La Prairie recorded its third consecutive year of declining sales in 2025. In the same reporting period, Eucerin – a dermatological brand that does not advertise with celebrities, does not sell in department stores, and does not have a heritage story – grew by double digits for the fifth year running. These two brands sit within the same parent company. They compete in adjacent price tiers. The consumer choosing between them is often the same person. The divergence in their trajectories is not a product story. It is a market structure story – and it is one of the clearest signals available about where premium beauty is heading.
The Exit List Is Not a Crisis. It Is a Correction
In 2025, more than 20 international beauty brands closed stores, pulled counters, or exited the Chinese market entirely. The list includes Laneige, SEKKISEI, Aesop, TATCHA, BRANCHIC, AP Oryza, SIENU, and ORBIS – brands from Korea, Japan, the United States, and France, spanning mass-premium to ultra-luxury price points.
The instinct to read this as a market collapse misreads the data. China’s cosmetics retail sales fell 1.1% in 2024 before recovering 5.1% in 2025, according to China’s National Bureau of Statistics. Goldman Sachs projects the premium beauty segment to grow from $32 billion in 2024 to $34 billion by 2027 – a compound annual growth rate of approximately 2%. The market is not shrinking. It is consolidating.
What is being corrected is not demand. It is the assumption, held by most international brands entering China over the past decade, that premium positioning was sufficient to justify premium pricing. That assumption has not aged well.
How Prestige Built Its China Position – and Why It Is Weakening
The decade of premium beauty outperformance in China was built on three structural conditions. First, a rapidly expanding middle class entering the beauty category for the first time, with aspirational spending patterns that rewarded brand recognition over product performance. Second, the explosive growth of e-commerce and social commerce platforms that gave international brands efficient access to first-time buyers at scale. Third, a widespread consumer belief that foreign origin and high price were reliable proxies for quality.
All three conditions have weakened simultaneously.
The middle class is no longer new to the category. Consumers who began buying premium skincare five years ago have accumulated enough product experience to form opinions about efficacy – and those opinions are increasingly skeptical of brands that rely on heritage and packaging over results. E-commerce penetration has plateaued as a growth driver; the marginal new consumer is harder and pricier to acquire. And the belief that foreign equals better has been structurally undermined by the rise of domestic Chinese brands that now compete credibly at premium price points.
The consumer data makes the shift explicit. According to Qingyan Intelligence’s 2025 China High-End Beauty Market report, 79.1% of premium beauty consumers cite efficacy and visible results as their primary purchase driver. Ingredients and technology rank second at 61.7%. Brand reputation – the foundation on which most international prestige brands built their China positioning – ranks third at 53.1%.
This is a fundamental inversion of the hierarchy that governed premium beauty purchasing in China for the previous decade.
La Prairie vs. Eucerin: The Same Parent Company, Two Different Markets
The Beiersdorf results illustrate the structural divergence with unusual clarity because both brands operate under the same ownership, in the same macro environment, selling to consumers in overlapping demographics.
La Prairie – positioned as ultra-luxury Swiss skincare, with prices that place it among the most expensive brands in any market – recorded organic sales decline of 4.5% in 2025, its third consecutive year of contraction. The brand has faced particular pressure in China and travel retail, its two most important channels, both of which have weakened as Chinese consumer spending on symbolic luxury has moderated.
Eucerin – a dermatological skincare brand owned by Beiersdorf, distributed primarily through pharmacies, positioned on clinical efficacy rather than luxury narrative – grew 11.7% organically in 2025, its fifth consecutive year of double-digit growth. Eucerin does not have a Swiss heritage story. It does not use celebrity ambassadors. Its packaging is functional. Its marketing language is clinical.
The divergence is not explained by price point alone. SkinCeuticals, which sits at the premium end of the dermatological beauty segment, crossed the billion-euro threshold in 2025 with “very dynamic growth everywhere” according to L’Oréal’s results. Consumers are willing to pay premium prices. They are no longer willing to pay them for heritage alone.
Beiersdorf’s own CEO acknowledged the dynamic in the 2025 results: the recovery in Nivea, their mass-market flagship, was driven by targeted innovation in high-potential categories rather than broad positioning. The strategic logic is the same across price tiers – efficacy must be demonstrable, not assumed.
The Domestic Brand Challenge Is Structural, Not Temporary
The rise of domestic Chinese beauty brands at premium price points is not a nationalist consumer trend that will reverse when economic conditions change. It is a structural capability shift that has been building for several years and is now sufficiently advanced to constitute a durable competitive threat.
Preference for domestic Chinese brands among premium beauty consumers climbed from 28.4% in 2021 to 46.5% in 2025, surpassing European and American brands for the first time, according to Qingyan Intelligence. The stated reason is not price. It is fit: consumers increasingly believe that brands formulated around Chinese dermatological data – thinner skin barrier function, distinct pigmentation pathways, different climate-specific concerns – deliver better results for their skin than globally standardized formulations adapted for local markets.
L’Oréal, Estée Lauder, and Shiseido have all responded by expanding R&D operations in Shanghai. Shiseido launched its first brand created entirely by a Chinese team – RQ PYOLOGY – in 2025. L’Oréal established a dermatological science laboratory in partnership with Huashan Hospital. The strategic response of the market leaders is itself a concession: local formulation is no longer optional for brands that intend to compete seriously in the premium segment.
The brands that have not made this investment – or cannot make it at sufficient scale – are the ones whose China exits are accelerating.
What Survives the Correction
The exits and contractions should not be read as evidence that international brands cannot succeed in China. They are evidence that a specific model of international brand success – one built on heritage, aspiration, and distribution without deep product localization – is no longer sufficient.
The brands that are growing in China’s premium segment share a set of characteristics. They have clinical or ingredient credibility that can be substantiated rather than merely asserted. They have invested in local formulation or local research partnerships. Furthermore, they are present in the channels – dermatologist offices, pharmacy chains, science-forward e-commerce – where efficacy-focused consumers are making decisions. And they are priced in relation to perceived performance, not in relation to brand tier.
L’Oréal’s Dermatological Beauty division grew 5.5% like-for-like globally in 2025, with double-digit growth in North Asia specifically. Aesop, paradoxically, closed its China flagship while its parent company, L’Oréal, reported strong fragrance performance from the brand in other markets – suggesting the issue was China-specific positioning rather than global brand health. The market is not rejecting premium. It is rejecting premium that cannot justify itself.
The Broader Implication for Asian Beauty
The China correction has implications that extend beyond China. The consumer behavior being documented in the world’s most competitive beauty market – the shift from symbolic to functional luxury, the demand for clinical substantiation, and the preference for brands that demonstrate local relevance – is not unique to Chinese consumers. It is the leading indicator of where premium beauty consumption moves as markets mature.
Southeast Asia is earlier in that maturation cycle. The consumers who will define premium beauty purchasing in Vietnam, Thailand, and Indonesia over the next decade are currently in the phase that Chinese consumers occupied five years ago: aspirational, category-new, and largely deferential to international brand authority.
That phase does not last indefinitely. The brands building positions in Southeast Asian markets now – whether international players leveraging existing infrastructure or local brands establishing ingredient credibility – are competing for consumers who will eventually apply the same efficacy-first logic that has reshaped China’s market.
The question is not whether that shift will happen. It is whether the brands currently investing in Southeast Asia are building for the market as it is or for the market as it will become.
Sources: Cosmetics Observer (化妆品观察), Global Top 10 Beauty Company Revenue 2025; Beiersdorf AG 2025 Annual Results; Qingyan Intelligence (青眼情报), China High-End Beauty Market & Consumer Trends Report 2025; China National Bureau of Statistics, cosmetics retail data 2024–2025; Goldman Sachs China premium beauty market projections via Cosmetics Observer / Jing Daily; L’Oréal 2025 Annual Results (official press release, February 2026); Jiemian (界面新闻), China premium beauty market recovery analysis, February 2026.
