Sephora Joins TikTok Shop as High-End Beauty Retailer Shifts to Content E-Commerce

The once-dominant beauty retail giant is now venturing into content-driven e-commerce platforms, marking a significant shift in its global strategy.

On September 2, LVMH-owned premium beauty retailer Sephora officially announced its entry into TikTok Shop. Starting September 19, the company will pilot the "Sephora Drop Shop" model in the U.S. market, with select new product exclusives launching on this new channel.

This move is just one of many transformations Sephora has undergone in recent years, particularly in China.

A Series of Drastic Changes in China

Since 2024, Sephora China has implemented a series of intensive reforms, including:

• Store closures and layoffs
• A major management shakeup, including a change in Greater China General Manager and the global CEO personally taking over China operations
• Large-scale introduction of local affordable beauty brands, including some from Douyin (TikTok's Chinese counterpart)
• Ending a 22-year joint venture with Shanghai Jahwa

These changes come amid significant financial strain. Data shows that from 2022 to 2025, Sephora China's sales continued to decline, with cumulative losses exceeding RMB 1.4 billion (approx. USD 193 million).

Editor's Note: Sephora China's core operations are run through two joint ventures: Sephora Shanghai and Sephora Beijing.

As content e-commerce plays an increasingly vital role in beauty retail, how will this global premium beauty retailer redefine its value?

Part 1: Leaving Jahwa, Embracing TikTok

In August, Shanghai Jahwa sold its 19% stakes in both Sephora Shanghai and Sephora Beijing to Sephora Asia for EUR 70 million (approx. RMB 555 million), ending a 22-year partnership. Following the transaction, Shanghai Jahwa fully exited the two joint ventures operating Sephora China.

Shanghai Jahwa Chairman and CEO Lin Xiaohai stated that the decision was driven by the company's strategic focus on its core brands.

Less than a month later, Sephora turned to TikTok, likely aiming to tap into new global traffic and explore growth opportunities.

The Decline After a Golden Era

Sephora China once enjoyed a period of strong performance. From 2019 to 2021, the combined net profit of Sephora Shanghai and Sephora Beijing approached RMB 1.5 billion, with revenue peaking at RMB 10.877 billion in 2021.

However, from 2022 onward, performance began to slide:

| Year | Revenue (RMB) | Net Profit (RMB) | |------|---------------|------------------| | 2021 | 108.77 billion | +4.31 billion | | 2022 | ~85.48 billion (-21%) | -1.91 billion | | 2023 | — | -1.41 billion | | 2024 | — | -6.45 billion | | 2025 | — | -4.99 billion |

Total losses from 2022 to 2025: RMB 1.476 billion.

In the first half of 2026, Sephora Shanghai posted a modest net profit of RMB 281,200, while Sephora Beijing still lost RMB 52.81 million. Revenue grew slightly by ~2% to RMB 3.519 billion.

Why Is Sephora Struggling?

Sephora's traditional model—"exclusive curation + one-stop premium shopping"—has eroded under pressure from:

• Beauty brands shifting to direct-to-consumer (DTC) models
• Duty-free channels diverting sales
• Heavy discounting during e-commerce promotions

Its attempt to introduce affordable domestic brands has also risked diluting its premium brand equity.

Once dismissive of e-commerce, premium beauty brands now see content e-commerce as a primary sales channel. According to Charm.io, TikTok Shop's global beauty GMV grew from USD 200 million in 2022 to USD 10.2 billion in 2025—a 51-fold increase in three years.

Today, TikTok Shop's global beauty GMV has reached half of Sephora's global total.

Sephora is now accelerating its embrace of affordable brands, opening stores on TikTok, and even granting the platform exclusive new product launches. The balance of power in beauty retail is shifting dramatically, and Sephora's self-revolution is entering a critical phase.

Part 2: Searching for New Traffic

"Before, there were 25% off promotions at the beginning, middle, and end of the year. Now, there's an extra one in September," a Sephora sales associate in Beijing told Bullet Finance.

The 25% off event is typically Sephora's biggest discount of the year. Facing price pressure from e-commerce promotions, livestream subsidies, and duty-free daigou, these discounts have become a key draw for in-store customers.

Bullet Finance observed that Sephora's September storewide 25% off event only began in the last two years.

• September 5–10, 2025: "0-threshold 25% off" for all registered members
• September 6–11, 2025: Same storewide 25% off
• August 31–September 4, 2024: Only Gold Card members received 25% off; regular members got 15% off

Opening Doors to Local Brands

Sephora is also expanding its brand roster to attract new traffic.

• December 2025: Sephora announced the entry of several Chinese emerging beauty brands, including Sanzitang, Joocyee, Red Chamber, Lianhuo, OUT OF OFFICE, and BABI.
• April 23, 2026: Sephora added 11 more domestic brands, including Florasis, Perfect Diary, Marie Dalgar, Judydoll, Fangli, INTO YOU, Fencun, Youyi, Gǔyǔ, C-Ka, and Yushu.
• September 2026: Sephora introduced Proya's hair care brand Off&Relax, and beauty device brands Aimode, Jimeng, and Lanzhi.

In July, Bullet Finance visited a Sephora in Beijing and found new domestic brands like Sanzitang and Judydoll prominently displayed at the entrance. By September, however, foot traffic at those counters had noticeably cooled.

"Right after they were introduced, there was a lot of promotion and people buying. It was hot for a few months. Now, very few people buy them," the sales associate said.

She noted that brands like Sanzitang, Judydoll, and Little Ondine were not participating in the September 25% off event, while Gǔyǔ and East Wild were among the few domestic brands that did.

Price may be a key factor. Many Sanzitang and Judydoll products are under RMB 50, while Gǔyǔ and East Wild products are typically over RMB 100.

While introducing popular domestic brands is worth trying, whether it will alleviate Sephora's challenges in China remains uncertain.

"Domestic brands have their own flagship stores with frequent discounts. What's Sephora's advantage? Can't people just shop online themselves?" one netizen questioned under Sephora's announcement.

Interestingly, despite Sephora's premium positioning, high-demand luxury brands like La Mer and Helena Rubinstein—frequent top sellers on e-commerce platforms—have limited presence in Sephora stores. Meanwhile, top domestic brands like Proya and Kans are notably absent from its new brand lineup.

"High-end customers value one-on-one service, personalized customization, and VIP spa treatments. Independent stores and counters are better suited for that. There's also concern that third-party staff may lack sufficient brand knowledge," said Zhang Jianrui, a veteran beauty industry professional.

He added that major domestic brands already have mature distribution systems and don't need Sephora for reach. "How many Sephora customers are specifically looking for Proya or Kans? These brands focus on mass appeal and value, not exclusivity."

For top domestic brands, Sephora's sales volume is not significant, while maintenance and training costs are higher. They also have more innovative ways to upgrade brand image—such as reading day events, women's empowerment campaigns, or AI short dramas—without relying on Sephora's "premium" storefront.

As a distribution channel at its core, Sephora's importance has diminished as beauty brands shift online and toward DTC models.

Part 3: Redefining Value for a Retail Giant

Despite pressure in China, LVMH's selective retail division—which includes Sephora—continues to grow, albeit at a slower pace.

| Year | Revenue (EUR) | Organic Growth | |------|---------------|----------------| | 2023 | 17.885 billion | +25% | | 2024 | 18.262 billion | +6% | | 2025 | 18.348 billion | +4% |

The combination of slowing global growth and mounting pressure in China serves as a clear warning: the challenges facing beauty retail are intensifying.

Zhou Ting, President of the Key Research Institute, noted that Sephora represents traditional retail, while beauty is one of the most digitally marketed categories. This mismatch has contributed to Sephora's decline.

Regarding the push for local brands, Sephora Greater China General Manager Ding Xia recently told media: "Sephora's success in over 30 countries has never relied on gathering luxury brands, but on rigorously selecting the most representative local brands from a global perspective and building long-term partnerships with them."

Sephora's Enduring Value

Even today, Sephora retains unique value.

"Sephora, as a platform, has its own way of surviving and remains an important part of the offline economy. Its influence may have waned, but its customer base, though shrinking, hasn't disappeared. Many domestic brands are willing to invest in premium lines just to be in Sephora, because they value its positioning and market influence. As the saying goes, 'An old Ferrari is still a Ferrari,'" Zhang Jianrui said.

He identified three key groups that still rely on Sephora:

1. Premium skincare and fragrance brands – as a regular distribution channel
2. High-margin niche imported brands
3. Emerging domestic brands – seeking quick market access and brand recognition to boost their online presence

"For the beauty industry, offline service can never be replaced by e-commerce. Especially for fragrance lovers, Sephora remains a friendly place to test scents without cost," Zhang added.

Slow Adaptation, Then a Rush

Sephora China's slow adaptation to the e-commerce era has led to the recent surge of domestic brand partnerships. Yet, the company has also shown willingness to meet consumer needs.

Since 2026, Sephora China has deepened collaborations with Douyin and Xiaohongshu (Little Red Book) both online and offline.

• Online: Using platform feedback to identify trends, Sephora launched "Spring/Summer 8 Major Trend Rankings" on Douyin and style-based shopping guides on Xiaohongshu.
• Offline: Sephora created themed shelves like "Douyin Beauty Picks" and "Trending Now" in stores, bringing online trends into physical retail.

Sephora is now attempting to tightly integrate its product selection logic with user behavior data, with content e-commerce platforms serving as a key lever.

From introducing affordable local brands to joining TikTok Shop, these moves point to a single conclusion: in the next phase of beauty retail, the power to define the shelf is shifting from retailers to content platforms that hold user behavior data.

Sephora officially launched on TikTok Shop in the U.S. on September 19, operating on a model of monthly exclusive launches + content preheating + TikTok livestreaming. New product launches, content seeding, and live-stream purchases all happen within the TikTok ecosystem.

As users begin to influence what goes on the shelf, and retailers no longer unilaterally decide what to sell, Sephora's transformation has reached a critical juncture.

The company must balance:

• Preserving its premium channel identity
• Compromising with traffic platforms and affordable brands for growth
• Repairing its loss-making China operations
• Adapting globally to the new rules of content e-commerce

With multiple objectives in play, Sephora will need to invest significantly more effort to secure its position in the ongoing restructuring of channel power.

Note: This article is by Hu Fangjie, originally published by Bullet Finance. The views expressed are the author's own and do not represent those of Ebrun Power.