Over the past three years, China’s cosmetics retail sector has seen negative growth twice. In 2024, total industry sales reached RMB 435.7 billion (approx. USD 60.2 billion / KRW 83.3 trillion), marking a 1.1% year-on-year decline, even as overall social retail sales recorded a positive growth of 3.5% (source: CBO). Amid this chilly market, Maogeping—a premium domestic brand founded in 2000—has continued to report a string of successes: in 2024, the company achieved revenue of RMB 3.885 billion (approx. USD 537 million / KRW 743 billion) and net profit of RMB 881 million (approx. USD 122 million / KRW 168 billion), with a gross margin holding at a high 84.4% (source: Sina Finance). Its four-year compound growth rate exceeded 35% (source: Hong Kong Stock Exchange news).
At a time when the industry is generally focused on destocking and cutting costs, how has Maogeping managed to rise against the headwind?
Strategy 1: Deep Cultivation of Department Store Channels to Capture Mid-to-High Income Consumers Willing to Pay for Experience
Maogeping still generates more than half of its revenue from physical counters: in 2024, offline channels contributed 52.2% of revenue, while online made up 47.8%. In contrast, domestic beauty brands like Proya and Shanghai Chicmax derive over 80% of their sales from online channels.
The company has deployed 378 self-operated counters and 31 distributor-run counters nationwide, located in high-end malls such as Wuhan SKP, Chengdu SKP, and Hangzhou Tower—not clustered in “prime first-floor spots” of tier-one cities.
Department store channels inherently serve as a filter: their core customers have strong spending power and low price sensitivity. Moreover, physical counters provide a complete “try-on – touch-up – purchase” closed loop, which reduces reliance on online traffic acquisition and allows the company to maintain gross margins above 80%.
Strategy 2: Core Product Focus on Functional Base Makeup Stabilizes High-Frequency, Rigid Demand
In 2024, Maogeping’s makeup segment accounted for 59.3% of total revenue, with the brand’s iconic base makeup line—such as the “Luminous Flawless Foundation”—remaining its top seller. On Tmall, monthly sales of these items exceeded 10,000 units.
Base makeup belongs to a functional category that is “used daily and delivers immediately visible results.” When the industry is in decline, consumers are more likely to retain spending on such essential items. As a result, facial base makeup has seen the smallest decline in the past two years, with some subcategories still showing positive growth.
The company launched smaller packaging (priced around RMB 300 / approx. USD 41 / KRW 57,000) online to lower the purchase threshold, while promoting larger packaging (average ticket above RMB 500 / approx. USD 69 / KRW 95,000) in stores to reinforce its premium positioning. At the same time, leveraging the concept that “good base makeup requires good skin,” Maogeping expanded into skincare, which now contributes 36.8% of revenue—forming a dual-engine strategy of “base makeup drives skincare.”
Strategy 3: Counter Services and Tiered Membership Model Together Drive Repurchase Rates Upward
Beyond merely selling products, Maogeping has turned its counters into “mini beauty classrooms.” Across its 378 self-operated counters nationwide, the company has deployed about 2,800 beauty consultants trained at its makeup academy—averaging 7 staff per counter. Services include half-face makeup trials, brow shaping customization, and makeup tutorials.
The company categorizes members into four tiers based on annual cumulative spending. The top-tier “Supreme Style Members” have a near 100% repurchase rate, while overall member repurchase rate rose from 26.8% in 2023 to 30.9%, significantly higher than the industry average of around 20%.
Meanwhile, the brand’s makeup academy contributed RMB 152 million (approx. USD 21 million / KRW 29 billion) in training revenue—not only boosting profits but also continuously supplying counters with “students who are both staff and seed users,” further strengthening customer loyalty.
Conclusion:
By pursuing “experience premium” instead of “traffic premium,” Maogeping has built a moat through offline counters, functional hero products, and a service-based closed loop.
To sustain growth, the brand still needs to resolve its heavy reliance on the founder’s personal IP, and must turn its skincare and new sub-brands into viable second growth curves.
But for now, amid a sluggish economic cycle, Maogeping has provided a viable case study of premiumization for domestic beauty brands: Bundling products and services into a single receipt, and getting consumers to pay for visible transformation—not hollow discounts.
[Disclaimer]: The above content reflects analysis of publicly available information, expert insights, and BCC research. It does not constitute investment advice. BCC is not responsible for any losses resulting from reliance on the views expressed herein. Investors should exercise caution.