China online cosmetics GMV rose 14% YoY in May, with Douyin and subsidies driving acceleration versus 1Q

Overview

This report is Goldman Sachs' monthly tracker on China cosmetics, covering GMV across platforms including Tmall/Taobao, Douyin, and JD.com, brand sales performance, 618 shopping festival progress, KOL livestream rankings, and high-frequency industry data. The report notes that China's online cosmetics sales accelerated significantly in May 2026 versus 1Q, partly due to a weaker Women's Day base in 1Q and increased subsidies from platforms and local governments.

Core views

The core views are: first, at the industry level, online GMV rose 14% YoY in May, accelerating from +9% in 1Q, with Douyin contributing the most; second, domestic brands generally improved on the back of subsidies, a low base, and 618 presales, though divergence among brands remains large; third, multinational brands, especially Estee Lauder, L'Oreal, Shiseido, and several premium and functional skincare brands, continued to outperform; fourth, tighter promotional regulation may reduce the future boost from subsidies, but it could help reduce price wars and improve competitive discipline in the industry.

Analysis framework

The report mainly uses platform GMV tracking, brand YoY growth, phased completion rates during 618, leading KOL livestream rankings, high-frequency retail sales data, and company valuation methodologies to assess industry momentum and the investment implications for individual stocks.

Methodology notes

• Sales trackingPlatform GMV YoY and share changes

  Measure the strength of online demand through YoY changes in cosmetics GMV across Tmall/Taobao, Douyin, and JD.com.

  Total online cosmetics GMV rose 14% YoY in May, with Douyin up 30% YoY, Tmall/Taobao up 1% YoY, and JD.com down 17% YoY, indicating that Douyin remains the main growth platform.

• Event tracking618 shopping festival phased tracking

  Use windows such as May 15 to June 8 to observe brand GMV growth and completion rates.

  Douyin 618 data for the first 25 days show Forest Cabin leading, while Proya, Botanee, Mao Geping, and Giant Biogene also maintained growth, helping assess brand momentum during the major shopping festival.

• Valuation methodsTarget price P/E valuation method

  Most covered companies use 2027E P/E discounted back to the end of 2026 to derive a 12-month target price.

  The report states that the target prices for Proya, Botanee, Bloomage, Giant Biogene, Mao Geping, Shanghai Forest Cabin, and Shanghai Jahwa are all based on adjustments to 2027E P/E, COE, and industry benchmark multiples.

Asset mapping & comparison

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

• Proya Cosmetics (603605.SS)

  Leading domestic beauty company and covered name

  Strengths

  Same-store growth on Douyin in the first 25 days of 618 was 64%, overall group performance was strong, and the core Proya brand grew 15% YoY in May.

  Weaknesses

  The report assigns a Neutral rating; management changes, slowing growth, and potential dilution from an H-share listing weigh on the valuation discount.

  Comparison

  It still ranks relatively high among domestic brands, but its first-day top KOL ranking fell from No. 1 in last year's 618 to No. 3.

  Risks

  New product development, competitive intensity, selling expense ratio, and slower-than-expected ramp-up of new brands.

• Botanee Biotech

  Domestic functional skincare brand and covered company

  Strengths

  May GMV rose 43% YoY, same-store growth on Douyin in the first 25 days of 618 was 51%, and Winona maintained a solid completion rate.

  Weaknesses

  The report rates it Neutral, and penetration of functional skincare and contribution from new categories still need to be validated.

  Comparison

  618 performance was stronger than that of most weaker domestic brands, but growth was lower than Forest Cabin and Proya.

  Risks

  Uncertainty around functional skincare penetration, market share, revenue contribution from new brands, and A&P investment.

• Giant Biogene Holding (2367.HK)

  Covered company in recombinant collagen and functional skincare

  Strengths

  The report maintains a Buy rating, May GMV rose 6% YoY, growth accelerated on Douyin so far in June during 618 off a low base, and the target price is HK$46.

  Weaknesses

  Trends are diverging across some brands, with Comfy declining during the 618 period while Collgene was stronger.

  Comparison

  It is seen as a potential beneficiary in a less promotional environment, but its short-term growth is below Forest Cabin, Proya, Botanee, and Mao Geping.

  Risks

  Professional skincare market growth slower than expected, intensifying competition, product development failure, and regulatory risk.

• Mao Geping Cosmetics Co.

  Covered company in premium domestic color cosmetics

  Strengths

  The report maintains a Buy rating, May GMV rose 22% YoY, Douyin was up 60%+ YoY in early June, and 618-to-date was up 40%+ YoY.

  Weaknesses

  Expansion in premium color cosmetics depends on the purchasing power of core consumers and penetration into new categories.

  Comparison

  It is relatively resilient among domestic premium brands, and the report target price is HK$106.

  Risks

  Slower-than-expected penetration of mid-to-high-end beauty products, rising marketing costs, and intensified competition with overseas premium brands.

• Bloomage Biotechnology Corp. (688363.SS)

  Covered domestic company related to functional skincare and ingredients

  Strengths

  Some brands such as Biohyalux and Medrepair are relatively more resilient.

  Weaknesses

  The report maintains a Sell rating, May GMV declined, brands such as QuadHA were a clear drag, and the target price is Rmb30.

  Comparison

  Compared with Botanee, Proya, and Giant Biogene, Bloomage performed weakly in May and during 618.

  Risks

  Cosmetics demand, competitive intensity, improvement in selling expense ratio, and slower-than-expected repair in business mix.

• Estee Lauder、L'Oreal、Shiseido

  Important reference assets for multinational brands in China's cosmetics market

  Strengths

  They grew 36%, 16%, and 11% YoY, respectively, in May; in early June, L'Oreal and Estee Lauder Group were both up 50%+ YoY on Douyin.

  Weaknesses

  There is divergence among brands within each group, and some mass-market brands may face competitive pressure from domestic brands.

  Comparison

  Multinational brands remain relatively strong in premium and functional skincare segments, outperforming LG H&H, Amore, and Kose.

  Risks

  Promotional regulation, strength of consumption recovery, channel expenses, and competition from domestic brands.

Key data

• Total online cosmetics GMV in May+14% YoYAccelerating from +9% YoY in 1Q.
• Douyin cosmetics GMV in May+30% YoYSignificantly higher than +16% YoY in 1Q.
• Tmall/Taobao cosmetics GMV in May+1% YoYSlightly improved from flat in 1Q.
• JD.com cosmetics GMV in May-17% YoYWeaker than -8% YoY in 1Q.
• Domestic brand performance in MayForest Cabin +110%; Botanee +43%; Shanghai Jahwa +27%; Mao Geping +22%; Proya +8%; Giant Biogene +6%Bloomage and Yatsen declined about 19%/36% YoY, highlighting clear brand divergence.
• Multinational brand performance in MayEstee Lauder +36%; L'Oreal +16%; Shiseido +11%; LG H&H -34%; Amore -31%; Kose -22%Premium and functional skincare brands performed better, while some Japanese and Korean brands remained under pressure.
• Douyin same-store growth of domestic brands in the first 25 days of 618Forest Cabin triple-digit growth; Proya +64%; Botanee +51%; Mao Geping +43%; Giant Biogene +20%Forest Cabin benefited significantly from a low base.
• Douyin performance of multinational brands from June 1 to 8Both L'Oreal and Estee Lauder Group were up 50%+ YoYShowing that multinational brands have remained strong so far in June.
• Cosmetics retail sales in April+4.7% YoYHigher than overall retail sales growth of +0.2% YoY in the same period.

Impact & implications

In terms of investment implications, improved short-term sales momentum supports the view of a recovery in industry conditions, with the Douyin channel and 618 subsidies providing a clear lift to GMV. Domestic leaders such as Proya, Giant Biogene, Mao Geping, and Shanghai Jahwa may benefit in a more rational pricing environment, while multinational premium brands continue to show strong resilience. However, if regulation cools subsidies, growth in the next round of major promotions may slow, and the industry will need to shift from price subsidies toward competition in product strength, brand strength, and service.

Risks

• If local government and platform subsidies are curtailed by regulation, GMV growth in the next shopping festival may slow.
• Industry competition may still show up through pricing, promotions, and traffic costs, compressing brand profit margins.
• Divergence among domestic brands remains clear, and high growth driven by a low base may not be sustainable.
• There is also brand divergence within multinational brands, and mass-market lines may face competition from domestic brands.
• New product development, functional skincare penetration, selling expense ratio, and the efficiency of livestream/KOL spending may all affect company performance.
• Regulatory requirements on 618 promotional rules, subsidy wording, and merchant information disclosure may change platform growth models.

What to watch

• Full 618 shopping festival GMV in June, brand completion rates, and actual post-return sales quality.
• Share changes of Douyin relative to Tmall/Taobao, as well as the mix between brand self-broadcasting and KOL placements.
• Whether local government and platform subsidy policies continue, and whether regulation further restricts price wars.
• Post-promotion sales retention for domestic leaders such as Proya, Botanee, Giant Biogene, Mao Geping, and Shanghai Jahwa.
• The sustainability in the China market of multinational premium and functional skincare brands such as Estee Lauder, L'Oreal, and Shiseido.
• Whether weaker brands such as Bloomage, Yatsen, LG H&H, Amore, and Kose show a turning point.