Shanghai Lily&Beauty Cosmetics Co.,Ltd. delivered an unflattering first-half 2025 performance report — with declining revenue and a substantial net loss, marking a dramatic 1,315.98% year-over-year plunge that once again turned the company from profit to loss.

The secondary market performance has been equally lackluster. As of the close on August 28, Shanghai Lily&Beauty Cosmetics' stock price closed at 10.03 yuan, down approximately 80% from its historical high, with total market capitalization shrinking by over 80% to just 4.117 billion yuan.

The company attributed the performance losses primarily to overall profit decline and strategic investment in proprietary brands. When contacted on August 28, a representative from the company's board office indicated they would review the interview request but had not responded by press time.

An industry insider close to Shanghai Lily&Beauty Cosmetics explained that the company's dismal performance stems from its heavy reliance on e-commerce platforms for the majority of its revenue, with excessive dependence on a single platform and limited presence on emerging platforms like Douyin, while traffic from major platforms has been diverted to newer platforms.

**Years of Declining Performance**

According to the 2025 interim report released on August 26, Shanghai Lily&Beauty Cosmetics recorded operating revenue of 831 million yuan, down 13.98% year-over-year. Net profit attributable to shareholders posted a loss of 32.759 million yuan, plummeting 1,315.98% year-over-year, again turning from profit to loss.

The company stated in its financial report that the decline was mainly due to terminated partnerships with Korean brands including Sulwhasoo, Whoo, and Avène, along with consumer weakness that pressured traditional e-commerce. The shift to losses was primarily attributed to reduced gross margins and strategic investment in proprietary brands.

"Facing uncertainty in domestic economic recovery, consumers remain cautious about cosmetics consumption, with some products and categories experiencing 'consumption downgrading.' To address market changes, the company is committed to enhancing core competitiveness by leveraging data analysis and consumer insight capabilities to optimize brands' online sales," the company noted in its report.

Shanghai Lily&Beauty Cosmetics' performance weakness has been evident for some time. Since listing on the Shanghai Stock Exchange in September 2020, the company's revenue has been on a downward trajectory, declining from a peak of 4.155 billion yuan in 2021 to 1.728 billion yuan in 2024, a 37.44% year-over-year drop that marked a new low.

On August 14, when responding to an investor's question about "how to view your company's year-over-year deteriorating performance" on an interactive platform, the company stated that operations remain normal and management would continue to work diligently to expand brands, categories, and platforms to create value for investors.

The company's main business involves cosmetics online retail services, primarily providing online sales services for brand partners. According to financial reports, e-commerce retail business generated 757 million yuan in revenue, accounting for 91.12% of main business revenue. Partner e-commerce platforms include Tmall, Douyin, Xiaohongshu, JD.com, and Pinduoduo, with Tmall holding the largest share. Brand marketing and operational services generated 35 million yuan in revenue, representing 4.21% of main business income.

Lin Xianping, Associate Professor at Zhejiang University City College and Executive Deputy Secretary-General of China Urban Expert Think Tank Committee, believes that from external market conditions, the beauty industry has seen intensified competition in recent years, with emerging brands and channels continuously appearing. Consumer demands have become more diversified and personalized, traditional e-commerce platform traffic dividends have gradually diminished, and customer acquisition costs continue rising.

"Macroeconomic volatility and consumer weakness have also created pressure on the industry overall. From the enterprise perspective, Shanghai Lily&Beauty Cosmetics may have deficiencies in brand portfolio, product innovation, and supply chain efficiency, failing to adapt timely to market changes, leading to both revenue and profit declines. Additionally, over-reliance on a few core brands and platforms, lacking diversified positioning, has also increased operational risks," Lin told reporters.

**Seeking New Growth Points**

Shanghai Lily&Beauty Cosmetics' troubles extend beyond performance issues. On the evening of August 21, the company announced that equity transfers related to the divorce dispute between actual controller Huang Tao and his ex-wife Weng Shuhua had been completed. This social media "husband-seeking" incident spanning four years finally reached its conclusion, with the "former boss lady" receiving equity worth 170 million yuan.

Following this transfer, Huang Tao's shareholding decreased from 32.46% to 28.28% while remaining the actual controller. Weng Shuhua now holds 16.7475 million shares, representing 4.18% of total share capital, making her a significant shareholder. Based on the closing price of 10.24 yuan per share on August 22, Weng Shuhua's acquired equity was valued at over 171 million yuan, representing more than 40% appreciation compared to the judgment time.

Shanghai Lily&Beauty Cosmetics originated as a "Taobao couple store" founded by Huang Tao and his wife Weng Shuhua in 2007. On September 29, 2020, the company successfully listed on A-shares with an issue price of 12.23 yuan per share, raising 489 million yuan in actual proceeds. Starting from the listing debut, after 12 consecutive daily limit-ups, the stock price surged to a peak of 55.28 yuan per share, with total market capitalization exceeding 22 billion yuan. Subsequently, the stock price declined continuously, closing at 10.03 yuan per share on August 28, down 80% from its peak and below the issue price.

In 2021, less than a year after the company's listing, this entrepreneurial "couple partnership" "turned against each other."

Lin Xianping noted that actual controller divorce disputes may lead to unstable equity structure, affecting strategic decisions and long-term planning. Additionally, public and investor confidence in the company may be damaged, subsequently affecting stock price and market performance. The divorce case may also distract management attention, preventing focus on business development and addressing market challenges, indirectly leading to performance decline.

Continuous performance decline combined with ongoing founder couple disputes undoubtedly adds insult to injury for Shanghai Lily&Beauty Cosmetics. Against this backdrop, traditional e-commerce companies are all seeking transformation.

Lin Xianping indicated that transformation and upgrade paths for traditional e-commerce include expanding diversified channels such as social commerce and live streaming sales to reduce dependence on single platforms; strengthening data-driven operations through consumer behavior analysis to optimize product selection and marketing strategies; promoting supply chain digitalization to improve inventory management and logistics efficiency; focusing on brand building and customer relationship management to enhance user loyalty and repurchase rates.

Consecutive setbacks have made Shanghai Lily&Beauty Cosmetics realize the necessity for change. On June 20, the company revealed on an investor interaction platform that to address current business growth slowdown difficulties, it has decided to enter the Douyin market and established a dedicated Douyin business division aimed at creating Douyin live streaming rooms for partner brands. This represents an important attempt by Shanghai Lily&Beauty Cosmetics to seek new growth points.

Whether this belated effort will prove timely remains to be tested by time.