Sephora China's revenue shrank 40% from its peak — ¥1.5B in losses over four years

Sephora entered China in 2005 through a joint venture with Shanghai Jahwa, positioning itself as the gateway for prestige beauty brands. By 2021, revenue peaked at ¥10.9 billion — the undisputed leader in China's high-end beauty retail, with exclusive partnerships with nearly every major Western brand.

The decline began in 2022, when online beauty sales surpassed offline for the first time. Sephora's revenue fell to ¥8.5 billion and it posted its first-ever loss of ¥191 million. Over the next three years, the situation worsened: revenue dropped to ¥7.1 billion in 2024 with a ¥646 million loss, and to ¥6.5 billion in 2025 with a ¥499 million loss. The four-year cumulative loss reached ¥1.5 billion.

More than 30 exclusive brands left Sephora's shelves between 2022 and 2025, including many that launched their own direct-to-consumer channels on Tmall and Douyin. Meanwhile, domestic beauty retailers like THE COLORIST and HARMAY eroded foot traffic, and the rise of livestream e-commerce shifted beauty purchases away from physical stores entirely.

Sephora responded by introducing affordable Chinese brands and opening stores in lower-tier cities, but the pivot diluted its premium positioning. By 2025, revenue had shrunk 40% from its peak. Three CEOs came and went in 18 months, and LVMH's global CEO took over China operations directly.