Douyin, China's rapidly growing social media platform, presents both opportunities and challenges for global beauty brands. Launched in 2016, it has attracted massive user engagement, with 750 million users spending an average of 72 minutes per session. Beauty brands see Douyin as a key player in China’s e-commerce, with over a third of transactions expected on the app. However, brands, including Procter & Gamble and Estée Lauder, are facing difficulties due to the high cost of traffic, leading to losses despite the platform's attractiveness.
"The economic equation that Douyin offers is not favourable," said Jacques Roizen, noting the app's high traffic costs are challenging for many beauty brands.
Goldman Sachs estimates that this year, over a third of Chinese e-commerce beauty transactions will take place on Douyin or its rival, Kuaishou.
Estée Lauder's new CEO acknowledged that the company did not move fast enough with Douyin and that its Chinese business has been a primary engine for growth.
With Douyin’s user engagement and rapid beauty category sales growth, brands must balance profitability against the high costs of marketing on the platform.
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