Domestic beauty products are “family-oriented”, what consumers don’t know

Author|Yaqin

Statement | The title picture comes from the Internet. Original article from Jingzhe Research Institute. If you need to reprint, please leave a message to apply for permission.

In February this year, the China Cosmetics Association released a series of data on China’s cosmetics industry in 2025, which showed that the industry’s omni-channel transaction volume exceeded 1.1 trillion yuan, and domestic brands maintained their dominant position in the market with a share of 57.37%.

Faced with an endless stream of domestic brands, many consumers who have difficulty choosing often have to read reviews, read reviews, and compare prices before finally choosing the product they are most satisfied with and placing an order. But the intention behind this careful selection may not be as expected.

Not long ago, some netizens posted on social media that they originally wanted to compare the nose patch products of RNW Ruwei and AUOU Aiyu, but unexpectedly found that the two products were manufactured by the same company, and the two brands also belonged to the same company. This post also revealed an unknown aspect of domestic beauty brands: consumers who think they are choosing between different brands may actually be paying for products from the same company.

Domestic beauty products begin “group operations”

A beauty group operating multiple brands is nothing new in the beauty industry. Estee Lauder, La Mer, Miko, and Tom Ford all belong to the Estee Lauder Group; behind Lancôme, Helena, Armani Beauty, and YSL Beauty are all L’Oreal Group. Consumers may not know everything, but they have heard about it.

The same logic applies to domestic beauty products, and consumers’ perception will be weaker. In fact, the multi-brand matrix of domestic beauty groups is quite common. For example, Proya owns Proya, Off & Relax, and Original Color Pota; Nature Hall owns Nature Hall, Misu, and Spring and Summer; Marumi owns Love Fire and Spring; Juyi owns Orange Blossom and Zhense; Shangmei owns Hanshu and Yiyeye; Bethanie owns Winona, Aikeman, etc.…

Whether it is an international giant or a domestic brand, the core logic of multi-brand layout is basically the same: use different brands to cover different categories, price ranges and groups, and support greater revenue with wider market coverage. This multi-brand matrix is ​​usually formed in two ways: acquiring mature brands or incubating independently. But either way, the underlying logic is mostly differentiation.

This differentiation is usually reflected on two levels. The first is to fill the gap in the category. For example, Juyi Group originally focused on two cosmetics brands, Juduo and Zhenzi. Later, it acquired the Chinese business of France’s Fulu Deya and entered scalp care. It also acquired Bai Zhicui and entered scientific skin care. The same is true for Yixian E-commerce. It first expanded from the cosmetics brand Perfect Diary to skin care, and then successively acquired Kelanli, DR.WU Dalfu (China business), and EVE LOM.

The second is segmentation and positioning within the same category. For example, Proya’s original color Bota, as well as the acquired Caitang and Huazhidao, are all cosmetics, but their positioning is different: Caitang focuses on Chinese aesthetics, Original Color Bota is trendy, and Huazhidao focuses on the two-dimensional girl style. Another example is Winona, a skin care brand owned by Bettany, which focuses on sensitive skin, Aikeman is positioned as a high-end professional anti-aging brand, and Beifuting focuses on professional acne removal.

Therefore, in the terminal market, it is not easy for consumers to realize that they belong to the same company due to differences in brand positioning, price ranges, and crowds. But not all “group” brands follow this differentiation.

Take Pellet Group as an example. Although its brand matrix covers cosmetics, skin care, personal care and other categories, there are many crossovers between sub-brand product lines, especially in categories such as foundation, concealer, facial cleanser, facial mask, and nasal strips. The brand positioning is also mainly mass-oriented, and the price is basically within 100 yuan.

It is worth noting that most groups have gone through a relatively long cycle in building their brand matrix. For example, Shangmei Group launched Hanshu in 2003, but did not launch Yizhiye until 2014; Marubi launched Chunji in 2007, and did not add the makeup brand Love Fire until 2017; Bethany launched Winona in 2010, and Aikeman in 2022.

In contrast, Pellet Group’s pace of launching new products is significantly faster. According to Qichacha, there are more than 20 cosmetics companies under the Pellet Group, and more than half of them can find corresponding brand products on the shopping platform (some are sold in small beauty stores, not official stores). The Jingzhe Research Institute reviewed public reports and found that, in addition to UNNY CLUB and RNW, which were launched earlier, Pellet Group launched a number of new brands to the market in 2020 and 2021: UODO, DPU, TOCU, PIARA, JEJO, BESNEA, ONLY MAY, etc. were all launched during this period.

Overall, Pellet Group’s multi-brand layout is closer to the strategy of densely laying out brands and exchanging quantity for channel coverage. This means that although these brands operate independently in name, they may actually compete for the same group of consumers, creating a situation where “brotherly brands” compete with each other.

From “multi-brand” to “brand-making”?

At the product level, the competitive situation among “brother brands” is more intuitive. Take Pellet Group’s nose patch products as an example. Its RNW, EIIO, DPU, and AUOU brands all have similar products, and the specifications and prices are highly similar: the specifications are unified into 5 sets, and the price on Tmall is concentrated at 40 yuan to 50 yuan, while on Pinduoduo and other platforms, it is as low as 25 yuan to 35 yuan.

With such close pricing, it is naturally difficult for consumers to perceive obvious differences when purchasing, so it is not surprising to want to buy two products for comparison. And behind this “similarity”, perhaps it is because they come from the same foundry system.

Jingzhe Research Institute reviewed the company’s information and found that four nasal patch manufacturers, RNW Ruwei, EIIO Yiwo, DPU Jianchu, and AUOU Aiyu, all pointed to Shanghai Zhumei Biotechnology Co., Ltd. or Guangzhou Yachun Cosmetics Manufacturing Co., Ltd., of which Zhumei Biotechnology is a wholly-owned subsidiary of Guangzhou Yachun. Moreover, Guangzhou Yachun has rich OEM experience. In addition to serving Pellet’s brands, it has also OEMed for Pechoin, Tong Ren Tang, Xiu Xiu Pharmaceutical and other companies.

In addition to the “same origin” of the foundry, Jingzhe Research Institute also found when comparing four nasal patch products that the core ingredients mentioned in their promotional content are also highly overlapping. It is generally based on extracts of shiitake mushroom, white willow bark, goat milk root, burdock root, North American witch hazel, lavender and other extracts, and some are added with ingredients such as purslane, chrysanthemum and centella asiatica.

*Source: Screenshots from Tmall and Pinduoduo official flagship stores

In addition to products, the relationship between brands and manufacturers is also unusual. For example, the manufacturer of a concealer liquid from UNNY, a brand owned by Pellet, is listed as Pellet Cosmetics (Shanghai) Co., Ltd. According to Qichacha, one of the company’s shareholders is Cosmax (China) Cosmetics Co., Ltd., which holds 80% of the shares, and the other shareholder is a wholly-owned subsidiary of Pellet Group.

In other words, Cosmax, which has the status of a foundry, has jointly opened a new foundry with Pellet and has control of the foundry. From this point of view, the focus of Pellet’s role seems not to be products, but brand management. Therefore, the practice of operating multiple sub-brands of the same type of products may essentially be a strategy to confuse the market. Its purpose is to use a “multi-pronged approach” to compete for the market share of a single category.

Judging from the data of the Tmall flagship store, the sales performance of these nasal strips are obviously divided, with the sales volume on the day ranging from 10,000+ to 500,000+. This means that even if a certain brand’s sales are poor or its reputation declines in the future, the group will still have other brands that can attract consumers.

*Source: Screenshot of Tmall flagship store on September 17

However, negative impacts also exist. If multiple brands squeeze into the same market segment, it means that some brands are destined to become “cannon fodder”, which is not conducive to the accumulation of long-term brand equity of a single brand. From the overall development of domestic beauty brands, it is difficult to say that it is beneficial.

Who has eaten up the dividends of domestic beauty products?

In the past few years, the rise of domestic beauty products has been obvious. Although there are reasons behind the expansion of the supply of domestic brands, what really supports the increase in the share of domestic products is the increase in consumers’ trust in domestic products.

This trust is especially evident in the mass market. Students with limited budgets and those who are new to the workplace are often more inclined to choose domestic beauty brands, and are even willing to try niche brands that they have never heard of. This trust is also being exploited.

Nowadays, the marketing method of some beauty brands is not hard advertising, but KOC planting that seems to be more neutral. Review copywriting often compares products with international brands. Among them, international brands always have good reviews, and then highlights a certain or a few domestic products that are very effective, while putting other domestic products at a disadvantage in the comparison. Faced with this seemingly “objective” evaluation, it is difficult for consumers to distinguish whether it is a real sharing or a content prepared by the brand.

There are also some brands that use videos to make a fuss. For example, some makeup videos claim to be “real” displays, no filters, and pure makeup, but they actually use partial beauty to make the makeup effect better than the real effect.

*Fake grass planting methods shared by netizens (Source: Screenshot of Xiaohongshu)

This type of strategy is actually very easy to open up the market. The reason is that the price of the product itself is not high, and the cost of trial and error for consumers is relatively low. Even if it is not easy to use or suitable, consumers will not feel too distressed. But the problem is that relying on false propaganda to complete conversions has gone beyond the scope of normal marketing. This is tantamount to “smashing the pot” and damages the overall reputation of domestic beauty products.

There have been many cases of punishment by market regulatory authorities for false propaganda. For example, in January 2025, JEJO, a subsidiary of Pellet Group, was deemed to have published false advertising by the Suzhou Wujiang District Market Supervision and Administration Bureau and was subject to administrative penalties because the registered efficacy of its products such as loose powder, eye and lip makeup remover, and isolation milk were inconsistent with the promotional copy.

It is worth mentioning that the Ruwei brand under the Pellet Group has been complained about many times on the Black Cat Complaint Platform for its nasal strips, hair removal mousse and other products. The content is mostly about allergies, acne, redness and swelling, etc. Its product introduction page also has a label suitable for sensitive skin.

From the perspective of the industrial chain, problems not only occur on the brand side, but also on the manufacturing companies behind them. For example, in 2023, the Shanghai Food and Drug Administration reported that the banned raw material 1,2-dichloroethane was detected in nail polish produced by Jinhua Keweisi Daily Chemical Co., Ltd., involving brands such as Youyi and Zhiyouquan. When Jingzhe Research Institute inquired about the company on the cosmetics supervision APP, it found that almost all of its product announcement columns showed that it had been cancelled. However, the nail polish products of the two brands of Komo and Miniso KH can still be found in the product registration of its wholly-owned subsidiary Jinhua Keweisi Cosmetics Co., Ltd. – although the specific product names have changed. It can be seen that after a production company is found to have problems, it may still continue to produce similar products for the same brand through affiliated companies.

In the past, domestic beauty products relied on cost-effectiveness and channel dividends to achieve scale growth, and all links in the industry chain, including brand companies and manufacturing companies, shared this growth. The next stage of growth of domestic beauty products will rely on consumers’ deeper trust.

Data from the China Fragrances, Flavors and Cosmetics Industry Association show that the growth rate of China’s cosmetics market in 2025 will only increase from 2.80% in 2024 to 2.83%, and the growth rate will be basically the same. This means that the market has entered a stage of low-speed growth and the incremental space has narrowed. It has become more critical to retain consumers and promote repurchase.