On 9 month 15 day, Australian skincare brand Lanolips (Lan Nuo Li Pu) officially closed its Xiaohongshu store. Without a clearance sale, a "farewell letter to Chinese consumers" announced the suspension of its official operations in mainland China.
This star brand, which once set a record of "selling one tube every 30 seconds" and was rated by The Times of the UK as the "World's Best Lip Balm," is thriving in 25 countries worldwide, but has pressed the pause button in the Chinese market.
Lanolips was founded by Kirsten Carriol in 2009, with its core being high-purity lanolin from childhood memories of a South Australian farm. Its flagship product, 101 Ointment multi-purpose balm and lip balm, has a unit price of about 10-20 US dollars, and the product line has always revolved around lip and all-purpose balms.
When it received investment from Point King Capital in 2022, Lanolips had annual sales of about 1000 ten thousand US dollars, with products covering about 25 sales points in 3000 countries worldwide. In addition, the brand has won over one hundred beauty awards, and its 101 Ointment was rated by The Times as the "World's Best Lip Balm," with celebrities such as Gigi Hadid and Margot Robbie mentioning their user experience in interviews multiple times.
But its overseas growth has a distinctive feature: strong channels, weak self-operation. The brand mainly relies on the shelves of retailers such as Sephora, Boots, and Harrods, converting through word of mouth naturally, rather than buying traffic, creating content, and accumulating users itself.
Lanolips' journey in China is a six-year, circuitous exploration composed of two attempts. Each time it tried to knock on the door of the Chinese market in a different way, and each time it withdrew dejectedly for different reasons. Reviewing these two attempts is key to understanding the final closure.
First Attempt: Entering China via MECCA, "Hitching a Ride" (2020-2023)
Lanolips first entered the view of mainland Chinese consumers not under its own name.
In 2020 month 8, Australia's largest beauty retailer MECCA partnered with Tmall Global to officially launch its Tmall overseas flagship store. Lanolips, as one of its core Australian partner brands, was introduced along with Frank Body, Go-To, and others. This was Lanolips' first entry into China, not in the form of a brand flagship store, but as a SKU on the shelves of a channel retailer.
MECCA founder Jo Horgan was full of expectations for the Chinese market at the time, but the reality of business logic was extremely harsh: in a collection store containing 22 brands and over 200 products, a niche lip balm brand found it difficult to obtain sufficient traffic priority and exposure resources. Lacking an independent flagship store and a dedicated marketing budget, Lanolips was destined to be only a supporting role in MECCA's traffic pool. Although MECCA's Tmall store accumulated over 13 ten thousand followers in three years, Lanolips' specific sales performance in this channel was never publicly disclosed.
In 2023 month 11, MECCA announced the cessation of operations of its Tmall overseas flagship store. This meant that Lanolips' first and only official sales channel in China at the time was completely closed.
It is worth noting that MECCA's exit was not an isolated case. At the time, some media pointed out sharply: domestic beauty brands have erupted with strong power, Proya has topped the list, and foreign brands are losing the import dividend period. As a brand on MECCA's shelves, Lanolips' fate was deeply tied to the channel's strategic choices from the beginning. Once MECCA withdrew, the weak awareness Lanolips had accumulated in the Chinese market instantly returned to zero.
Second Attempt: Self-built Entity, Direct Operation on Xiaohongshu (2024-2026)
MECCA's closure did not mean Lanolips gave up on the Chinese market. On the contrary, the brand made a more strategically significant decision in 2024.
On 2024 month 12 day 27, Lan Nuo Li Pu (Shanghai) Cosmetics Co., Ltd. was registered and established in Fengxian District, Shanghai, with the legal representative being founder KIRSTEN LESLIE CARRIOL, wholly owned by Lanolips Pty Ltd. Unlike the first "hitching a ride" with MECCA, this time the brand had its own Chinese operating entity, independent e-commerce channel, and clear brand-building intentions.
Founder Kirsten Carriol made a bold statement in an interview in 2024 month 8: "Lanolips will vigorously enter the Chinese market in the next two years... I understand that China is a hard market." She also revealed that the brand received equity investment from Australian private equity fund Point King Capital in 2022, "Previously we were self-funded, now the wallet has been loosened, and we expect the company's growth rate to increase exponentially."
▍Lanolips founder Kirsten Carriol
With capital support, Lanolips' second entry into China chose the heavy model of self-built entity and independent operation. The Xiaohongshu store became its core position for brand image building and content seeding, while Douyin assumed another distribution function—Chanmama data shows that Lanolips is associated with 1 small stores, 2 SPUs, and 2 live broadcasts on Douyin, but its industry ranking in the past 30 days is only 6506th, with negligible volume.
In addition, outside official channels, cross-border platforms such as LookFantastic have always existed as unofficial cross-border pathways, with product unit prices of about 60-100 yuan RMB. These scattered channel layouts constitute all of Lanolips' touchpoints in the Chinese market.
However, from registering the subsidiary in 2024 month 12, to the closure of the Xiaohongshu store in 2026 month 9, this period of official operation was less than two years. For a new brand that needs to build brand awareness from scratch, this time window is extremely short.
The wording in the announcement, "after careful consideration" and "had no choice but to make the following difficult decision," hints at the substantial collapse of this "cross-border direct operation" in its financial model.
▍Image source: Lanolips social media account
It is worth noting that the wording of the announcement is "temporary farewell" rather than "farewell." The brand clearly stated in the letter that it is "suspending current official operations in mainland China," emphasized that it "continues normal operations in Australia and other international markets," and left a signal that "we will return in the future."
This indicates that Lanolips' closure of the Xiaohongshu store this time is closer to a strategic stop-loss: closing the heavy-asset operation that directly faces consumers, rather than the complete end of the brand in China.
Observing the two attempts side by side, one can find a structural contradiction that runs throughout: Lanolips has never established independent, sustainable brand equity in the Chinese market.
In the first attempt, the brand was completely dependent on MECCA's channel system. In a multi-brand store containing 22 brands and over 200 products, Lanolips had neither an independent brand flagship store nor dedicated marketing budget and operations team. After MECCA exited, brand awareness was almost zero.
In the second attempt, although the brand built its own physical and channel presence, the competitive environment it faced had fundamentally changed. In 2025, domestic beauty market share reached 57.37%, and in the first half of 2026, the growth rate of domestic brands was 6.5 times that of foreign brands. At the same time, online customer acquisition costs have risen sharply over the past three years, and for small and medium-sized brands, customer acquisition costs have approached or even exceeded the average order value.
For a cross-border niche brand that needs to build brand awareness from scratch, self-built channels mean bearing all traffic acquisition costs alone. Its product line is dominated by low-unit-price items such as lip balm and hand cream, with an average order value of only 50-100 yuan. This is a financial dead end: selling a lip balm worth a few dozen yuan is not even enough to pay for a single seeding campaign by a Xiaohongshu influencer. The structural contradiction between traffic costs and average order value makes the "self-built channels + paid traffic" model extremely difficult to sustain.
The deeper problem is that Lanolips has never been able to complete the leap from "a product" to "a brand" in the Chinese market.
▍Lanolips product matrix (partial)
Overseas, it has accumulated brand equity through media endorsements as the "world's best lip balm" and spontaneous celebrity recommendations. But in China, the traffic distribution mechanisms of Xiaohongshu and Douyin dictate that without sustained content investment and an influencer matrix, it is difficult for a brand to gain sufficient exposure. Lanolips has long focused on lip balm as its core product, lacking a high-unit-price product matrix such as creams and serums to support continuous content creation, user repurchase, and profit absorption. In the fiercely competitive Chinese beauty market, relying on a single product is equivalent to running naked.
Two attempts, two models, but neither answered the same core question: does a "small but beautiful" brand with annual sales of about 1000 ten thousand US dollars and a single category at its core need, and can it afford, the full cost of building an independent brand from scratch in the Chinese market? Lanolips' answer is clearly no.
Lanolips is not the first cross-border niche brand to press the pause button in the Chinese market, nor will it be the last.
As shown in the chart compiled by YAN BEAUTY REVIEW, this wave of foreign beauty brand retreats shows a clear gradient differentiation. At one end, brands such as Filorga, Mamonde, and IT Cosmetics have experienced substantial exit or withdrawal from China, with official channels essentially cleared to zero; at the other end, brands such as ReFa and DUO have dissolved their Chinese sales subsidiaries, retreated from local entities, and shifted to lighter cross-border cooperation models; while more brands, such as KATE, Albion, and ADDICTION TOKYO, have chosen channel contraction, closing some flagship stores but retaining other channels.
Lanolips' "temporary farewell" lies precisely between channel contraction and phased store closures. It has not completely exited, but has shut down its heavy-asset direct-to-consumer operations (Xiaohongshu direct sales), retaining the possibility of returning in a lighter way in the future. This is the standard move for foreign small and medium-sized brands in the Chinese market today: no longer blindly expanding, but tilting resources toward core channels, and withdrawing from ventures that do not make financial sense.
But this does not mean Lanolips should not have come.
Obtaining financing in 2022 and deciding to build its own China team in 2024 were each reasonable business decisions at the time. The problem is that the intensity of competition in the Chinese market has undergone a qualitative change over the past three years, with domestic market share exceeding 57%, marketing expense ratios generally exceeding 60%, and traffic costs approaching or even exceeding average order value. The speed of these changes has exceeded the adaptability of all "small but beautiful" brands.
Lanolips' exit has fully demonstrated the dilemma of one model: overseas relies on shelves, China relies on traffic, and the gap between the two logics cannot be bridged by passion and a minority equity investment alone.
Two attempts, the first relying on channel partners, the second building its own channels, neither direction was wrong. What was wrong was the mismatch between timing and resources: a brand with annual sales of 1000 ten thousand US dollars and a single low-unit-price category at its core has neither enough capital to fight a protracted war nor enough brand depth for consumers to actively seek it out.
This is also a clear industry signal: the survival window for cross-border niche brands in the Chinese market is narrowing. Those that can remain either have a high enough average order value to support traffic costs, strong enough efficacy barriers to support content dissemination, or a deep enough localization team to support refined operations. Brands in the "middle ground" that lack all three are being systematically squeezed out of the game.
Whether the statement in the announcement, "We will come back in the future," can be fulfilled depends on whether Lanolips is willing and able to find a more suitable way to enter China. Lighter cross-border distribution, or heavier localization, rather than continuing to be stuck between the two models.
The Chinese beauty market has passed the stage where one could simply bring any overseas brand to pan for gold. Its "farewell letter" is written to its own consumers, and also to all cross-border brands still watching the Chinese market: there are no shortcuts here, only clarity about what kind of battle you want to fight.