The first pure skincare brand to fall this year has emerged.

Qingyanhao recently learned that Boscia, a pure skincare brand under the Japanese FANCL group, announced on its official website that it will officially close on May 31 this year. It is also the first pure beauty brand facing closure this year.

According to public information, Boscia is a brand under the FANCL group that focuses on the overseas market. It caters to the European and American pure beauty market with the concept of "natural" and "0 additives," and was once popular in Europe and America. However, it has been found that the brand's revenue has shrunk to less than 50 million yuan, declining for several years.

01 Performance has shrunk significantly, and the Chinese market has not been affected for the time being.

Public information shows that Boscia, founded by Kenji Ikemori in 2002, is a mid-to-high-end skincare brand created by the FANCL group for the European and American markets. Therefore, Boscia is also known as the European and American version of FANCL, with product prices ranging from 198 to 578 yuan.

The brand inherits the "0 additives" concept of the FANCL group, adhering to the concept of natural plant-based skincare from the beginning. Its product ingredients are all derived from natural plants, claiming to contain no chemical preservatives, artificial fragrances, or colorants, and have completed cruelty-free certification, once selling well.

However, a recent statement on the Boscia official website shows that the website will officially close on May 31, and before the closure, all products on the website will be cleared at a 45% discount. "We regret to inform you that we will close our website on May 31. Sincere thanks for your support over the years. Thank you for being part of this journey with us."

After the news of the clearance and closure of the brand came out, many domestic netizens expressed their feelings, saying "I especially like their makeup remover and facial cleanser" and "How could such a good brand with good ingredients go out of business?" However, some netizens also mentioned that the pricing of the brand's products has been increasing, with their star product, the cleansing gel, previously priced at 168 yuan during a promotion, now selling for around 200 yuan, losing its cost-effectiveness.

Boscia did not explain the reason for the closure, but based on the brand's performance in recent years, the continuous decline in revenue seems inevitable.

According to Qingyanhao, in the past five years, Boscia's performance has shown a downward trend. In the peak of the 2020 fiscal year, the turnover was only 132 million yuan. Since then, the performance has been declining, with the turnover in the 2023 fiscal year shrinking to only 36.78 million yuan, which is two-thirds less than before. FANCL Group stated in its financial report that the main reasons for the decline were the sluggish wholesale sales to physical stores and the negative impact of the pandemic.

It is worth mentioning that at the beginning of this year, FANCL Group President Kazuhiro Shima mentioned in his New Year's address that in the field of cosmetics, both FANCL and Athenia will formulate future strategies for the Chinese market. There was no mention of Boscia.

As for whether the closure of Boscia's North American official website will affect its operations in China, Qingyanhao Wai also verified with Tmall Boscia Overseas Flagship Store for the first time. The store's customer service responded that all products in the store are directly supplied from overseas and they have not received any notice of closure, so it does not affect operations in China. Boscia's official account on Xiaohongshu also replied to netizens in the comments section, stating that the Chinese market is operating normally.

From the operation of Boscia on major platforms in China, it can be seen that its official Douyin account has stopped updating since the latest video was posted on March 30 this year; its Xiaohongshu platform account is currently operating normally, and in April, it cooperated with celebrity artists such as Dong Jie and Shen Mengchen for live streaming and sales; the brand's Tmall overseas flagship store is participating in Tmall's 510th anniversary celebration. From this perspective, it seems that Boscia's operation in the Chinese market has not been greatly affected.

However, some senior industry experts also pointed out that there may be a time difference in the brand's regional strategy, and whether the operating strategy in the Chinese region has been adjusted still needs to be observed. After all, a brand's global operation and market strategy are usually closely linked.

In addition, overall, FANCL's cosmetics business sales are also not ideal. The financial report shows that FANCL's cosmetics business sales reached approximately RMB 3.561 billion in the 2020 fiscal year, but declined to approximately RMB 2.695 billion in the 2023 fiscal year.

02. Transition from Sephora China to Cross-border E-commerce

It is worth noting that in FANCL Group's mid-term business plan for the 2021 fiscal year to the 2023 fiscal year, it was stated that the goal for Boscia is to promote the brand in the United States, Europe, Australia, China, and other markets, and increase sales by launching high-end products to enhance the brand's value.

Specific measures include further strengthening e-commerce, cooperating with excellent retailers in various countries, expanding sales areas, and establishing new high-end product lines for cosmetics specialty stores and department stores.

From the perspective of the Chinese market, Boscia has indeed adopted the above strategies. It is understood that the brand entered the Chinese market through Sephora in 2014, but the results were not ideal. It re-entered the Chinese market through cross-border e-commerce in 2021, which also aligns with the group's plan for the brand in the Chinese region and e-commerce channels.

Currently, Boscia's Tmall overseas flagship store has a total of 6 SKUs, including cleansers, essences, and lotions. The best-selling product, an amino acid cleanser, has sold over 10,000 units and was selected for the repurchase list of imported moisturizing facial cleansers, while the sales of other products are average.

In addition, ATTENIR, another brand under the FANCL Group, has followed a similar path. The brand opened its first counter in Shanghai in 2011, but due to product line adjustments and inability to keep up with the supply chain, it swiftly exited the Chinese market in 2013.

Currently, FANCL Group's market layout for ATTENIR is also mainly focused on cross-border e-commerce. The group stated on its official website that ATTENIR is mainly developing cross-border e-commerce in China and plans to start general trade sales around 2023.

In the nine-month financial report ending in December 2023, ATTENIR's revenue was RMB 547 million, a year-on-year increase of 11.9%. FANCL Group also stated in the financial report that the brand's revenue growth was mainly due to strong external mail order sales and the growth of cross-border e-commerce in China.

Moreover, in 2022, BRANCHIC, a high-end skincare brand under the FANCL Group, officially entered the Chinese market, less than a year after its establishment. The brand's first step into the Chinese market was also through the establishment of a Tmall overseas flagship store via cross-border e-commerce.

Currently, BRANCHIC has official accounts and stores on Weibo, Xiaohongshu, Douyin, and Tmall platforms, and has not yet entered offline channels.

In fact, apart from FANCL, none of the three brands under the FANCL Group, Boscia, ATTENIR, and BRANCHIC, have opened offline stores, and almost all of them are sold through cross-border e-commerce.

Compared to other Japanese cosmetics companies such as Shiseido, FANCL's strategy in China is more conservative, and choosing cross-border e-commerce also aligns with the consistent strategy of overseas brands entering the Chinese market. However, this channel may also impose certain limitations on brand awareness and sales.

03. Fierce Competition in the Pure Beauty Market

Returning to Boscia, in the Western markets, the concept of pure beauty and natural cosmetics has long been popular. However, if a brand lacks clear differentiation, insufficient product innovation, and still adopts a conservative marketing strategy, combined with the current economic downturn, it is difficult to avoid being eliminated by the market.

Not only Boscia, but The Body Shop, as a pioneer brand in the pure beauty field, has also initiated bankruptcy proceedings in its headquarters in the UK and in multiple locations such as the United States and Canada this year. It is reported that the brand has closed 50 stores in the United States and 33 out of 105 stores in Canada.

However, "where there's a will, there's a way." Boscia's marketing actions in the Chinese market are increasing, which may once again confirm that with the deepening of environmental protection concepts, the rise of ingredient enthusiasts, and the continuous growth of Chinese consumers' demand for safe and natural skincare, the momentum of pure beauty in China is strong.

According to the "2023 Pure Beauty White Paper" produced by Tmall Beauty and Beauty Industry Color Research Institute, the compound annual growth rate of the global pure beauty market from 2021 to 2024 exceeds 8%, with the compound annual growth rate of the Chinese pure beauty market reaching 10%, exceeding the global average growth rate.

Therefore, domestic Chinese pure beauty brands with a core concept of purity have emerged like mushrooms, such as LAN, DEYI, RED CHAMBER, and others. These emerging Chinese beauty brands, with a core concept of purity, nature, and health, not only meet consumers' urgent demand for pure beauty products, but also inject new vitality into the Chinese beauty market.

At the same time, beauty conglomerates such as Estée Lauder and L'Oréal have also increased their investment in the Chinese pure beauty market through investments and acquisitions. For example, Estée Lauder Group early invested in and incubated the venture capital company New Incubation Ventures, which invested in the Chinese domestic pure beauty brand CODEMINT in September 2023.

Although Boscia's operations in the Chinese market are currently not restricted, with more and more leading brands entering the pure beauty race, the market competition is becoming increasingly fierce, which also means that there are not many opportunities left for Boscia.

Note: 1. The 2024 fiscal year performance report of FANCL Group has not been publicly released.

2. The fiscal year of FANCL Group is different from the calendar year. The 2023 fiscal year is from April 1, 2022, to March 31, 2023, and so on.

3. Unless otherwise specified, the Japanese yen in the text has been converted into RMB at the real-time exchange rate.