Subscribe to our Jing Beauty to get the latest on China's world of beauty and wellness. What happened China’s National Bureau of Statistics revealed concerning figures for September, with cosmetics retail sales hitting 32.9 billion RMB ($4.6 billion), a year-on-year decline of 4.5%. More alarmingly, since June, the segment has racked up four consecutive months of negative growth. From January to September, total cosmetics retail sales reached RMB 306.9 billion ($43 billion), down 1% from the previous year. The beauty sector has notably lagged behind broader retail trends, with both monthly and cumulative performance falling short of expectations. The 4.5% drop in sales makes last month the second-worst September over the past decade. Even in September 2022, under the shadow of Covid-19, the decline was only 3.1%. This year’s figures mark the lowest growth rate in the past 10 years. The Jing Take Online platforms reflect the category’s struggles. From January to September, Taobao and Tmall’s beauty, skincare, and fragrance categories reported significant declines. GMV for skincare, body care, and essential oils fell 9.5% YoY to 99.13 billion RMB ($13.9 billion), while makeup, perfume, and beauty tools dropped 4.7% to 40.63 billion RMB ($5.7 billion). Offline, the situation isn’t much better. Sephora, owned by LVMH, reported nearly 300 million RMB ($42 million) in losses over the past two years, prompting layoffs and the appointment of Ding Xia, a former JD.com and Nike executive, as General Manager of Greater China to revitalize the business. Watsons, despite turning in solid global performance, saw its China revenue plummet 23% in the first half of 2024, with gross profit crashing by 67%. China’s beauty sector seems far from bouncing back. Since early 2024, nearly 20 international brands have closed stores or exited China entirely, including LVMH-owned Benefit, Shiseido’s Baum, and US-based premium beauty brand 3Lab. If international powerhouses are struggling, domestic brands are faring worse. The latest casualty: Chinese indie makeup brand Hedone, which announced earlier this month that it is shuttering. However, this should not discourage brands from investing in the world’s second-largest beauty market. For instance, Watsons has undergone a major leadership shake-up, including the appointment of new CEO Ni Wenling in China, underscoring the importance of the mainland market. Meanwhile, Estée Lauder has opened its first multi-level experiential flagship at Global Beauty Plaza in Sanya’s International Duty-Free Shopping Complex, in partnership with China Duty Free Group (CDFG). The store offers luxury services and high-performance skincare for traveling consumers. To mark the occasion, Estée Lauder Skincare spokesperson Dylan Wang joined company executives and CDFG representatives for a ribbon-cutting ceremony. Despite the recent downturn, China’s beauty market remains crucial, with major brands like Estée Lauder and Watsons still betting on its recovery. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.