Sharing economy meets digital innovation in China’s beauty industry | Daxue Consulting

Beauty booths in China: Fast- beauty dream or reality?

From telephone booth to photo booth, lending a private space with a shared product or service is not a new business model. However, a unique cubicle has recently come into sight – the beauty booth in China. The pod with the size of a walk-in closet is equipped with all necessary cosmetic products and makeup tools, as well as styling appliances like hair straighteners.

According to Han Shuqi, the founder and CEO of the start-up Seventeen Beauty or 17Beauty, beauty booths target young urban women who are appearance-conscious and lead busy lives. The shareable yet private area gives them a place to freshen up between stops. Furthermore, beauty booth in China also intends to meet the need of makeup-lovers who are willing to try out various cosmetic products. In addition to popular makeup items from international beauty brands, 17Beauty also offers consumers with products from less-known brands to test.

beauty box
[Source: Wechat post “17Beauty booth”]

Digital innovation in China’s beauty industry: 17Beauty

In summer 2018, 17Beauty launched its first beauty booth in Beijing. Till now the company operates about 50 such booths in different cities around the country including Beijing, Shanghai, Wuhan, and Guangzhou. Another 300 beauty boxes are planned to be set up in these cities in 2019. These cubicles are located in shopping centers, office buildings and public transition hubs such as airports.

Consumers have to scan a QR code with a mobile app to access. Similar to unmanned convenience stores, the makeup booth has a crime prevention system. The usage fee is between 28 CNY (4 USD) for 15 minutes and 58 CNY (8.6 USD) for 45 minutes. The lights in the booth are adjustable; consumers can choose a suitable setting for themselves depending on where they are heading. Through a facial recognition system, users can also receive personalized makeup recommendations. Some products in the beauty booth can be purchased by scanning the QR codes. Such innovative technologies in the beauty market promise a new stage in the development of the beauty industry in China.

the beauty industry in China
[Source: Wechat post “Inside of a 17Beauty booth”]

17Beauty’s omnichannel strategy in China’s beauty industry

Several months back, Han said in an interview that each beauty booth costs a bit over 20K CNY (3000 US$) and they have managed to break even. Han further revealed that their income not only comes from consumers’ usage fees and advertisement inside of the booth, but also from collaboration with beauty brands. The company intends to create another offline channel for beauty brands to reach Chinese consumers. Especially for brands still less-known in the Chinese beauty market, it could be a good chance for them to emerge in the Chinese market.

For the long-term future, 17Beauty intends to become China’s beauty brand incubator with a similar business model as Seed Beauty, the company behind many successful cosmetic brands.  After achieving a dense coverage across the country, 17Beauty will be able to extract the interest and preference of Chinese beauty consumers from the data they collect. The long term goal is to create buzzy brands at a very fast pace based on the latest feedback from consumers.

China’s beauty industry
[Source: Wechat post “Beauty products presented in a 17Beauty booth”]

Will beauty booths become the next big thing in the Chinese sharing economy?

Beauty booth in China as a part of sharing economy

In recent years, the sharing economy has taken off in China. In addition to the bicycle sharing system, shared portable chargers and one-person-karaoke booths have also earned a place in Chinese consumers’ life. However, considering the uncivilized use of other shared products, people in China have voiced some reservations. In particular, when it comes to personal items such as makeup, Chinese consumers are suspecting the practicality of beauty booth due to hygiene issues. To prevent the potential health risks, 17Beauty has taken several corresponding measures, e.g., providing users with disposable hygiene products; using pump bottles for liquid products; fixing products like lipsticks onto the table to avoid direct use. However, consumers are still worried that these measures are not enough to keep makeup nice and sanitary from misuses.

beauty booth in China
[Source: Wechat post “Disposable beauty tools in 17Beauty booth”]

Booth-renting industry in China

The booth-renting industry is certainly on its way up in China. The most popular one is the one-person karaoke booths planted in many shopping centers and facilities. There are also sleeping pods designed for taking a quick nap. In China’s big cities, people are constantly on the go, and the demand for convenient and smart solutions is high. However, it still needs time for us to see whether the beauty booth model in China will succeed.

Author: Chencen Zhu

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