(Yicai) March 24 -- Up-and-coming Chinese cosmetics firm Shanghai Chicmax Cosmetic is likely to upset the rankings of China’s listed makeup companies to place second in terms of revenue last year, overtaking established rivals like Yunnan Botanee Bio-Technology Group and Shanghai Jahwa United.

Chicmax, owner of the makeup brand KANS, logged an impressive performance last year. The Shanghai-based company posted a 69.2 percent jump in gross profit from the year before to CNY5.1 billion (USD702.2 million), while revenue surged 62 percent to CNY6.7 billion (USD934 million), according to the firm’s financial report released on March 20.

These results put Chicmax on track to become China's second-biggest beauty brand in the 2024 rankings.

Proya Cosmetics is currently leader of the pack with earnings of CNY7 billion (USD963.9 million) in the first three quarters of 2024, according to the latest publicly available data. Shanghai Jahwa United is clinging onto second place with revenue of CNY5.6 billion, but it reported a drop in both net profit and revenue that year. While Botanee's revenue surpassed CNY4 billion in the first nine months, meaning that the Kunming-based firm will be vying with Jahwa for second place in the annual rankings.

After several years of rapid growth in the beauty makeup market, the industry is now entering an era of fierce competition, hampering growth, analysts said. The key to success for these homegrown brands is to strengthen their position in niche segments to find new growth points and tackle challenges such as pricing, distribution channels, research and development, as well as international expansion.

China's cosmetics sales dipped 1.1 percent in 2024 from the year before to CNY435.7 billion (USD60 billion), according to data from the National Bureau of Statistics. However, domestic brands have bucked the trend with their sales climbing 7.4 percent, according to figures from market research company Qingyan Intelligence.

Top Chinese cosmetics firms are still heavily reliant on a single flagship brand for most of their revenue, said Bai Yunhu, a beauty industry expert and founder of Meiyun Space E-commerce. This is one of the key differences between local and international enterprises. In the future, a model of 'one main brand combined with multiple sub-brands' may become the standard for leading companies, he said.

Chicmax recently announced the upcoming launch of a makeup brand called NAN Beauty, created in collaboration with makeup artist Chun Nan. There have been several collaborations between local beauty companies and makeup artists prior to this, such as the tie-up between Proya and Tang Yi to create the brand Caitang. This makeup brand, founded in 2014, was acquired by Hangzhou-based Proya in 2019 and in 2023 saw its revenue surpass CNY1 billion (USD137.7 million) for the first time.

Editor: Kim Taylor