(Yicai) July 2 -- China's once-mushrooming industry of domestic beauty brands is expected to keep eliminating weaker brands this year as the need for differentiation deepens.

Under the current circumstances, the entire industry will be reshuffled in a cycle of two to three years, industry insiders said to Yicai. Some enterprises that adjust their products will grow but others that do not will be weeded out as the reshuffle could continue in the second half, they added.

Last week, VNK, once a leading makeup brand, closed its Tmall flagship store, while its other channels, such as its WeChat account, WeChat mini-program, and Douyin platform, were suspended or closed. During the Double 11 shopping festival in 2020, VNK’s flagship store still exceeded CNY10 million (USD1.4 million) in sales.

The showdowns began already last year as another brand called It's Focus was the first local makeup brand to close that year. In the following months, many domestic brands, including Colorpedia and Fomomy, issued notices of store closure or clearance. The news was surprising as Fomomy had been ranked as a top-selling brand on Douyin and Taobao.

In the past few years, major e-commerce platforms favored novel beauty brands, giving rise to a large number of newcomers, insiders said. However, the trend gave birth to an influx of entrepreneurs who often use original equipment manufacturers or original design manufacturers, leading to a weak competitive barrier. As the products are almost similar and customer loyalty is poor, the popularity fades quickly, and brands that fail to attract more capital have to close shop, they explained.

Editor: Emmi Laine