Annual sales nearing 20 million, domestic beauty brands are creating a batch of "hidden champions" on Pinduoduo

Seller/LinkedMall

As the domestic beauty industry shifts from explosive growth to rational development, finding a sustainable and high-quality brand evolution path has become a shared concern across the industry’s upstream and downstream.

From an industry ecosystem perspective, there has long been a group of “invisible champions” on the supply side of domestic beauty products. Many are rooted in industrial belts such as Yiwu and Chaozhou-Shantou, relying on decades of OEM experience to develop mature production capacity and quality control capabilities. However, they are hindered by weak brand recognition and remain at the end of the value chain.

On the consumer side, young consumers are increasingly disenchanted with big brands, with extreme cost-performance and quality becoming core demands. This creates an opportunity for merchants with manufacturing advantages but lacking brand awareness to break through.

Different e-commerce platforms, based on their unique ecological characteristics, have formed differentiated brand incubation paths. Among them, Pinduoduo, which excels at connecting large manufacturing bases with vast consumer bases, is gradually becoming an important arena for a batch of “invisible champions” to step into the spotlight and achieve brand transformation.

By the end of 2025, Pinduoduo announced an “All in” strategy for high-quality, branded Chinese supply chains. Centered on deep co-creation with industrial belts, it aims to promote dual upgrades in quality and branding across the supply chain. This empowerment logic is driving a number of Yiwu-based domestic beauty brands to transform from OEMs to online brands, from white-label products to new-quality brands.

01

The Beautiful Transformation from White Label to New-Quality Brands

Cherrflor Youle Zhe is a merchant from Yiwu’s beauty industry belt, and its transformation path is quite representative. The company initially relied on international brand OEM experience to build strong R&D and manufacturing capabilities but was long in the exploration stage of developing its own brand. In recent years, it strategically focused on Pinduoduo as one of its main brand incubation platforms and achieved a leap.

In fact, many local merchants in Yiwu’s beauty industry belt have similar development experiences to Cherrflor Youle Zhe. They have manufacturing advantages, have long provided OEM services for international beauty brands, and have formed core competitiveness in production stability and quality control. However, the flip side is that these merchants lack their own brands, resulting in weak premium pricing ability and dependence on upstream orders. Transitioning to independent operation has become an inevitable choice.

These merchants uniformly regard Pinduoduo as their core brand incubation platform. The key logic is that, amid the focus on brand premiums and high traffic costs on some platforms, the large user base of Pinduoduo includes a significant proportion of consumers who value quality and cost performance, aligning highly with brand positioning. They optimize pricing strategies based on platform cost structures, employing a “quality-price ratio” business approach to precisely target niche markets, avoid homogeneous low-price competition, and gradually build brand reputation.

In this process, the platform’s lower operational and traffic costs enable merchants to focus more resources on product refinement and user operations, forming a growth cycle of “high-quality supply - precise reach - stable repurchase,” and gaining platform certifications and resource support such as “Black Label.”

Personal care brand Verbena Linn Wenli also demonstrates a similar development logic, charting a distinctive growth path. From relying on distribution to focusing on self-operated sales, it has gained stable organic traffic and user loyalty on Pinduoduo through high cost-performance products, achieving healthy scale growth.

As a six-year “old store,” Verbena Linn Wenli was certified as a Pinduoduo “Black Label Merchant” last year. Relying on the platform’s low-cost operation advantages, it does not need to invest heavily in advertising, maintaining stable sales through organic traffic alone. Its hand cream, priced at just a few dozen yuan, targets young students born after 2005, with solid quality fostering stable repurchases, ultimately generating nearly 20 million yuan in annual revenue on Pinduoduo.

According to Huang Kangfeng, the founder of Verbena Linn Wenli and a post-90s entrepreneur, Pinduoduo is especially valuable for “factory-type” merchants with solid supply chains but limited e-commerce experience. Through data insights and traffic support, the platform can efficiently help merchants convert production capacity into popular market products.

These cases collectively show that for merchants with a strong supply chain but weak brand presence, choosing the right channels and focusing on product quality and user experience is a practical and feasible brand development path.

02

Brand Building Requires Long-term Support

Looking back at the rise of the previous generation of domestic beauty brands, most were deeply tied to traffic dividends brought by live streaming e-commerce and community platforms. However, over-reliance on top influencers and marketing investments has gradually exposed vulnerabilities—high marketing costs severely squeeze R&D and profit margins, and the connection between brands and consumers is built on fragile paid traffic. The so-called user loyalty is like a “paper tiger” that can be easily broken, leading to insufficient risk resistance for brands.

In recent years, the first-generation domestic beauty brands have generally fallen into a distorted structure of “heavy marketing, light R&D.” Data shows that in 2024, Meisheng Co., Ltd. spent 3.947 billion yuan on marketing, accounting for 58.1% of revenue, while R&D expenses were only 180 million yuan, just 2.6%. Under this model, brands often pay half or more of sales to influencers and advertising, forcing companies to drastically cut production costs and sell at high prices.

I believe that the first-generation domestic beauty brands have entered a low traffic phase. The rise of new domestic beauty brands requires avoiding past mistakes, working with platforms to focus on product innovation, channel deepening, and brand building.

Industry reshuffling is forcing brands to return to their core management principles. Some beauty industry belt merchants have expressed the same view: “We are not pursuing to be industry leaders but are more focused on our own pace and internal capabilities. We aim to solidly refine the complete system including strategy, production, branding, and channels to build a truly sustainable brand ecosystem.”

Huang Kangfeng told me that Verbena Linn Wenli is currently mainly focused on original design and quality control. It ensures solid materials on a friendly price basis and builds emotional connections with users through long-term operation, accompanying consumers from student years into the workforce.

The rational growth of new-generation domestic beauty brands also raises new requirements for platforms. Unlike short-term traffic campaigns, brand building needs long-term “patience capital” support. Only by creating an ecosystem that nurtures growth and jointly strengthening quality and R&D foundations can the industry achieve a healthy cycle. This is both a challenge for new domestic beauty brands and an important opportunity for industry upgrading.

03

Mutual Efforts Between Brands and Platforms

The relationship between platforms and brands is evolving from simple traffic transactions to deep collaboration and value co-creation. Represented by Pinduoduo, the platform has built a comprehensive empowerment system from product R&D to brand development through systematic initiatives like “Hundred Billion Support” and “New Quality Merchant Support Plan,” helping emerging brands achieve quality growth.

Its core logic is to use the platform’s big data to help brands accurately identify niche needs, enabling small-batch, quick-response flexible production, greatly reducing trial-and-error costs for new products.

Meanwhile, by cutting redundant marketing steps and lowering operational thresholds, Pinduoduo passes more profits to production and consumption sides, allowing brands to focus on quality improvement. This model particularly suits large consumer groups sensitive to brand premiums and seeking cost performance, providing a broad testing ground and growth channel for domestic white-label and innovative brands with product advantages.

Data shows that some domestic beauty brands’ Pinduoduo Black Label stores have a repurchase rate exceeding 35%, with 70% of consumers being post-90s. Why can Pinduoduo be more patient in growing with brands and help them achieve “quality growth”?

I believe that Pinduoduo’s unique new e-commerce model has attracted more young consumers who are disenchanted with big brands and pursue extreme cost performance. This requires the platform and brands to focus on the products themselves. Brands like Verbena Linn Wenli, which have strong manufacturing, R&D, and innovation capabilities—even as white-label products—can still win more user votes.

The next chapter for domestic beauty is destined to be a comprehensive competition. How brands and platforms integrate may become a key factor influencing the future industry landscape.