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OK, Zoomers: Chinese youth help cosmetics industry boom

Written by Nikkei Asia Published on     2 mins read

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Generation raised on social media moves past stigma of domestic brands.

It’s fair to say CNFormulator, a Chinese cosmetic startup, is not your mother’s makeup company. Nearly every day its marketing department uploads quick videos on its social media channels, trying to go viral in the spirit of a TikTok video.

At a recent visit to the CNFormulator’s office in Hangzhou, the power of branding was on display.

“This cream is perfect for the coming dry skin season,” said an influencer, her performance effused with energy as she speaks in front of a camera.

The marketing has paid off. Sales have gone viral since CNFormulator’s founding in 2019. The turnover during this June’s cyber sales event alone exceeded RMB 20 million (USD 3.1 million). The company looks to make RMB 1 billion in annual revenue in 2026.

This would have been unimaginable not that long ago. Chinese-branded personal products carried a stigma, largely stemming from a deadly 2008 scandal in which baby formula was tainted with a poisonous substance.

But in the past year or two, Chinese brands have enjoyed a renaissance of sorts. Fueling this trend are members of Generation Z, or Zoomers, who are in their teens or early 20s.

“Our target market is dominated by the younger generation who are around 20 years old,” said Pang Ying, founder of CNFormulator.

The company’s selling point is that its product quality is on par with that of foreign rivals. To that end, CNFormulator has worked with product developers from Japan and Western nations.

Older consumers overwhelmingly favored foreign cosmetic brands over their Chinese counterparts. But since Zoomers have been surrounded by Chinese-made products like Huawei and Xiaomi smartphones since birth, they do not exhibit as strong resistance to domestic brands.

“The image of Chinese brands as presumably cheap and inferior has been dispelled, and the cosmetics market has expanded sustainably,” said an industry insider.

Free from bias, Zoomers often make purchasing decisions through social media. This confluence has driven the growth of the beauty market.

Up-and-coming brand Florasis has also been actively recruiting popular influencers. This effort paid off during the June 18 online shopping festival, also known as 618, when Florasis recorded over RMB 260 million in gross transaction volume on Alibaba Group Holding’s e-commerce platform.

It is not just startups that have benefited from the boom. Pechoin, founded in 1931, is winning over consumers by playing up the “Chinese-ness” of the brand. Not only do Pechoin’s products lean heavily on traditional medicine, the company also adopts artwork with classical Chinese motifs.

Although the cosmetics industry appears promising, challenges still lie ahead. Yatsen Holding, a startup that went public last year, turned in a net loss of RMB 380 million during the April-June quarter of this year.

This is typical of startups in emergent markets that over invest regardless of the impact on finances. For a company to survive in the newly resurgent cosmetic industry, maintaining a consumer-first perspective and safeguarding the brand will likely be crucial.

This article first appeared on Nikkei Asia. It’s republished here as part of 36Kr’s ongoing partnership with Nikkei.

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