China cosmetics Report Interpretation

Overview

This monthly tracker reviews July 2026 China cosmetics demand across major online platforms, brand performance, channel mix, product launches and selected high-frequency industry indicators. Goldman Sachs describes a seasonally soft post-618 month, with resilient Douyin growth and strong local-brand share performance contrasting with mixed multinational trends.

Core views

China beauty online GMV grew 5% year on year in July 2026, decelerating from 11% in 2Q26 after a strong 618 campaign. Douyin GMV rose 18%, but this only partly offset declines of 9% on Tmall/Taobao and 19% on JD. Goldman Sachs cautions that July is seasonally small: it represented about 5% of full-year 2025 Tmall/Taobao GMV in its tracker. On Tmall/Taobao, total cosmetics GMV fell 9% and volume declined 11%, partly mitigated by 3% year-on-year ASP growth. The tracker points to continuing concentration among larger brands. Using Douyin’s leading cosmetics brands as a proxy, the top 50 brands grew at a high-20s percentage rate in July, ahead of the top 500’s low-20s growth, while the top 20 grew in the 30s. Luxury brands turned negative on Douyin, whereas mass-market brands were more resilient. Local brands also regained share against multinationals after 618. Across Goldman Sachs’ tracked companies, Douyin lost 1 percentage point of GMV share relative to Tmall/Taobao versus 2Q26. Local leaders materially outperformed. Mao Geping (MGP) grew 55% year on year, driven by 67% growth on Douyin and 40% and 26% growth on Tmall/Taobao and JD. Shanghai Jahwa grew 43%, supported by 80% Douyin growth and 44% and 85% growth for Dr. Yu and Herborist. Forest Cabin grew 37%, with Douyin up 46%. Giant Biogene and Proya Group grew 10% and 9%; Giant was supported by Comfy and Collgene, while Flowerknows and Off & Relax helped offset declines in Proya’s core brand and TIMAGE. Shanghai Chicmax rose 7%, Bloomage was flat, and Botanee and Yatsen declined 5% and 25%. Multinational performance was mixed and generally slower than local names. Estée Lauder Group grew 15%, led by Estée Lauder at 28% and Clinique at 43%, while La Mer rose 6%. L’Oréal grew 9%, supported by La Roche-Posay, SkinCeuticals and YSL at 88%, 61% and 20%, although L’Oréal Paris declined 10%. Shiseido fell 4%, Amorepacific 13%, Kose 23% and LG H&H 33%. The report also notes a July increase in in-house livestreaming and a continued decline in KOL GMV growth, consistent with brands reducing reliance on KOL-led selling. High-frequency indicators were mixed. China cosmetics retail sales rose 12.6% year on year in June, above total retail sales growth of 1.0%, but cosmetics sales’ CAGR versus 2021 slowed to 1.9% from 4.6% in May. Mainland cosmetics import value rose 6% year on year in June after a 10% decline in May, while import volume fell 5%. Imports from Korea and Japan increased 13% and 9%, while those from the US and France declined 27% and 3%. Korea duty-free turnover was US$738 million in June, down 7% year on year. Goldman Sachs calls MGP its preferred cosmetics pick, arguing that continued momentum after 618 and a recent share-price pullback have reset expectations for slower first-half 2026 net-profit growth in the 20s percentage range while it remains a leading cosmetics player. The institution continues to like Giant Biogene despite July tracking below management’s second-half outlook, because July is seasonally soft and Giant launched its offline medical-aesthetics business in early August. It reiterates Buy on Forest Cabin, citing strong growth and more attractive valuations. Sector valuation exhibits show China cosmetics players trading at 18x 12-month forward P/E, versus 26x for global cosmetics players.

Analysis framework

Goldman Sachs combines monthly GMV tracking across Tmall/Taobao, JD and Douyin with brand-level comparisons, platform and livestreaming mix analysis, product-launch monitoring, retail-sales and import data, Korea duty-free data, and peer valuation comparisons. It interprets July against the seasonal post-618 backdrop and separates local from multinational and price-positioning trends.

Methodology notes

• Industry AnalysisSupply-demand framework

  High-frequency online GMV, retail-sales, import and duty-free tracking

  The report uses demand indicators across platforms and channels to assess the pace and composition of China cosmetics spending.

• Industry AnalysisVolume-price decomposition

  Tmall/Taobao GMV split into volume and ASP

  The tracker explains the July GMV decline using an 11% volume decline partly offset by 3% ASP growth.

• Valuation methodsP/E and PEG Valuation

  Forward P/E-based price targets discounted to end-2026 using cost of equity

  For covered companies, Goldman Sachs derives target prices from 2027E P/E exit multiples, adjusted for company characteristics and discounted back using stated costs of equity.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Mao Geping Cosmetics Co. (1318.HK)

  Goldman Sachs’ preferred cosmetics pick and a leading local-growth beneficiary.

  Strengths

  July GMV grew 55% year on year; Goldman Sachs cites sustained post-618 momentum and market-expectation reset after the share-price pullback.

  Comparison

  Outperformed tracked local and multinational peers in July.

  Risks

  Slower penetration of anti-aging and mid-to-high-price beauty products, higher marketing costs, and stronger overseas premium-brand competition.

• Giant Biogene Holding (2367.HK)

  Covered local cosmetics and medical-aesthetics company.

  Strengths

  GMV grew 10% year on year, supported by Comfy and Collgene; launched offline medical aesthetics in early August.

  Weaknesses

  July tracked below management’s second-half 2026 outlook.

  Comparison

  Growth lagged MGP, Shanghai Jahwa and Forest Cabin but exceeded several weaker local peers.

  Risks

  Slower professional skin-treatment growth, intensified competition, inability to develop successful products and regulatory risk.

• Shanghai Forest Cabin Cosmetics (2657.HK)

  Covered local cosmetics company.

  Strengths

  GMV grew 37% year on year, driven by 46% Douyin growth; Goldman Sachs cites a strong growth profile and attractive valuations.

  Comparison

  One of the report’s local outperformers, behind MGP and Shanghai Jahwa.

  Risks

  Slower anti-aging and oil-essence penetration, online-margin dilution, competition and promotional intensity, and concentration in essence oil.

• Shanghai Jahwa United (600315.SS)

  Covered local cosmetics company.

  Strengths

  GMV grew 43% year on year, with Dr. Yu and Herborist growing 44% and 85%.

  Comparison

  Second only to MGP among the highlighted local leaders.

  Risks

  Overseas-business impairment, further Herborist store closures, weaker Dr. Yu/VIVE sales, online execution risk and management-transition impact.

• Bloomage Biotechnology Corp. (688363.SS)

  Covered local cosmetics company.

  Strengths

  Biohyalux grew 2% and Medrepair 138% year on year.

  Weaknesses

  Overall July GMV was flat; QuadHA and Biomeso declined 30% and 29%.

  Comparison

  Lagged the report’s local-growth leaders.

  Risks

  Faster skincare recovery, stronger cosmetics demand, less intense competition and faster decline in selling-expense ratio are cited as risks to the Sell view.

Key data

• China beauty online GMV growth5% yoy in Jul-26Decelerated from 11% yoy in 2Q26.
• Platform GMV growthDouyin +18%; Tmall/Taobao -9%; JD -19% yoyDouyin partly offset weakness on other tracked platforms.
• Mao Geping GMV growth55% yoyDriven by Douyin +67%, Tmall/Taobao +40% and JD +26%.
• Shanghai Jahwa and Forest Cabin GMV growth43% and 37% yoyThe report identifies both as local outperformers.
• Estée Lauder and L’Oréal GMV growth15% and 9% yoyThe strongest tracked multinational groups in July.
• China cosmetics retail sales+12.6% yoy in Jun-26Compared with +1.0% growth for average retail sales.
• China cosmetics valuation18x 12-month forward P/EGlobal cosmetics players traded at 26x as of Aug. 7, 2026.

Impact & implications

The report characterizes July as a low-season, post-618 normalization rather than a stand-alone indicator of full-year demand. It sees domestic premium and selected local brands retaining a relative growth and share advantage, while multinational results vary sharply by brand and channel. Channel strategy is shifting toward more in-house livestreaming and less KOL dependence.

Risks

• For Mao Geping, slower penetration of anti-aging, oil-essence and mid-to-high-price beauty products, higher marketing costs and tougher competition could weigh on results.
• For Giant Biogene, slower professional skin-treatment demand, competition, unsuccessful product development and regulatory risk are explicit risks.
• For Shanghai Jahwa, overseas impairment, more loss-making Herborist store closures, weaker Dr. Yu/VIVE growth, online execution and management transition are risks.
• For Forest Cabin, category penetration, online-margin dilution, promotion intensity and concentration in essence oil are identified risks.

What to watch

• Whether Douyin’s growth continues to offset weakness on Tmall/Taobao and JD after the 618 period.
• The relative GMV and share performance of local brands versus multinational brands.
• The shift from KOL-led selling toward in-house livestreaming.
• New product launches and the sales ramp of new brands and categories.
• Giant Biogene’s progress in its offline medical-aesthetics business launched in early August.