Chinese indigenous cosmetics brand Mao Ge Ping (毛戈平·MGPIN) is emerging as a dark horse in the premium beauty market. In December 2024, it became the first cosmetics brand founded in mainland China to be listed on the Hong Kong stock exchange, earning the title of 'China's indigenous beauty champion,' as its stock prices and performance soared.
Mao Ge Ping is a representative premium cosmetics brand in China, with flagship products like powder pact and cushion foundation. Although its prices are as high as those of global department store brands, it showcases designs that blend traditional Chinese aesthetics, garnering popularity primarily among the 20s and 30s demographic. It is currently present in dozens of department stores in major Chinese cities. It was listed on the Hong Kong stock exchange on December 10, 2024.
According to the company, Mao Ge Ping was founded by renowned Chinese makeup artist Mao Ge Ping. Born in 1964, he transitioned from studying acting to theater makeup around the age of 20. Mao Ge Ping gained widespread popularity after successfully making the lead actor Liu Xiao Qing look 10 to 80 years younger as the makeup artist for the drama 'Goddess of the Sea.' In 2000, he established a cosmetics brand under his own name and opened China's first beauty school, becoming a pioneer in the popularization of the beauty industry in China. Through his educational business, he has trained over 150,000 professionals across nine cities.
◇ 'Founder's recognition' drives while 'premiumization strategy' pulls... China beauty catching up to Chanel
Mao Ge Ping has chosen premiumization as a key strategy. According to Bloomberg News, Mao Ge Ping maintains pricing policies similar to global premium brands. The most representative powder product is priced at 380 yuan (approximately 73,000 won), comparable to similar products from Shiseido and NARS, priced at 390 yuan (about 75,000 won). Given that most indigenous Chinese brands sell similar products for less than 200 yuan (approximately 38,000 won), this is quite expensive.
The reason the premium strategy is effective lies in the trust in the brand. Founder Mao Ge Ping is a symbolic figure in the Chinese beauty industry, akin to Jeong Saem Mool in Korea. His fame has had a direct impact on increasing brand recognition. According to Dong Fang Cai Fu, a Chinese securities firm, Mao Ge Ping still oversees all aspects of product planning and has upgraded an average of about 75 products per year from 2021 to the first half of 2024. He is also collaborating with world-class OEM companies like Intercos in Italy to manage quality.
The unique identity combining traditional Chinese aesthetics is another characteristic of Mao Ge Ping. Particularly, the 'Qi Yun Dong Fang (气蕴东方)' series, created in collaboration with the Forbidden City, sparked cultural pride among local consumers and achieved significant success. Subsequently, Mao Ge Ping was selected as a cosmetics supplier for the Hangzhou Asian Games, collaborating with national teams in swimming and gymnastics, further developing its 'national brand' image.
Experiential marketing has also been effective. In its early years, there were concerns that Mao Ge Ping might struggle to establish a presence as an indigenous cosmetics brand in a distribution market dominated by global brands. However, Mao Ge Ping utilized its educational capabilities to conduct makeup demonstrations and one-on-one personalized consultations in department stores, successfully attracting consumer attention.
Thanks to this, Mao Ge Ping's offline channel repurchase rate stands at 28.7%, exceeding the industry average. The popularity of makeup experiences in department stores led to the Shanghai branch achieving nearly double the revenue target of 190,000 yuan (approximately 3.644 million won) in its first month after opening.
◇ Average annual revenue growth rate of 35%, stock price doubled within three months of listing
According to a report published by Dong Fang Cai Fu this year, Mao Ge Ping is the only indigenous brand listed among the top 15 premium cosmetics brands in China as of 2023. It has a market share of 1.8%, closely chasing Chanel's 2% market share. While the absolute market share is small, considering that global beauty giants like Estée Lauder, Lancôme, and L'Oréal occupy over 55% of the Chinese premium cosmetics market, this is a significant achievement.
According to local reports, Mao Ge Ping's revenue reached 1.577 billion yuan (approximately 302.5 billion won) in 2021, 1.829 billion yuan (approximately 350.8 billion won) in 2022, and then grew to 2.886 billion yuan (approximately 553.6 billion won) in 2023, achieving 3.885 billion yuan (approximately 745.1 billion won) in revenue last year, continuing its growth trend. The average annual growth rate over the past five years has reached 35%.
Stock prices are also soaring. On the listing day, December 10, 2024, Mao Ge Ping's stock price jumped as much as 92%, drawing market attention. After about three months, the stock price has more than doubled. Until recently, it has been trading around 100 Hong Kong dollars (approximately 17,516 won), about double the closing price on the listing day (52.6 Hong Kong dollars or approximately 9,213 won).
Mao Ge Ping is not satisfied with domestic achievements and is expanding its distribution network. It has begun overseas expansion, starting with collaborations with influencers in Vietnam, and began distributing through Sephora, an LVMH-affiliated channel in Hong Kong, since July of last year. It is also preparing to enter overseas department stores.
Dong Fang Cai Fu has projected that Mao Ge Ping will record sales of 5.31 billion yuan (approximately 1.186 trillion won), an increase of over 40% compared to the previous year. It also expects a net profit increase of over 35% to reach 1.28 billion yuan (approximately 245.5 billion won).
Dong Fang Cai Fu noted, 'Mao Ge Ping is steadily expanding its distribution network and showing continuous growth in both skincare and color sectors. Therefore, its future growth potential is substantial,' while also stating that 'the overall cosmetics industry is intensifying competition, and there are risks of intensified competition in online sales channels and potential failures in new product launches that should be considered.'