the local brands are disadvantaged.”