If e-commerce platforms are the arena where brands compete, then consumer preferences are the decisive factor determining victory. VNK, once ignited by top influencer Li Jiaqi, rapidly rose to fame with its affordable makeup positioning, becoming a shining star among domestic brands. Yet within just a few years, this Tmall powerhouse with millions of followers quietly exited the stage, leaving behind questions about what causes once-booming brands to decline in today's volatile e-commerce environment.
VNK's Downfall: A Case Study
VNK's closure isn't an isolated incident but rather reflects the intensified competition and accelerated brand reshuffling in China's e-commerce sector. To understand its decline, we must first examine the facts.
The Shutdown
VNK's once-thriving Tmall flagship store now stands empty. While the storefront remains, all products have been removed, including its previously popular "White Moonlight Makeup Remover." Customer service confirmed the store's permanent closure. The brand has also disappeared from Douyin, WeChat, Weibo, and Xiaohongshu, ceasing all operations across platforms.
Past Glory
In 2019, VNK skyrocketed to fame after Li Jiaqi promoted its 102# Apple Red lipstick, selling 23,000 units in just five minutes. That same year, it ranked as China's most favored domestic makeup brand. During 2020's Singles' Day festival, VNK's flagship store surpassed ¥10 million in sales. Before closing, it still boasted 2.45 million Tmall followers—a testament to its former influence.
Root Causes
VNK's collapse resulted from both external pressures and internal missteps. Externally, China's budget makeup market contracted amid fierce competition. Internally, after being acquired by Lafang Household Products, VNK became tied to its parent company's struggling performance without achieving meaningful synergies.
External Pressures: The Declining Budget Makeup Market
China's affordable cosmetics sector faces significant challenges as consumers demand more sophisticated products. Price alone no longer attracts buyers—brands must innovate to survive.
Market Data
From May 2023 to April 2024, Tmall's sub-¥100 makeup sales fell 6.5% to ¥12.794 billion, outpacing the platform's overall 1.8% cosmetics decline. This indicates particular pressure on budget segments.
Competitive Landscape
The explosion of domestic brands has overcrowded the affordable makeup space, with competitors battling across product quality, marketing, and distribution channels—squeezing individual brands' viability.
Evolving Consumer Demands
Shoppers now prioritize quality, ingredients, efficacy, and safety over low prices alone, willing to pay more for premium products that deliver tangible benefits.
Internal Failures: Post-Acquisition Struggles
Lafang's 2020 acquisition of VNK backfired, as the parent company failed to provide adequate operational support while tethering the brand to its own declining performance.
Financial Decline
VNK's 2022 first-half revenue plummeted 46.57% year-over-year to just ¥22.335 million, mirroring Lafang's 19.43% overall sales drop. Rather than becoming Lafang's growth engine, VNK became its burden.
Strategic Errors
Lafang treated VNK as just another subsidiary brand rather than investing in its unique potential, missing critical opportunities to leverage its existing market position.
Innovation Stagnation
Post-acquisition, VNK's product development slowed dramatically. Its uninspired new releases failed to meet evolving consumer expectations, causing the brand to lose its competitive edge.
Industry Trends: The "Internet Celebrity Brand" Shakeout
VNK's fate reflects a broader industry purge where only truly competitive brands survive.
Foreign Brand Exits
Q1 2024 saw nearly 10 international brands—including Benefit, The Body Shop, KIKO, and Kose—exit China due to failed localization, price wars, and aging brand images.
Domestic Brand Closures
Other fallen local brands like "Girl Kara," "Lora Code," and "Ufan Art" similarly succumbed to market pressures and product stagnation.
Product Power: The Ultimate Differentiator
In this Darwinian market, product excellence remains the ultimate competitive advantage. Failed brands typically share one fatal flaw: products that couldn't adapt.
Proya's Success Story
Domestic brand Proya exemplifies how product-focused strategies win. With 121 active patents and constant innovation, it outperformed Lancôme and L'Oréal to become Tmall's top skincare seller during 2024's 618 festival.
E-Commerce Survival Guide: Avoiding the "One-Hit Wonder" Trap
VNK's collapse offers crucial lessons for brands navigating China's cutthroat e-commerce landscape:
- Product Development: Continuous innovation to meet consumer needs
- Brand Building: Strengthening intangible brand value
- Marketing Innovation: Precision audience targeting
- Channel Optimization: Expanding sales touchpoints
- Consumer Feedback: Iterative product and service improvements
VNK's story isn't an ending but a cautionary tale. In China's rapidly evolving digital marketplace, only those relentlessly innovating will endure. For brands aspiring to e-commerce success, VNK's demise offers sobering insights worth heeding.