Can Proya Compete with L’Oréal? Growth meets R&D gaps

Proya Cosmetics has become the first Chinese beauty brand to surpass 10 billion RMB ($1.5 billion) in annual revenue — a landmark achievement for China’s domestic skincare sector. With full-year 2024 sales reaching 10.8 billion RMB ($1.5 billion) and net profit climbing 30% to 1.55 billion RMB ($215 million), the Hangzhou-based group has outpaced local rivals and narrowed the gap with international giants, such as L’Oréal, Estée Lauder, and Shiseido. But as Proya cements its lead in China’s skincare boom, its long-term outlook hinges on transformation, not repetition. For now, Proya is the poster child for C-beauty success. Yet, its future depends on whether it can shed its reliance on viral hero products, short-term traffic spikes, and a digital-only playbook — and instead, mature into a global beauty powerhouse with sustainable innovation, channel depth, and premium positioning. From third-tier dominance to first-class strategy Proya’s roots in China’s lower-tier markets laid the foundation for today’s scale. “Proya targeted China’s lower-tier cities early on, avoiding direct competition with major international players,” Haier Liu, senior trend researcher at The Chinese Pulse strategy agency. “They were one of the first to open a flagship store on Pinduoduo and experimented with mini-drama marketing to reach price-sensitive consumers.” This scrappy, hyper-local approach evolved into a sophisticated multibrand strategy. In addition to its eponymous core label, Proya Group now owns rising players like Timage, a makeup brand with a neo-Chinese aesthetic, and, and Off&Relax, a shampoo and conditioner line benefiting from the “skinification” of haircare. The brand’s matrix also includes Inshaba, which targets trend-conscious Gen Z. “Proya has a sophisticated multi-brand strategy that masterfully balances its core brand with specialized sister brands while executing an omnichannel approach that excels in both digital and experiential realms,” says Olivia Plotnick, founder of Shanghai-based Wai Social digital agency. “They’ve really nailed the livestream game.” Proya’s hero product strategy — especially its Dual Anti and Red Ruby serum lines — has driven consistent Tmall dominance in serums, creams, and sheet masks. Yet, these very successes now reveal vulnerabilities. Plateauing growth and marketing burnout While the core Proya brand generated 8.58 billion RMB ($1.2 billion) in 2024, that growth is beginning to slow. The group’s second-largest label, Caiting, posted 1.19 billion RMB ($165 million) in revenue, up 19%, but far from its triple-digit growth in prior years. “As a color brand, Caitang faces the cyclical nature of trend-driven consumer behaviour,” Liu says. “Its product innovation cycle may be lagging behind expectations.” Plotnick warns of overreliance on a model that prioritizes virality over longevity. “Proya’s long-term growth hinges on evolving from a ‘hero product + traffic’ model to a ‘R&D + brand + channel’ ecosystem,” she says. “They need to build a moat beyond just what’s trending.” The data supports this. The company spent 5.16 billion RMB ($715 million) — nearly 48% of revenue — on sales and marketing in 2024. Meanwhile, offline sales dropped 13.6% to just 532 million RMB ($73.8 million), highlighting a lack of presence in China’s high-end malls or prestige retail spaces. “Without accelerating proprietary ingredient development and building true premium brand equity, Proya risks being caught in the dreaded ‘middle-market squeeze’ — neither the value leader, nor the prestige player,” Plotnick adds. R&D gap undermines premium push Proya’s investment in R&D reached 210 million RMB ($29.1 million) last year, just under 2% of total revenue. While the company has labs in Hangzhou, Shanghai, and a new one in Paris, it still lacks the clinical rigor and patented innovations that global giants bring to market. “In skincare, their scientific capabilities are hard to compare with international giants,” said Liu. “They need more exclusive R&D innovations, not just reusing similar ingredient stories.” Plotnick echoes this: “Proya’s innovation capabilities remain fundamentally outmatched by international giants in both investment scale and scientific breakthrough depth. They must prioritize clinical validation of proprietary ingredients and upgrade offline experiences to support true premium positioning.” Interestingly, in the makeup space, Proya’s nimbleness occasionally gives it an edge. “Timage and Insbaha are often more accurate and quicker at catching trends in color and usage than international brands,” Liu says. But in skincare — where authority, patents, and clinical proof matter more — the brand’s reliance on familiar actives like niacinamide or peptides limits its ability to move upmarket. Capturing Gen Z, but losing the high ground? Proya has been highly effective in capturing the attention of China’s digitally native Gen Z through livestreaming, influencer partnerships, and playful product design. But maturing its brand image remains a challenge. “Proya stands at a critical crossroads,” says Plotnick. “Their digital savvy and hero product success with Gen Z hasn’t yet translated into the scientific credibility or premium experiences needed for upmarket success.” Liu points to the company’s recent repositioning efforts including appointing high-profile spokespersons like Liu Yifei and Jackson Yee, and the launch of Correctors, a more premium, function-forward skincare sub-brand. “Proya’s overall social media image has elevated — from a youthful image to one that’s more professional,” Liu says. “But transitioning perception is not the same as delivering a premium experience.” Global aspirations, local constraints Proya’s ambition to become one of the top 10 beauty companies in the world remains aspirational. With just $1.5 billion in annual revenue, it is far behind even the smallest incumbents in the global top 10, such as Puig. To bridge that gap, Proya would need to reconfigure its domestic playbook. “Proya’s global ambitions demand a total transformation — dramatically elevating scientific credentials while executing disciplined international expansion,” says Plotnick. “This might be best executed with culturally aligned Southeast Asian markets.” Liu agrees, saying, “their star products are tailored for Chinese consumers. Expanding overseas will require deep research into new preferences and market education around ‘China R&D’ and local ingredients. Korean skincare brands’ overseas success offers a blueprint.” During Proya’s 2024 annual meeting, the firm’s chairman Hou Juncheng shared plans to acquire international brands in a strategic push to close product gaps and strengthen its position in premium beauty, as domestic competition intensifies. The company is eyeing assets in categories like baby care, fragrance, and men’s skincare through its Paris branch – mirroring moves by local peers such as Yatsen and S’Young Group, which have scooped up high end labels like Eve Lom, Galénic, and EviDenS de Beauté. As analysts shared while Proya has successfully incubated mass-market hits, scaling in the luxury segment remains costly and challenging. Acquiring established brands offers a faster route to premium credibility, especially as operating niche or high-end lines independently in China still demands significant resources. The road ahead: From traffic to trust Proya’s biggest threat may not be competition but complacency. The brand must reconcile the tension between its short-term traffic wins and its long-term need for scientific, cultural, and retail credibility. “Proya is now at a strategic crossroads,” says Plotnick. “Sustained success will depend on whether it can transform itself from a platform native brand to an omnichannel powerhouse, from a fast-follower to an original innovator, and from a domestic leader to a global aspirant.” For a brand that’s already made history, the next challenge is whether it can do something even harder: build legacy.

Proya breaks revenue ceiling, but can it cross borders?

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Proya breaks revenue ceiling, but can it cross borders?