Olive Young goes global as Etude House falters in China

Sephora announced a strategic partnership with Olive Young on January 21, formalizing what the global beauty industry increasingly accepts: K-beauty is no longer a cyclical trend, but a scalable system. The collaboration will launch in fall 2026 across 650 Sephora stores in the U.S. and Canada, alongside 48 locations in Hong Kong and Southeast Asia, with further expansion planned for the Middle East, the U.K. and Australia by 2027. The logic is straightforward. Olive Young has become South Korea’s most efficient trend-incubation engine, capable of rapidly validating ingredients, formats and price tiers before exporting winners abroad. Sephora, for its part, gains a steady pipeline of content-ready brands at a moment when global consumers demand visible efficacy and fast iteration. In China, however, K-beauty tells a different story. While the category’s global momentum accelerates, its mass-market footprint in China continues to contract. What once looked like a cyclical slowdown now reads as a structural reset. Etude House and the limits of legacy mass K-beauty That reset sharpened this month when Etude House, the mass color label owned by Amorepacific, again suspended its flagship store on Tmall amid an operating-entity transition and internal restructuring. It was the brand’s second online pause in four years, following the closure of all its mainland offline stores in 2021 and a prior Tmall exit in 2022. At its peak, Etude operated 85 stores across 25 Chinese cities, riding a formula that once defined K-beauty’s rise: playful aesthetics, affordable pricing and Korean pop-culture appeal. That formula no longer converts. From a group-level perspective, the retreat is increasingly framed as resource reallocation rather than a failed China bet. Alex Y. Suh, senior researcher at Trend Korea Company, says repeated China “pauses” should be read less as binary failure and more as portfolio discipline. “In an environment where the U.S. and Europe offer clearer growth visibility and more predictable pathways to brand-building, redirecting capital and managerial attention away from China can be a rational decision,” Suh says. For mass brands, she adds, China now requires “much heavier local execution and continuous reinvestment” than during K-beauty’s first expansion cycle. When brand legacy becomes a constraint Etude House is not an unfamiliar name in China — but its legacy has hardened in unhelpful ways. “Many Chinese consumers first encounter Etude during their student years and still associate it with being inexpensive but mediocre in quality,” Chloe Zhu, Euromonitor consultant says. “That ‘cheap and cheerful’ image is deeply embedded, which makes meaningful brand upgrading extremely difficult.” In today’s China, where domestic brands deliver increasingly strong quality at aggressive prices, that positioning becomes a structural disadvantage. At the same time, Zhu cautions against reading Etude’s struggles as the death of mass K-beauty altogether. “Chinese consumers continue to follow Korean beauty trends closely,” she says. “The issue is generational. Newer, more trend-driven brands have far more room to grow than legacy names.” Beauty’s middle price band turns hostile The pressure is most acute in China’s 50-200 RMB ($6-$25) segment — once K-beauty’s strongest foothold. Today, that band is dominated by domestic brands that are faster, cheaper and deeply embedded in China’s platform ecosystems. “This isn’t an Etude problem. It’s a generational problem,” says Hana Tolio, co-founder and CMO of Baekho Beauty Trading, mentioning also Innisfree, Tony Moly, The Face Shop, and Peripera. “Foreign affordable brands are getting squeezed out.” Chinese brands, she says, reach formulation parity while operating with lower cost bases and far greater platform fluency. “They are built for Douyin and Xiaohongshu from day one,” Tolio says. “Legacy Korean brands aren’t.” Crucially, Tolio ties the shift to consumer psychology. “The modern Chinese consumer is educated, economically powerful and rational,” she says. “She doesn’t buy cute narratives anymore. She buys proof.” K-beauty exports to China fall below 20% Macro indicators now reflect the same recalibration. In the first half of 2025, South Korea’s cosmetics exports to China fell below 20% of total shipments for the first time — a symbolic threshold for an industry that once treats China as its primary overseas growth engine. The decline does not signal industry contraction. Korean cosmetics exports reached a record $11.43 billion in 2025, buoyed by strong growth in the U.S., Europe and the Middle East. China’s share falls partly because the denominator expands elsewhere. Still, the shift inside China is real. Beauty consumption moves away from cultural affinity toward what Suh describes as a “verification logic,” where ingredient literacy, efficacy narratives and repeatable proof matter more than symbolic soft power. Skincare labels winning on Douyin are different from legacy brands That logic helps explain one of the market’s most persistent paradoxes: legacy Korean brands retreating from Tmall, while other Korean brands continue to generate meaningful GMV on Douyin. This divergence does not signal a revival of old-school K-beauty. It reflects a wholesale shift in how demand is created in China. “Tmall is intent-led commerce,” says Lauren Lee, host of the Korean Beauty Show podcast and founder of Jelly Ko. “Consumers arrive with a shopping mission. Douyin is discovery-led — demand is created through short video, livestream and creators.” Winning on Douyin requires constant content output, long-form livestream execution and rapid iteration — capabilities many legacy Korean brands lack. “The Korean brands that perform well on Douyin tend to be hero-SKU driven and built for fast testing,” Lee tells Jing Daily. “They are designed to demonstrate clearly on screen, not to sit on a physical shelf.” She adds that platform success does not transfer automatically. “You’re not seeing the same brands simply move from Tmall to Douyin,” Lee says. “You’re seeing different brands, with different products and different operating models.” Consumer channel shift affects local and global brands alike The Tmall-to-Douyin split is not a Korea-specific anomaly, but a structural channel shift affecting domestic and international brands alike. As a search- and shelf-based marketplace, Tmall is steadily losing share to social commerce platforms that stimulate demand more directly through content and livestreaming. For brands still building awareness, Douyin becomes the more efficient growth engine. However, brand structure matters. “Many of the Korean brands still heavily reliant on Tmall are older legacy brands,” Zhu says. “Brand aging amplifies the impact of channel migration, which is why their exit looks like decline.” Will a softer ‘hallyu ban’ boost K-beauty sales in China? Recent diplomatic engagement revives discussion around a potential easing of the unofficial “hallyu ban,” raising hopes of renewed cultural exchange. Zhu expects any upside to be real but limited. “It would be unrealistic to expect a return to the peak impact of the last K-beauty cycle,” she says, noting that today’s market is far more competitive and price-performance driven. Suh agrees that cultural visibility alone is no longer decisive. “Soft power can still be additive,” she says, “but conversion today is driven by platform-native execution and product performance, not cultural affinity alone.” What still scales in China Looking ahead, the dividing line is becoming clear. Korean beauty brands that continue to scale in China tend to combine science-anchored hero products, internalized content operations and locally empowered teams. National origin alone is no longer a competitive advantage. Brands anchored to a Tmall-centric paradigm, or constrained by slow HQ decision cycles, are far more likely to keep retreating. Sephora’s Olive Young partnership underscores the contrast. Globally, K-beauty is being systematized and scaled. In China, it is being filtered — not by nationality, but by operating model.

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Olive Young goes global as Etude House falters in China