Can K-beauty retailers crack China a second time?

Over the past seven months, several South Korean beauty brands have scaled back in China. Etude House temporarily closed its Tmall flagship store at the start of 2026, Mamonde shut its remaining online channels after once reaching more than 4,000 points of sale, and Sooryehan withdrew from stores and digital platforms. Of the 12 beauty brands reported to have stopped operating or substantially contracted in China during the first half of 2026, four were Korean — the largest national group represented in the retreat. Yet, even as one generation of K-beauty brands heads for the exit, another is preparing to move in. Six years after closing its last Chinese store, CJ Olive Young is considering a return as a platform for emerging Korean labels. Musinsa, the fashion and community platform backed in China by sportswear giant Anta, has completed regulatory filings for its first beauty products and is pursuing a plan to operate 100 Chinese stores by 2030. The market is more expensive and less forgiving, with stronger domestic competitors and a retail environment in which millions of followers no longer guarantee profitable sales. What has changed, and can these companies avoid the mistakes that ended the previous K-beauty boom? “K-beauty in China is best understood as three separate waves, not one continuous story that simply paused and resumed,” said Hana Tolio, chief marketing officer of Asian beauty wholesaler Baekho Beauty. The latest wave, she said, “runs on entirely different fuel.” From flagship expansion to platform economics Olive Young’s first China strategy belonged to an era when imported beauty retailers competed through store networks and mall footfall. The company entered China in 2013, when Korean dramas and pop stars translated directly into demand for cushions, lip tints and sheet masks. Its last Chinese store closed in 2020. The model weakened after political tensions disrupted Korean entertainment from 2016. Covid-19 later damaged offline traffic, but the deeper change was competitive: Chinese beauty companies improved their formulations, identities, data capabilities and social-commerce operations. Returning Korean brands found domestic alternatives that were faster, cheaper and more culturally fluent. “The 2013 model asked a single Korean-owned flagship to win against Watsons on real estate and footfall,” said Tolio. When the Korean Wave lost momentum, she added, the business had little to fall back on because its commercial case remained tied to dramas, idols and in-person retail. The platform model distributes that risk. Olive Young could carry a wider group of emerging labels, test them through digital channels and rotating assortments, and concentrate investment on products that demonstrate demand. “The platform model replaces a high-fixed-cost retail strategy with a more flexible approach,” said Lauren Lee, host of the Korean Beauty Show podcast and founder of K-beauty brand Jelly Ko. “Olive Young does not need every brand to succeed: it can test demand, rotate assortments and invest behind the products that gain traction.” Olive Young could also provide market data, consolidated logistics and negotiating power that smaller brands lack when entering China independently, Lee added. South Korean policymakers have discussed it as a “container platform” carrying domestic brands overseas rather than simply another foreign store operator. HwaHae, the Korean ingredients and reviews platform, has taken a similar route, building on Tmall, Xiaohongshu (also known as RedNote) and Douyin before opening a Shanghai store in May. Lower fixed costs do not remove the need for local content, differentiated products and sustained acquisition spending. Global momentum, a harder China market The timing is also informed by K-beauty’s renewed strength elsewhere. Global Korean beauty sales rose 53% in 2025 and 131% over two years, according to Niq. Sales increased 135% across Brazil and Mexico and 58% in Western Europe, where Korean brands now account for 10% of online skincare sales. Much of that growth has been digital. E-commerce accounts for 76% of K-beauty sales in North America, while Korean beauty sales on TikTok Shop across the UK, US, Spain and Germany increased 430%. Products from acne patches to beauty devices have moved into mainstream routines. China, however, is not another underdeveloped export market. Consumers already shop through mature content-commerce ecosystems, and domestic brands are adept at turning product development into platform-native campaigns. The same infrastructure that lowers the need for stores exposes incoming brands to some of the world’s most competitive customer-acquisition channels. Product discovery has shifted to Douyin, Xiaohongshu, livestreaming and algorithmic recommendations. Smaller brands can reach consumers without nationwide distribution, but must continually buy or earn attention. “The TikTok and Douyin algorithm is what pushes this third wave forward, in a way the first two never had access to,” said Tolio. Medicube, she argued, should not be viewed as a new Etude House: its growth is based on visible results, devices and short-form creator demonstrations rather than the cultural reach of one drama or celebrity. Musinsa tests fashion’s permission to sell beauty Musinsa enters from a stronger lifestyle position. Founded as an online streetwear community, it has grown into a platform spanning shopping, editorial content, community and private-label products, with more than 15 million members and 8,000 brands. Its China expansion is backed by an Anta Group joint venture with registered capital of 800 million RMB ($118 million). Musinsa owns 60% and Anta 40% , gaining local retail, supply-chain and operational expertise. It aims to operate more than 10 Chinese stores by the end of 2026 and 100 by 2030. Early results suggest its fashion proposition has found an audience. Online and offline transaction value surpassed 50.59 million RMB ($7.5 million) within 100 days of entering China, while online sales increased 9.3-fold. Its two Shanghai stores attracted more than 100,000 visitors, with millennials and Gen Z accounting for over 85% of purchasers. Musinsa’s stores combine rotating labels, affordable basics, K-pop content and emerging designers previously accessed through overseas shopping or resellers. The format functions as a source of discovery rather than a conventional product warehouse. Beauty offers a second growth engine, although Musinsa’s track record has been established mainly in South Korea. Musinsa Beauty grew more than 50% in 2025, while combined transaction value across its four in-house brands increased 120%. Its Seongsu flagship carries more than 800 beauty brands, and category transaction value doubled during its early 2026 New Year promotion. “Musinsa Beauty’s actual strength is velocity — more than 1,000 new products a month, roughly 100 of those launched exclusively on the platform before anywhere else,” said Tolio. “That model sells discovery, not clinical claims.” Whether that model can transfer to China remains uncertain. Musinsa’s fashion platform has built trust around curation and access to Korean trends, but beauty purchases require different forms of authority. Fragrance, color cosmetics and limited-edition collaborations can be driven by taste; skincare must compete on ingredients, efficacy and scientific evidence. “A serum from a fashion platform will always face a harder efficacy test with a Chinese consumer who has been trained by Proya and Winona to demand ingredient proof first,” Tolio said. Musinsa’s most credible starting points may therefore be fragrance and color cosmetics rather than an immediate contest with established Chinese skincare specialists. Korean identity is no longer enough K-beauty retains strengths in sophisticated textures, gentle formulations, sunscreens and rapid commercialization. Chinese brands have nevertheless closed much of the innovation and value gap, particularly in color cosmetics, packaging and product development. Flower Knows has built an immediately recognizable visual universe, while some older Korean makeup brands lost distinctiveness. Tolio sees greater remaining credibility in “hanbang” (traditional Korean medicine and holistic healing) products using ingredients such as ginseng and mugwort, and in technology-led beauty represented by Medicube parent APR. Mid-market skincare built around accessible ingredient stories is harder, because Chinese competitors can offer comparable propositions at lower prices and communicate them with greater local precision. Retail conditions add another layer of risk: Watsons and SaSa have reduced their footprints, while Chinese multibrand retailers including Harmay, The Colorist and Wow Colour have closed stores or scaled back. The opportunity is therefore not a straightforward K-beauty revival. Olive Young is betting that curation, data and shared infrastructure can provide a lower-risk route for emerging brands. Musinsa is betting that its fashion community can support a broader Korean lifestyle ecosystem. Both are trying to translate global K-beauty momentum into a Chinese model that is more localized, flexible and digitally native than the one that came before. “Made in Korea can still support discovery, but it is no longer enough to sustain retention once acquisition costs, discounting and competition from domestic brands are taken into account,” concluded Lee.

Can K-beauty retailers crack China a second time?

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Can K-beauty retailers crack China a second time?

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