Ask AI · How Can ALDI Beauty Become the Supermarket’s Profit Engine?

Text | Zhang Hangying

In Shanghai’s Wujiaochang, the bustling Hecheng shopping district is lively and crowded. Jia Jia is an “office worker” at an internet company nearby. On weekdays’ weekend afternoons, she usually goes to check out ALDI (ALDI) on another floor after trying sports gear at Decathlon.

From baked goods, daily necessities, to fresh fruits and vegetables, more and more ALDI beauty products have been showing up in her shopping basket—starting from a lip balm at 5.9 yuan per tube, to a 14.9 yuan cream. They gradually take over the vanity on her dresser.

“Back then, I hesitated a lot when I saw the prices, but after I looked at the ingredients, I bought it with the attitude of trying it. At first I just applied it to my hands, and later I started using it on my body. I found it surprisingly moisturizing, so I began to repurchase.” Jia Jia tells me, “Now I just hope it won’t be discontinued.”

In these two years, international big brands have started a battle to protect their profits, and domestic cosmetics brands are also transitioning for growth. ALDI beauty has emerged as an outstanding “new Shanghai specialty.” The “Caviar” series launched last year even became a “scarce item,” rolling out an allocation system of “limit 3 per person.” Even so, many stores still frequently run out of stock.

Before it, “caviar” was a luxury symbol in skincare. La Prairie’s classic blue bottle—“Caviar Essence Luxe Cream,” an entry-level product priced in the thousands of yuan—its high-end version is so close to the five-figure range. ALDI copied around 70–80% of the visual language and ingredient concept at less than one-fifth of the price.

The site visit by 天下网商 to an ALDI store in Pudong, Shanghai: as you enter through the side entrance, a half-wall covered with blue-and-white packaging displays the store’s own beauty line, “Lacura.” Many shelves are already missing products. A staff member said that the “caviar” series “comes in a batch and sells it batch by batch; restocking can’t keep up.” A customer who is shopping puts three hand creams into her cart: “At this price of 9.9 yuan, it doesn’t feel painful to use. I’ll get a few for my mom.” After finishing checkout, she buys more than ten items—face oils, creams, toothpaste, lip balms, and more—for a total of just over 100 yuan, creating a breath of “supermarket freedom” in Shanghai, where prices feel refined.

A seemingly paradoxical phenomenon is this: this German discount store, known for hard discounts, has turned beauty into a money-making business. What’s truly worth asking isn’t “why do people buy,” but—why is ALDI able to sell it like this?

Sam’s has Member’s Mark, Hema has “Hema,” and Costco’s supply-chain capabilities are second to none. They also have scale advantages and contract-manufacturing resources, and they’ve done plenty of categories under private labels—but they haven’t created “beauty big-brand alternatives” at the mass-market level. How did ALDI manage it?

“Bargain-price” beauty at ALDI: not a traffic driver, but a profit product

The public impression of ALDI is “an affordable supermarket”—attracting nearby residents with low-priced fresh produce, and compressing costs with a hard-discount model. That impression only sees half the story.

In ALDI’s category structure, fresh food and beauty play completely different roles.

Fresh food is responsible for “bringing in traffic.” Its task is to lock in everyday customer flow within a 3-kilometer radius, building user stickiness through high-frequency necessities. But fresh produce has high spoilage and thin gross margins; the industry’s typical gross margin rate is between 5% and 15%. This part of the business is about scale.

What truly supports ALDI’s profitability backbone is 3R—ready to cook, hot, and ready to eat—and beauty and personal care.

This isn’t the first time ALDI has drawn attention in the beauty world. In winter 2024, a 9.9 yuan Lacura hand cream went viral thanks to ingredient similarities to L’Occitane’s shea-butter products; its price is one-twentieth of the latter.

According to calculations by 东吴证券 and 《化妆品观察》, ALDI’s beauty category occupies less than 5% of the store’s display area, yet contributes 15%–25% of the store’s gross profit. Lacura’s main beauty products have a gross margin that stays stable at 25%–35%, which is 2–3 times that of fresh produce.

Even more critical is turnover efficiency. ALDI’s beauty segment turns over in 10–15 days, with 24–36 annual turnover cycles. That means with the same amount of capital, ALDI can roll through two to three cycles a year.

The logic behind ALDI selling beauty has also been validated in another retail giant—MUJI.

Many people go to MUJI to buy stationery or storage boxes, but MUJI’s most profitable single product for years has been that minimalist packaged moisturizing toner and the compact eyelash curler. Among almost all consumables, skincare is the category with the highest markup, the most stable repurchase rates, and the easiest way to build “price-premium via trust.”

Swap low-margin fresh produce for traffic, and cash in profit with mid-to-high-margin beauty. The first is the entrance, and the second is the exit. Together they form a closed loop, creating ALDI’s profit structure that differs from traditional supermarkets: “high frequency, high margin,” allowing ALDI to achieve 2B yuan in revenue in China in one year (CCFA 2024 data from the China Chain Store & Franchise Association).

As of this March, ALDI has more than 100 stores in China, with Shanghai accounting for about 70%. According to data from 晚点, in 2026 ALDI’s Shanghai stores generally surpassed 4 million yuan in monthly sales.

Why doesn’t Sam’s do it?

Since this model has proven effective, why haven’t other supermarkets like Sam’s followed suit?

The answer isn’t that their supply chain capabilities are insufficient—it’s that their business models fundamentally conflict with “ultra-low-priced beauty.”

Sam’s bottleneck is membership fees.

Sam’s and Costco’s core profit engine is not the difference in prices on goods, but the annual membership fee that starts at 260 yuan. Costco even internally stipulates that the gross margin rate on most goods must not exceed 14%. That figure isn’t arbitrary; it is the core discipline of a membership-based supermarket. Commodity gross margins have to be kept low so consumers feel that “the membership fee is worth it.”

Under this model, the positioning of the beauty segment is “high-end endorsement.” Brands like Estée Lauder, Lancôme, and La Mer are introduced, and they are sold at prices lower than department stores—meant to strengthen the mental association of “member privileges.” If low-priced private-label beauty were inserted into this scenario, it would not only clash with high-end curated selections, but could also trigger resistance and questioning from core members.

Therefore, Sam’s private brand in personal care is limited to low-risk categories like hand creams and makeup cotton pads, and it has never entered the core area.

Hema Fresh’s difference lies in operating costs.

Hema positions itself as high-end fresh food plus instant retail. Most stores are located in prime commercial districts, and operations stack modules such as cold-chain logistics, 30-minute delivery, and in-store dining—making operating costs higher than ALDI’s. In addition, Hema’s beauty segment is mainly distributed through agency and joint operations, with pricing power held by the brand side. Even since last year, when it started trialing its own beauty and personal care brand JUWOW, it also follows a “natural ingredients, mid-to-high-end” route. For example, for hand cream, 50g JUWOW costs 28.9 yuan. For Hema, private-label beauty is more of an extension of supply-chain capability and a supplement to consumer scenarios, rather than a core pillar of the profit structure.

ALDI does neither a membership system nor a promise of 30-minute delivery. Store locations are mainly in residential communities, the interior design is extremely minimalist, and staffing is lean. This “hard-discount” foundation allows it to withstand a lower starting gross margin rate, and also gives it room to turn beauty into an independent profit business.

Using “industrial efficiency,” turning cosmetics into “daily necessities”

If Sam’s sells “authenticity endorsement,” and Hema Fresh sells “middle-class services,” then ALDI sells “industrial efficiency.”

This efficiency comes from three levels:

First, the bargaining power brought by global scale. According to publicly available information, ALDI has more than 10k stores worldwide. In China, it has broken through 100 stores, and the share of private brands exceeds 90%. In China, its manufacturers include leading domestic cosmetics contract manufacturers such as Shanghai Coloris and Guangzhou Shifei, allowing it to buy inventory at industry-low prices.

Second, minimalist marketing costs. Lacura doesn’t hire spokespersons, doesn’t enter department-store counters, and doesn’t set up in-store beauty guides—saving the high marketing expenses that are customary in the beauty industry. How it went viral relied almost entirely on word-of-mouth amplification through social platforms.

Third, extreme turnover capability. A 10–15 day beauty inventory turnover cycle means low capital occupation costs, and also enables ALDI to respond quickly to market hotspots—from L’Occitane hand cream alternatives to caviar face creams—making product iteration faster than traditional brands.

Therefore, even though Lacura’s products are priced at only 5%–10% of big brands, they can still maintain a 25%–35% gross margin rate.

“ALDI’s skincare is cheap, but that uniform—almost a bit rigid—self-operated packaging actually gives me a sense of trust.” Jia Jia tells 天下网商. She knows that in the ingredient list of the face cream, the caviar extract is listed last, and before it are water, glycerin, and propanediol. But for the basic needs of moisturizing, that’s enough. “At 14.9 yuan, what more would you want?”

Not chasing breakthrough performance, not promising anti-aging miracles—only providing basic moisturization and the psychological cue of “same lineup as high-end beauty.” With this extreme “industrial efficiency,” ALDI turns beauty into a basic “daily necessity” product.

But this model also has clear boundaries. During its store visits, 天下网商 also noticed that on ALDI’s beauty shelves, all items are categories like hand creams, face creams, body wash, and basic serums—no fragrance, no color cosmetics, and no high-end anti-aging products.

ALDI can only do categories like the former—relatively simple in function and transparent in ingredients—but fragrances, color cosmetics, and high-end anti-aging products involve unique ingredient patents, complex fragrance blending processes, and hard-to-replicate emotional value. All of these are outside ALDI’s capability range.

Premium returning to premium, common sense returning to common sense

天下网商 previously interviewed Peng Xiaowei, founder of Angel Bay, a veteran retail researcher. Due to his advocacy of the ALDI model, he even changed his name to “Adi ALDI.” He believes that while China’s e-commerce is already very strong, offline retail still needs to be touched, felt, and experienced; overall, To C retail is still relatively weak. For brick-and-mortar supermarkets, one solution is Costco, another is Pangdonglai, and another is ALDI.

When ALDI’s 14.9 yuan caviar face cream and a 10,000 yuan “luxury beauty” product are placed in the same context, there really is a kind of contradictory tension.

But the two never serve the same group of consumers. The former solves “basic moisturization + psychological satisfaction,” while the latter solves “anti-aging performance + identity recognition.”

La Prairie, the international ultra-luxury brand that ALDI has “replaced,” has seen declining performance in recent years. In fiscal year 2025, its sales fell 4.5% year over year and has been under pressure for three consecutive years. Although global performance is not good, according to a corporate announcement by Byar Sdoff Group, La Prairie’s sales in China in the second quarter of 2025 increased by 3%. Online organic sales rose 36%, while the full year maintained an upward-but-volatile trend.

At the same time, Estée Lauder managed to turn losses into profits thanks to stable performance in ultra-luxury lines like La Mer. This is enough to show that the market for top-tier luxury skincare still exists, and consumers are still willing to pay for genuine brand momentum and technological barriers.

What ALDI may truly have rewritten is the pricing logic of mass-market beauty.

When a bottle of cream’s “reasonable price” is anchored at 14.9 yuan, all brands in the middle tier are forced to answer a question again: is your premium really worth it?

Premium returning to premium, common sense returning to common sense. Perhaps ALDI has only used industrial efficiency to break out into a kind of value-for-money niche—and then returned that “common sense” portion back to consumers.