DFZQ has released a research report stating that the cosmetics category has demonstrated remarkable consumer resilience and superior relative performance despite overall pressure on the retail market. Currently, the fund holding proportion in the beauty and personal care sector is at a historically low level, and the market's pessimistic expectations have been largely digested. The firm suggests focusing on the following three areas going forward: 1) companies with clear prospects for marginal earnings improvement; 2) premium brands that align with the K-shaped consumption trend; and 3) firms that have timely expanded into overseas markets, creating new growth drivers. The main views of DFZQ are as follows:
June Cosmetics Retail Data Significantly Outperforms Broader Consumption
In June 2026, total retail sales of consumer goods grew 1.0% year-on-year for the month, while retail sales at major enterprises (above a designated size) fell 2.0% year-on-year. Against this macroeconomic backdrop, retail sales of cosmetics products at major enterprises showed strong upward momentum, increasing 12.6% year-on-year in June alone. Reviewing the overall trend for the first half of 2026, the beauty and personal care sector consistently and significantly outperformed the broader market, with year-on-year growth rates of 4.5%, 8.3%, 4.7%, and 2.5% from January-February through May, respectively. This underscores the category's strong consumer resilience and excellent relative performance in a pressured overall retail environment.
618 Online Promotions See Cosmetics Outperform Other Sectors, Industry Accelerates Shift to Value-Based Competition
The standout performance of the cosmetics market in June was primarily driven by this year's 618 shopping festival. During the 2026 618 promotion period, the total sales value of the cosmetics market on comprehensive e-commerce platforms grew 9.8% year-on-year across the entire cycle, with the beauty and skincare category alone generating a transaction volume of 42.5 billion yuan. Competition within the industry is intensifying, with a crowded mass market lacking barriers, but brands are fully moving away from the traditional "volume-for-price" model towards a "value war" centered on "product innovation + brand building + refined user operations." 1) Consumers are increasingly willing to pay a premium for "proven efficacy" and "exclusive ingredients"; 2) Platform dynamics are shifting, with traffic favoring "high-value user retention" over "low-price volume chasing," and quality resources focusing more on user groups with high repurchase rates (e.g., Tmall's 88VIP); 3) Brands are proactively reducing reliance on influencer live-streaming, focusing instead on in-store broadcasts and shelf-based channels to build private domain assets. The firm believes that in an environment of fading traffic dividends and a full industry upgrade towards a high-quality "value war," brands that adhere to a long-term philosophy, steadfastly return to product innovation, deepen brand building, meticulously cultivate user needs, and can partner with platforms offering clear value are more likely to navigate the competition for existing value, achieving sustainable growth.
Some Companies Have Reported First-Half Results, Showing Improvement
1) Lafang Household Chemical Co., Ltd.: Estimated first-half net profit attributable to shareholders of 37 to 41.5 million yuan (a year-on-year increase of 482%~552%), primarily driven by continuous optimization of its business and product category structure, as well as improved resource allocation efficiency from cost reduction and efficiency enhancement.
2) Liren Lijia Co., Ltd.: Estimated first-half net profit attributable to shareholders of 22 to 27 million yuan, achieving a turnaround to profitability year-on-year (a loss of 33 million yuan in the same period last year). While stabilizing its traditional e-commerce business, the company's newly established overseas brand agency business continues to scale up, contributing to gross profit, and marketing expense efficiency for its own brands has been effectively controlled.
3) Ruoyuchen Co., Ltd.: Estimated first-half net profit attributable to shareholders of 145 to 159 million yuan (a year-on-year increase of 100%~120%). The strategic value of its own brands (e.g., Zhanjia, Feicui) has become prominent, and the company's digital transformation has yielded significant results, with deepened application of large AI models effectively driving personnel efficiency and expense optimization.
4) Langzi Co., Ltd.: Estimated first-half net profit attributable to shareholders of 65 to 95 million yuan (a year-on-year decrease of 65.78%~76.59%), with adjusted net profit of 130 to 170 million yuan. The significant profit decline was mainly dragged down by non-recurring factors, including a year-on-year decrease in gains from the disposal of Ruoyuchen shares, losses from fair value changes of remaining shares, and additional tax payments. Excluding these impacts, the net profit from the company's core daily operating business is estimated to have grown 30% to 60% year-on-year, primarily benefiting from active market expansion and continuous optimization of the product structure in its women's apparel and medical aesthetics segments, driving steady revenue growth, while supply chain optimization and refined management led to a year-on-year decrease in the comprehensive cost and expense ratio.
Risk warnings: Continued weakening of end-consumer demand, new product launches falling short of expectations, and intensifying industry competition.