（Singapore, 28.07.2026）Artificial intelligence is rapidly transforming China’s beauty industry, helping local cosmetics companies develop new products in months instead of years as they race to compete with established global brands in an increasingly crowded market.
Once known for relying on fast marketing and competitive pricing, Chinese beauty companies are now using AI throughout the product development process — from identifying consumer trends and discovering new ingredients to optimizing product formulas before they even enter the laboratory.
The shift comes as growth slows in the world’s second-largest beauty market, forcing domestic brands to find new ways to stand out while consumers increasingly demand scientifically proven skincare products rather than marketing claims alone.
One of the clearest examples is Guangzhou-based Yatsen Holding, owner of brands including Perfect Diary. Bloomberg reported that ahead of last year’s Singles’ Day shopping festival, the company launched a new skincare serum featuring PDRN, one of the industry’s fastest-growing regenerative ingredients.
Behind the launch was an AI-powered research process that compressed what would normally take more than two years into just six months. The technology helped researchers narrow a list of more than 50 potential ingredients to just three candidates within a week, significantly shortening the product development timeline.
Industry observers say this ability to move quickly has become one of China’s biggest advantages.
“Western brands currently bring more AI horsepower to discovery and validation, while Chinese brands bring more speed from lab to shelf,” Adam Knight, co-founder of YASO, a platform that helps Western beauty brands enter the Chinese market, told Bloomberg.
China’s highly digital retail environment is accelerating that advantage. Livestreaming, e-commerce platforms and social media generate huge amounts of consumer data every day, allowing companies to identify emerging beauty trends almost instantly and incorporate those insights into product development.
Chinese cosmetics brand Florasis, for example, uses AI to analyze customer interactions and online reviews after each livestream session, helping refine both its marketing strategy and future products.
The race to innovate comes at a challenging time for the industry. After years of rapid expansion fueled by online shopping and heavy discounting, China’s beauty market is beginning to lose momentum. Cosmetics sales increased only 2.8% in 2025, according to the China Association of Fragrance Flavour and Cosmetic Industries.
Even the country’s largest domestic beauty companies are feeling the pressure. Proya Cosmetics reported its first annual revenue decline since 2016, while Yatsen remained unprofitable despite reducing its losses.
At the same time, international brands have started regaining market share in China’s premium beauty segment, particularly on Alibaba’s Tmall and Taobao platforms, highlighting the growing competition facing local players.
Instead of focusing mainly on brand names, more shoppers are studying the science behind skincare products. According to market research firm Mintel, about 35% of Chinese consumers research cosmetic ingredients before making a purchase, a higher proportion than consumers in either the United States or the United Kingdom.
Many buyers are looking for products that promise measurable improvements such as brighter skin, wrinkle reduction or anti-aging benefits, placing greater importance on clinically supported ingredients.
“Chinese consumers now compare cosmetics against Botox, GLP-1s and cosmetic surgery, demanding clinical proof of results,” Cheng Jing, chief scientific officer at Yatsen, told Bloomberg.
To meet those expectations, beauty companies are increasingly using AI to accelerate scientific research.
Proya said AI-powered molecular screening has identified dozens of promising ingredients for hair-loss prevention while reducing research time to a fraction of that required using traditional methods.
The company also plans to introduce AI-discovered peptides into its flagship skincare products. Researchers are using AI to predict how different ingredients will interact before laboratory testing begins, reducing both development costs and time.
Many cosmetics companies are finding that they cannot build these advanced AI capabilities on their own. Instead, they are partnering with biotechnology startups that combine artificial intelligence with synthetic biology to discover and manufacture new cosmetic ingredients more efficiently.
Beijing-based Veminsyn, backed by L’Oréal, uses AI to identify promising cosmetic ingredients, predict their performance and optimize them before laboratory testing. The company supplies more than 350 domestic and international beauty brands, including Proya and L’Oréal.
According to the company, AI enabled researchers to narrow more than one million collagen fragments to just seven promising candidates within two months before successfully commercializing three new ingredients.
Another biotechnology company, Bota Biosciences, estimates AI can reduce the cost of developing a new cosmetic ingredient from tens of millions of dollars to just a few million dollars. Research reports that once took weeks to prepare can now be generated within minutes.
Its laboratory-grown human elastin, designed to improve skin firmness, reached production in about one year, compared with three to five years using conventional research methods. It is already being used in a Proya skincare serum.
China’s regulatory reforms have also helped accelerate innovation. In 2021, authorities replaced a lengthy approval process for new cosmetic ingredients with a filing system that can be completed within days.
Since then, around 500 new cosmetic ingredients have been filed in China, compared with only 14 approved between 2004 and 2021. Domestic companies account for most of those new filings.
Despite the rapid progress, analysts say Chinese beauty brands still face challenges in building globally recognized products that can rival the international success of Japanese and South Korean cosmetics.
Meanwhile, global beauty giants are also expanding their AI investments. L’Oréal has partnered with IBM and Nvidia on AI-powered beauty formulation and ingredient simulation, Estée Lauder is working with Microsoft on consumer research and trend forecasting, while Unilever has introduced AI-assisted skincare and haircare products under brands including Pond’s and Dove.
With competition intensifying and overall market growth slowing, companies are increasingly viewing AI not simply as a technology upgrade, but as a strategic advantage.
“The market is no longer growing the way it was,” Knight told Bloomberg. “Growth now comes from taking share in an intensely competitive field, and AI-driven speed is how you take it.”
