LONDON — Too Faced, the seventh-largest prestige makeup brand in the U.S. that Estée Lauder Cos. acquired for $1.45 billion in 2016, is shutting down its Tmall Global flagship by August, prompting speculation on Chinese social media that the brand is exiting the market.
It appears that all products in the store have been taken down. Membership services and points redemption will remain open until July 27, according to the brand’s announcement on its flagship.
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In a statement to WWD, a spokesperson for Lauder said, “After a careful and thorough review, Too Faced Tmall global flagship store will cease its operations in August. This is an adjustment of distribution channel and will not impact Too Faced’s long-term strategy in China. We want to take a step back to better evaluate how we can best serve our customers here in the future. We look forward to continuing to bring inspiring products and unique experiences to our customers.”
Although the official flagship store is closing, consumers can still buy Too Faced products through the Australian beauty retailer Mecca’s Tmall Global flagship. There are only seven Too Faced products for sale on Mecca’s flagship currently, and the sales are in the single digits.
The high-wattage makeup brand, founded by Jerrod Blandino and Jeremy Johnson in 1998, entered the Chinese market in July 2020. It appointed popular Chinese actress Song Zu’er as brand ambassador shortly after to boost the brand’s presence in the market. But the hype didn’t last long and Too Faced hasn’t made any noise in the market since.
Chen Liang, managing director at communications consultancy éCLAIR Asia, believes that the prolonged COVID-19 pandemic in China was the main reason for Too Faced’s retreat since the cosmetics industry as a whole has been struggling as demand slumped.
The second reason is that China is “a different and extremely competitive market,” especially for the beauty sector.
“Chinese consumers have a lot of choices. The attention span is very short. You always need a sense of freshness to keep up with them. This freshness is not only at the marketing level, but also extends to the product level. This tests the ability of the brand to continue to turn out viral products.
“In Too Faced’s case, its products generated some discussion and buzz, but there was no major breakthrough. This model also imposes a high demand on the supply chain, which global players are usually not in a good place to compete with local ones,” she added.
On a marketing level, Chen posited that the brand needs to increase its spend significantly.
“Marketing investment is essential in China. The demand for KOLs and celebrities to maintain long-term exposure in front of the consumers is huge. Too Faced was too chill about it.
“Some of Estée Lauder’s brands have huge marketing budgets in China, so the group should not be a stranger to this,” she said. “So Too Faced’s poor performance should be a result of their choice, rather than unfamiliarity with the Chinese market.”
That said, young brands within the company in general have not yet performed at the same level as those who have been in the market for decades in China. Data from Moojing Market Intelligence gathered during this year’s Tmall’s 618 online shopping festival shows that Estée Lauder, La Mer and MAC Cosmetics entered the top 10 positions in the skin care and color cosmetics categories. Meanwhile Dr.Jart, a skin care brand the company acquired in 2019, and Tom Ford both fell out of the top 20 list.
As the second-largest beauty market in the world, during the pandemic China became a major driver of beauty sales, and big companies including L’Oréal and Estée Lauder Cos. benefited from the market’s acceleration.
But recently both of those companies recorded slowdowns in China. Lauder’s sales in the Asia Pacific region dipped 4 percent for the quarter ended March 31, due to reduced retail traffic as well as limited distribution capacity at its Shanghai facilities, which were subject to COVID-19 restrictions.