The decline of beauty counters: What’s driving China’s retail shift?

Over the past two years, an increasing number of premium skincare and makeup brands, including Decorté and Ipsa, have been systematically withdrawing from department stores in China. Beauty counters, once a staple of the Chinese shopping experience, are disappearing from luxury malls as brands shift their strategic investments. According to Chinese retail and franchise industry representative — the China Chain Store and Franchise Association, from 2022 to 2024, cosmetics stores in 447 key shopping centers across 13 cities had a closure-to-opening ratio of 0.85, indicating contraction. Meanwhile, NielsenIQ data shows that the number of department store beauty counters in 51 cities fell from over 15,000 in 2019 to just 9,500 in 2023, marking a loss of nearly 6,000 counters in five years. With brands simultaneously shuttering counters, the role of offline retail in China appears to be undergoing a fundamental shift. What are the factors driving this transformation, and what does the future hold for beauty’s offline presence? Shifting away from department stores beauty counters The exodus from department store counters is driven by several converging factors: rising operational costs, the shift to online channels, and the evolving preferences of Chinese consumers. According to Winshang data, Clinique and Origins not only refrained from opening new stores last year but closed two and nine locations, respectively. Meanwhile, P&G’s premium skincare brand SK-II reportedly shut down about one-third of its counters in Shanghai. “Historically, the beauty counter was the cornerstone of many consumers’ purchasing journeys,” says Jack Porteous, Commercial Director at Tong, a China-focused cross-cultural agency. “Today, however, specialized product information is readily available on platforms like Xiaohongshu (RedNote) and Douyin, where consumers can also check the credentials of those offering advice.” Indeed, livestreaming and social commerce have reshaped beauty shopping habits in China. Jacob Cooke, co-founder and CEO of WPIC Marketing and Technologies, an e-commerce and technology consultancy, says that “platforms like Douyin have become pivotal in this transition. Beauty sales on Douyin reached $34.8 billion in 2024, up 11% year-on-year.” Consumers are increasingly engaging with brands through short videos, influencer recommendations, and AI-driven personalization rather than in-store beauty advisors. Tom Griffiths, managing director at the creative advertising and digital experience company, Stink Studios in Shanghai, points to China’s overbuilt shopping infrastructure as a factor in department stores’ decline. “In the years leading up to this huge shift in consumer behavior, China built a vast number of shopping malls and department stores,” he says. “This has left the challenge of having too many spaces for shopping.” At the same time, department stores have raised their expectations regarding sales per square meter, making beauty counters less viable. Retail landlords are prioritizing tenants that drive foot traffic and yield higher returns, such as blindbox-maker Pop Mart. Because of declining transaction volumes, beauty counters no longer meet those criteria. The rise of beauty flagship stores and multi-brand retailers As beauty counters lose relevance, alternative offline retail formats are stepping in. Multi-brand retailers such as Sephora, Harmay, and Wow Colour offer a more dynamic and less complex model compared to maintaining individual counters across multiple department stores. “These retailers provide many of the traditional benefits of beauty counters but without the brand exclusivity. Consumers can select from a range of brand and product options,” says Porteous. Harmay, for instance, curates an experiential retail format that merges warehouse aesthetics with high-end beauty shopping, attracting younger, trend-driven consumers. Meanwhile, beauty flagships are growing in prominence. Brands like SK-II, Shiseido, and Estée Lauder are investing in flagship stores that function as immersive brand experiences rather than mere points of sale. “The flagship store is a statement of intent — a space brands fully control to shape aesthetics, mood, and experience,” says Porteous. These stores often integrate beauty services, such as personalized skin consultations and exclusive treatments, to offer a level of engagement that online platforms cannot replicate. The changing role of offline retail While the decline of beauty counters might suggest that offline retail is losing ground, the reality is more nuanced. “The role of in-person interaction is shifting from sales-first to brand-first,” adds Porteous. “Brands are aiming to unobtrusively weave sales activation into their brand activations” Cooke concurs, emphasizing that flagship stores enabke brands to own the consumer experience entirely. “With so many sales moving online, it makes more sense for brands to invest in flagship stores that serve as immersive environments for direct consumer engagement. Brands can own the experience and customer touchpoint in a flagship store, which a generic beauty counter cannot provide.” Unlike beauty counters, which operate within a department store’s constraints, a flagship store provides a 360-degree brand experience. It’s about creating lasting impressions, not just transactions. Offline retail is also evolving into a form of social engagement. Younger consumers, particularly from Generation Z, view shopping as an experience rather than a chore. As Griffiths points out, “Flagship stores allow for more concentration of resources and the ability for brands to create something of a spectacle. A counter is for selling products, a flagship store is for crafting an experience.” The future of beauty’s offline presence With department store beauty counters shrinking, the future of offline beauty retail will be shaped by experiential engagement, omnichannel integration, and brand storytelling. The next frontier lies in transforming retail spaces into entertainment-driven environments. “Simply having products on a counter is no longer enough,” says Porteous. “The future belongs to brands that create offline spaces worth visiting.” Whether through personalized beauty tech, immersive installations, or exclusive in-store experiences. Omnichannel synergy is also key. Digital-first brands are increasingly launching physical pop-ups or experience stores to complement their online presence. According to Qingyan Intelligence data, China’s cosmetics market saw a 0.4% year-on-year increase in online sales revenue in 2024, while offline sales declined by 6.1% year-on-year. While the majority of sales happen online, offline retail serves as a powerful brand reinforcement tool. The touchpoints must work in harmony. Offline retail: Evolving, not extinct The mass retreat from beauty counters does not signal the death of offline retail, but rather a transformation in its function. As Chinese consumers increasingly favor online shopping, brands are reallocating resources toward immersive, high-impact flagship stores and alternative retail formats that provide deeper engagement. “In a digital-first economy, brands are fighting for opportunities to bring their stories to life,” says Porteous. “Real-life encounters — whether at a store, a pop-up, or a counter — immerse customers in the brand’s culture and offer a brief moment of undivided attention. That’s nearly impossible to achieve in a world filled with livestreamers, promotions, and hyper-competitive online distractions.” Ultimately, the winners in China’s beauty market will be those that master this new hybrid model, leveraging online efficiency while crafting compelling, experience-driven offline touchpoints. Counters may be closing, but the future of beauty retail is far from over — it’s simply being redefined.

Why 6,000 beauty counters disappeared in China

China’s luxury interlude that never really was

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Why 6,000 beauty counters disappeared in China

China’s luxury interlude that never really was