Hong Kong beauty retailer SaSa International announced its decision to close all 18 offline stores in mainland China by June 30, 2025, marking its official exit from the offline retail market in China. Amid a sluggish consumer market, SaSa International’s exit reflects the widespread challenges faced by international beauty brands in the Chinese market. Many companies, including Japanese, Korean, and Western brands, are accelerating their contraction or complete withdrawal from the market.
SaSa International’s financial report for the 2024/25 fiscal year showed increased overall business pressure. Its core market in Hong Kong and Macau saw a 12.2% decrease in revenue to HK$2.992 billion, accounting for 75.9% of total revenue.
The performance in the mainland China market was particularly weak, with a 10.5% decline in revenue to HK$521 million, and offline channel sales plummeting by 38.2%. Although online channels accounted for 80.3% of sales with a 0.6% marginal growth, it was challenging to offset the significant losses from offline operations.
To address the challenges, SaSa International has been gradually shrinking its mainland China stores since the outbreak of the pandemic, reducing the number from a peak of 77 to the current 18. The complete closure of offline stores in mainland China is seen as a strategic adjustment for survival.
Meanwhile, the Southeast Asian market has become a highlight, with offline sales growing by 15.4% to HK$332 million, providing a new direction for the group’s business transformation.
SaSa International’s strategic adjustment is not an isolated incident but a reflection of the collective contraction of international beauty brands in the Chinese market.
Similarly, Japanese and Korean beauty brands are facing difficult situations in the Chinese market as well.
Korean Amorepacific Group’s brand Laneige closed all its offline stores in mainland China by the end of 2024, with its last Shanghai store shutting down on January 4, 2025. Brands like Sulwhasoo and Hera saw continuous sales decline in the Greater China region in the first three quarters of 2024, with a 44% drop in sales in the second quarter year-on-year.
It’s worth noting that the group has shifted its growth focus to the US market, with a 65% increase in sales in 2024, surpassing China for the first time.
Likewise, Korean LG Household & Health saw a 31.5% decrease in total profits in 2023 due to poor sales in the Chinese market and has redirected resources to North America and Japan.
Japanese brands have not been spared either. Kao Group’s cosmetics business suffered increased losses, while Kose Corporation completely withdrew from the Chinese market, experiencing a 34.7% decline in sales in 2023. Shiseido Group’s AHC and Boscia from Fancl Group have also either exited Tmall platform or ceased sales in mainland China.
The performance of Western beauty brands in the Chinese market is equally concerning. Brands like Estée Lauder, Benefit, Maybelline New York, and NYX have successively closed stores or exited the Chinese market in recent years.