The Chinese cosmetic market in 2025 was characterized by a profound structural transformation, moving from mass-market expansion to high-quality, brand-driven competition. The market is defined by the ascendance of domestic brands, increasingly rational and sophisticated consumer habits, and a dynamic but challenging competitive landscape.
According to the figures from the National Bureau of Statistics of China, the cosmetics market in China was projected to reach a sales value of approximately €62.04 billion in 2025, maintaining a growth rate of around 5.10%.
Market Development
The market’s growth is no longer just about expansion but about significant internal evolution.
Chinese Brands Now Lead the Market: Chinese brands have firmly established market dominance since first breaking the 50% threshold in 2022. In 2025, the market share reached 57.37%, marking a continuous increase. However, the market still exhibits the characteristic of being “large but not strong.” Although Chinese companies account for 33 of the top 50 firms in the industry–by far the largest share–the average annual revenue per Chinese company (approximately €648 million) remains significantly lower than that of their French and U.S. counterparts (approximately €2.8 billion). Cosmetic products from Europe and the United States are generally positioned in the medium- to high-end market, whereas Chinese cosmetic products are predominantly positioned in the medium- to low-end market.
Increasing Market Concentration and Industry Consolidation: The market is increasingly dominated by leading companies, resulting in intensified competition. More than 60% of the top 500 brands achieved growth, whereas only about 26% of brands outside the top 500 recorded positive growth. Resources are becoming increasingly concentrated among leading companies. In 2025, 26,941 brands exited the market, accounting for more than 41% of all active brands. At the same time, 17,076 new brands entered the market. This indicates that the industry is undergoing an intensive process of brand consolidation and market restructuring.
Online Dominance with Offline Stabilization: The era of relying solely on e-commerce for growth has ended. In 2025, online sales still dominated with a 65% share, but the market is now defined by an “omnichannel” model that seeks balance and synergy between online and offline experiences.
Innovation as the New Battleground: Competition has pivoted from marketing spend to technological prowess. In the first half of 2025, 80 new cosmetic ingredients were registered, with a staggering 82% coming from domestic companies. This focus on R&D, particularly in areas like anti-aging and native Chinese botanical ingredients, is a key driver of the market’s evolution.
Purchasing Habits – The Rise of the Rational and Informed Consumer
Consumer behavior has shifted dramatically away from simply following big brands and marketing hype.
The “Ingredient Hunter” is Mainstream: Consumers are now highly educated about product formulations. A 2025 report shows that for more half consumers, a product’s ingredients are the primary factor in their purchase decision. This “ingredient hunter” trend signifies a deep focus on safety, science, and tangible efficacy.
Demand for Scientific Proof: It’s no longer enough to list ingredients. Shoppers want to see the technology behind them. More than 62% of consumers actively seek out a product’s technical principles and efficacy test data before buying, a significant increase from previous years. Brands that provide transparent, scientifically-backed results enjoy much higher customer loyalty.
“Smart Spending” and the Polarization of Price Points: The “spend smart” mentality prevails. The market is polarizing, with about 59% of sales coming from value-driven products under 38€. However, the premium segment (over €125) remains strong, while the middle-market is shrinking. Consumers are willing to spend on high-end products that deliver results but are equally happy to find a bargain on a product that offers great value.
Personalization, Experience, and Scent
Beyond ingredients, new dimensions are influencing consumer choices.
The Sensory Experience: Perfume and scented products have moved from being an occasional luxury to an emotional daily essential. Consumers are increasingly looking for personalized scents that match their mood and occasion, with a strong preference for natural ingredients and comfortable, non-irritating fragrances.
A Holistic Pursuit of Efficacy and Experience: The modern consumer seeks a product that combines proven results with a great sensory experience.
This “efficacy plus experience” model is driving brands to innovate not just in formulas but also in texture, packaging, and how a product makes the user feel.
Stricter Regulations
A more stringent regulatory environment is a major force behind the market’s shift toward quality and accountability. A new 24-measure reform framework is being implemented, focusing on:
Full Lifecycle Risk Management: Regulations now cover a product from its ingredients and manufacturing to its labeling, online and offline sales channels, efficacy claims, post-marketing surveillance etc.
Cracking Down on Non-Compliance: In 2025, over 2,200 administrative penalties were issued for issues like selling expired products, false advertising, and illegal ingredient use. This regulatory pressure is a primary reason for the elimination of so many brands.
Animal testing: China is undergoing a pragmatic shift here: instead of an immediate ban, alternative methods (such as in vitro tests, organ-on-a-chip, and zebrafish models) are being scientifically tested and gradually integrated into regulatory practice. An important step was the draft legislation from March 2026, which provides for exemptions from the requirement to submit animal testing data under certain conditions. Accordingly, certain specialty cosmetic products (e.g., plant-based hair dyes without oxidizing agents) could be exempt from this requirement if the manufacturer has a recognized quality management system in place and a comprehensive risk-based safety assessment demonstrates the product’s safety.
Enforcing Scientific Claims: Regulations now mandate that claims like “anti-wrinkle” or “whitening” must be backed by rigorous testing. This requirement is empowering consumers with trustworthy data and reducing the impact of “pseudo-science” marketing.
Future Outlook – What Lies Ahead
The trends from 2025 set the stage for a future where success is built on a few key pillars.
A New Era for Brands: The market is moving from a “land grab” to an era of “intensive cultivation.” Future winners will be those who commit to long-term brand building, consistent R&D investment, and a deep understanding of the consumer.
A Powerful Tool: AI is emerging as a key tool for growth, helping companies with everything from predicting trends and personalizing recommendations to streamlining supply chains.
Going Global: With intense domestic competition, Chinese cosmetic companies are looking outward. Exports are growing, particularly to emerging markets like Southeast Asia, as domestic brands seek new avenues for expansion.
In summary, the Chinese cosmetic market is getting more mature, competitive, and consumer-centric than ever before. Success is no longer about marketing spend but about scientific credibility, brand strength, and a genuine ability to meet the nuanced needs of a highly-informed consumer base.
Rongmei Hui-Drobnik
Managing Director, DeHui GmbH,
Rinteln, Germany,
www.dehui-consulting.com