What happened
On April 18, Chinese skincare group Proya released its annual financial performance. In 2023, the company’s revenue hit $1.34 billion (8.9 billion RMB), up 39.5% YoY.
It’s the first time a Chinese cosmetics company has closed in on the 9 billion RMB ($1.35 billion) revenue mark. And it has done this within 21 years of launching.
Since the release, Proya’s stock price climbed 4.6% from $14.28 (103.46 RMB) on April 18 to $14.94 (108.25 RMB) per share at the close of trade yesterday. However, its share price has declined 7.59% year to date.
Proya’s revenue knocked Shanghai Jahwa from its long-held position as China’s cosmetics top dog after a 23-year reign.
It also released Q1 2024 financial results. Revenue was 2.18 billion RMB ($301.1 million) up 34.56% YoY, putting it well on track to blast past the 9 billion RMB milestone this year.
The Jing Take
Proya’s milestone moment signals a significant shift in the Chinese beauty market, which is no longer dominated solely by European and American players. Emerging Chinese independent cosmetics brands like Proya, Kans, and Marubi have grown to become formidable competitors.
Kans and Proya secured the top two spots for best-selling beauty brands in Douyin’s 1Q 2024 results. Both brands surpassed the 2 billion RMB ($276 million) sales milestone on Douyin.
Douyin’s beauty department continues to break records. In the first quarter of this year, beauty category Gross Merchandise Volume (GMV) on Douyin exceeded $6.7 billion (48.6 billion RMB), growing at 42% YoY to hit a new high. Based on this growth rate, Douyin beauty is projected to surpass $27.5 billion (200 billion RMB) in GMV this year.
Recognizing Douyin’s growing influence in the beauty market, Chinese businesses are intensifying their efforts on the platform. Proya, for example, has optimized its operations on Douyin by establishing different self-operated official accounts delineated by product line, allowing precise targeting of different demographic segments. The company also closely monitors emerging Key Opinion Leaders (KOLs) on the platform and customizes products and marketing messages to align with their fans’ characteristics, maximizing exposure and sales turnover rate.
Meanwhile, Kans has mastered the art of Douyin mini-dramas. The brand frequently collaborates with popular Douyin influencers, such as Jiang Shiqi (@姜十七) and Houben (@厚本), to create entertaining mini-dramas featuring product placements. According to Douyin, from February to August 2023, Kans released five mini-dramas, each attracting a massive viewership of between 650 million to 1.2 billion.
While domestic cosmetics companies still have a long way to go before challenging the market dominance of international giants like L’Oréal, whose annual revenue is 30 times that of Proya, these milestones underscore the importance of localization in the dynamic Chinese market. International brands must not underestimate the potential of homegrown players.
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.