As Mannings and Sa Sa exit China, Sephora bets on Douyin brands

As Hong Kong–based drugstore chain Mannings prepares to shutter its entire mainland China network, following the exit of long-established player Sa Sa, China’s beauty retail landscape is undergoing a structural reset. Offline multibrand stores — once the default gateway for imported cosmetics — are losing their primacy in the market. At the center of the upheaval sits Sephora China, which is quietly reengineering its assortment, store logic, and brand mix in an effort to remain relevant in a social-commerce-first era. Over the past few months, a steady stream of social-native domestic brands — including Censto, Joocyee, and Red Chamber — has begun appearing on Sephora China’s shelves. Many were born and scaled on Douyin and Xiaohongshu, with hero SKUs forged in livestreams and short-video feeds rather than department-store counters. Florasis, one of China’s most recognizable premium C-beauty brands, is also planning a Sephora China launch in March. This shift goes beyond cosmetic tastes. It reflects a deeper reckoning over what a physical multibrand beauty store is meant to do in a market where discovery, education, and conversion increasingly happen online. The collapse of the old multibrand playbook Mannings’ exit is emblematic. After entering mainland China in 2004 and expanding to more than 200 stores at its peak, the retailer will close all offline stores and online channels by early 2026. Fellow Hong Kong beauty chain Sa Sa completed its exit from mainland retail in June 2025, while Watsons, after four consecutive years of revenue decline in China, is now restructuring its store network to focus on smaller cities. According to Moqian Sun, founder of marketing and consulting strategy firm The Harvest, which focuses on travel retail and in-store experiences, the retrenchment points to a structural failure rather than a cyclical downturn. “The traditional multibrand beauty retail model in China was built around offline assortment control and store-based distribution,” Sun says. “That logic no longer holds. Information asymmetry has disappeared, and retailers no longer ‘own’ discovery.” Cross-border e-commerce, brand-owned flagship stores, and content platforms have eroded multibrand retailers’ historic advantage of exclusive access to imported brands. At the same time, many chains offer highly homogenized assortments, leaving little room for differentiation or surprise. Amber Wu, a seasoned consultant in China’s beauty industry, notes that the problem extends beyond beauty alone. “Offline retail overall is under pressure as consumers shift to e-commerce and social commerce,” she says. “In beauty, the old model of broad SKU sets and slower product cycles simply doesn’t match how people discover products today.” Wu points out that Mannings remained overly reliant on imported SKUs and traditional shelf-based merchandising, while younger consumers were already discovering niche domestic brands through livestreams and social “grass-planting,” a form of peer-driven product recommendation. “There was a clear lag in localization and digital interaction,” she says. Sephora’s reset: From discoverer to validator Against this backdrop, Sephora China’s embrace of Douyin- and Xiaohongshu-native brands may look like a tactical response to pressure. The retailer faced revenue and profitability challenges in 2025 as enthusiasm for high-priced international brands cooled and store traffic slowed. But Sun argues the move reflects a deeper reset of Sephora’s role in China. “In the short term, it’s traffic stabilization,” she says. “These brands bring their own Gen Z audiences, which helps slow churn and refresh in-store energy. But structurally, Sephora is shifting from a brand discoverer to a brand amplifier and validator.” Rather than introducing untested labels, Sephora increasingly selects brands already validated online, then redistributes them through its trusted offline channels. “It’s a hybrid model — premium service layered on top of mass social traffic,” Sun adds. Wu agrees that the strategy goes beyond short-term fixes. “This reflects a move away from purely global prestige curation toward a hybrid model that acknowledges local trends: faster cycles, social momentum, and more fragmented consumer niches,” she says. “It’s not abandoning premium; it’s redefining how premium is expressed in China.” This recalibration is increasingly visible on the shop floor. Once resembling international brand showrooms, many Sephora stores now feature brighter color blocks, lower price points, and hero-product storytelling designed to tap social virality — particularly in color cosmetics. Reduced competition won’t save offline retail Even with competitors pulling back, Sephora is not guaranteed to benefit. “The offline beauty pie itself is shrinking,” Sun says. “Online channels — including livestreaming and private traffic — are where growth and repurchase happen. Reduced competition alone doesn’t create demand.” Wu echoes that assessment. “Sephora may pick up incremental share as rivals withdraw, but structurally, digital and social channels remain the growth engines. Offline retail is no longer where scale is built.” Consumer behavior has shifted to “online discovery, offline trial, online purchase,” reducing the role of physical stores to experience, gifting, and emotional engagement, with fewer visits and smaller transactions. Sephora’s advantage lies in its brand equity and immersive experiences. But as Sun notes, “Unless in-store visits deliver something genuinely irreplaceable, traffic erosion will continue.” The beauty advisor dilemma for social-native brands Integrating fast-cycling, social-native labels into a premium, beauty advisor (BA)–led retail environment introduces new tensions. “The biggest risk is positioning dilution,” Sun says. “Affordable viral products sitting next to tier-one brands like Dior or Guerlain can blur Sephora’s premium authority.” Wu highlights an operational mismatch. “Social-native brands rely on content-driven seeding and rapid experimentation,” she explains. “That logic doesn’t always translate to BA-led selling, which is built around professional consultation and set-based routines.” Speed compounds the challenge. C-beauty brands iterate quickly, while Sephora’s assortment selection, training, and merchandising cycles remain comparatively slow. If the mix feels crowded rather than curated, Sephora risks losing its role as a trusted editor of premium beauty. What Sephora means for C-beauty For domestic brands, entry into Sephora remains highly symbolic. “Being stocked at Sephora is still a credibility upgrade,” Wu says. “For many consumers, it signals that a brand meets a certain quality and trust threshold.” Offline access also allows brands to reach higher-spending consumers and offset rising online customer acquisition costs. Operationally, meeting Sephora’s standards forces improvements in quality control, logistics, and after-sales systems. Still, Sun cautions that the long-term economics are fragile. “Entry fees, discount structures, and inventory risk require careful planning,” she says. “Many C-beauty brands are still driven by one hero SKU. Without portfolio depth, their long-term contribution on Sephora’s shelves will be limited.” Sephora’s path forward Embracing Douyin-native C-beauty gives Sephora a chance to localize faster than its retreating rivals. But the balance is delicate. If hype overwhelms authority, or affordability crowds out expertise, Sephora risks becoming just another traffic container in an already saturated market. The exit of Mannings — alongside the prolonged retreat of Watsons and Sa Sa — shows how unforgiving China’s retail reset has become. For Sephora, betting on social-native brands is not a guaranteed solution.

Why Sephora is letting Douyin decide what sits on shelves

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Why Sephora is letting Douyin decide what sits on shelves