Oriental Securities: 2026 retail beauty care industry outlook focuses on domestic demand, overseas travel and beauty care innovation

The Zhitong Finance App learned that Orient Securities released a research report saying that in the opening year of the “15th Five-Year Plan”, the retail industry became the focus of domestic demand, channel regulation and emotional consumption boosted growth; cross-border e-commerce relied on product innovation and AI tools to strengthen overseas competitiveness; and the beauty care industry entered a new stage with technological breakthroughs and omni-channel integration.

Orient Securities's main views are as follows:

The opening year of the 15th Five-Year Plan is approaching. The retail industry is an important focus for boosting domestic demand. Channel regulation and emotional values are on the rise

1) The Central Economic Work Conference set the tone 15 to adhere to domestic demand dominance, and the importance of the retail industry has been raised again. Combined with the 2026 Super Long Spring Festival to drive peak season consumption, Q1 is expected to usher in a “good start” for leading retail companies in the region. 2) After initial exploration in 2024-25, retail enterprises have accelerated the pace of regulation, and the operating results have already been reflected. Subsequent reform ideas continue to advance around remuneration mechanisms, supply chains, and scenarios (i.e. people, goods, markets). 3) The discount industry and emotional consumption are on the rise, and the concentration of jewelry retail and maternal and child retail continues to increase.

The sea view is still high, and the supply side of cross-border e-commerce has improved, and product strength has broken through

1) In 2025, foreign trade is still “emboldened, energetic, and aggressive”, and there is still room to double the penetration rate of cross-border e-commerce. Although the cost-performance/cost ratio logic still exists, leading companies are expected to take the lead at an accelerated pace by relying on product innovation and strengthening brand potential. 2) Looking ahead to 2026, the profit margins of most enterprises are expected to recover in the context of falling tariff costs; tax inspections will promote the development of industry compliance, and supply-side optimization will drive increased concentration. 3) US Black Friday revealed the rise of AI traffic distribution logic, and cross-border B2B companies are expected to further increase revenue by digging deeper into AI tool innovation.

The diversified narrative of beauty care brands, channels, and technology is being strengthened

1) The scissor gap between the revenue growth rate of the A-share beauty protection sector and the growth rate of net profit to mother has further improved. Although gross margin continues to rise, the gross sales gap has declined slightly, and industry development is entering a new stage. 2) With the rise of technologies such as plant extraction and biological fermentation, the raw material as a cosmetic “chip” has become a driving force for various companies. It is worth looking forward to the innovation and application of more ingredients such as PDRN/ECM in 2026. 3) In the context of increasing online delivery costs, omni-channel integration may be more critical.

Investment suggestions: Chongqing Department Store, Mingchuang Premium, Oriental Selection, Kids King; Outbound retail-related targets; Small Commodity Stores, Focus Technology, Anke Innovation, Greenlink Technology, Sumeda; Shangmei Shares, Mao Geping, Perilla, Ruochen, Beautiful Pastoral Healthcare; AI+ related targets Connet Optics and Ascend.

Risk warning: Increased industry competition, repeated trade frictions, new product innovation falling short of expectations, and changes in assumptions affect calculation results.