Analysis of the Reasons Why Huawutang's Return Rate on Douyin Exceeds the Industry Average

Based on the collected data, I will systematically analyze the reasons why Huawutang (Half Acre Flower Field)'s return rate on Douyin exceeds the industry average from multiple dimensions.

According to industry research data, the average return rate of live e-commerce is between

, a ratio significantly higher than the 10%-15% of traditional e-commerce[1][2]. As one of the core categories in live e-commerce, the beauty and personal care category has a relatively high return rate in the industry.

Huawutang (Half Acre Flower Field)'s revenue structure is highly dependent on online channels:

• Online channel revenue accounted for
  85.7%
  of total revenue in 2023
• Online channel revenue accounted for
  75.9%
  of total revenue in 2024
• Online channel revenue accounted for
  76.3%
  of total revenue in the first nine months of 2025[3][4]

Douyin, as one of its core online channels, undertakes a considerable proportion of sales tasks. This online-heavy channel layout makes the company highly sensitive to the operational effectiveness of the Douyin platform.

• The real-time interactivity of live streams, emotional guidance from hosts, and marketing phrases such as “limited-time discounts” and “stock shortage” continuously stimulate consumers’ emotional nerves
• Consumers’ decision-making process shifts from rational evaluation to an intuition-driven fast thinking mode, leading to increased post-purchase regret[5]

• Consumer behaviors such as “place an order to try first before deciding whether to keep it” and “order multiple items of the same style and then select the best one” are prevalent
• Instead of placing orders cautiously out of fear of return hassles, consumers now treat returns as a “post-purchase screening step” in their buying decisions[5]

• Multi-camera lighting, filter overlays, real-time fill light, and post-color grading in live streams together amplify color saturation and glossiness
• Significant color differences occur for products on different terminals and in different viewing environments, and hosts’ phrases such as “zero color difference” and “what you see is what you get” lead to systematic descriptive deviations[5]

• In September 2020, Half Acre Flower Field’s Seaweed Hydrating Glow Mask was detected to have
  1.8 times the limit of methylisothiazolinone
  [6]
• As of now, there are a total of
  269 complaints
  involving Half Acre Flower Field on the Black Cat Complaint Platform, mainly pointing to product quality and after-sales service issues
• Consumers have reported issues such as hair loss after using shampoo and foreign objects in body scrubs[6]

• Pricing strategies such as “limited-time special offers” and “exclusive discounts” in live stream scenarios are not fully stable
• Price drops within a short period after the end of live streams, and actual selling prices being lower after stacking coupons, are prevalent
• Real-time reminders from third-party price comparison tools cause consumers to have a psychological gap of “overpaying”[5]

• The “refund only” mechanism launched by the platform simplifies the after-sales process
• Services such as “door-to-door pickup” provided by courier companies reduce the time and economic costs of returns[5]

• In the first nine months of 2025, marketing and promotion expenses reached
  RMB 833 million
  , with a significant year-on-year increase[3]
• In 2019, the number of KOLs collaborated with in a single month reached
  40-50
  ; despite the substantial marketing investment, the conversion effectiveness is inflated[6]

• The brand is positioned as “natural skincare”, but R&D investment is relatively insufficient, resulting in product quality where “the external standard is higher than the internal standard”[6]
• Hosts go to great lengths to showcase the positive aspects of products to drive sales, raising consumers’ psychological expectations, but consumers find that the actual products do not meet those expectations after receiving them[7]

• The effects of cosmetics and skincare products can only be verified through actual use, leading to a high probability of not meeting expectations
• Differences in individual skin types lead to frequent occurrences of “one person’s honey is another person’s poison”
• Subjective perceptions such as scent, texture, and skin feel are difficult to fully convey through live streams[1][2]

• Cost Pressure
  : Each return order incurs direct losses such as advertising fees, packaging materials, and courier fees
• Brand Reputation
  : Exposure of product quality issues affects consumer trust
• Profitability
  : High return rates directly erode profit margins

Improvement Direction	Specific Measures
Product Quality	Strengthen the construction of quality control systems and improve product qualification rates
Authentic Promotion	Avoid overly beautified product displays and establish realistic product expectations
Supply Chain Management	Ensure batch consistency and reduce differences in materials and specifications
Consumer Education	Provide more detailed product information and usage guidance
Return and Exchange Optimization	Establish an efficient after-sales service system to improve consumer satisfaction

Huawutang’s return rate on Douyin exceeding the industry average is the result of the combined effect of multiple factors. From the external environment perspective, the overall return rate of live e-commerce is generally high, with the beauty and personal care category being particularly prominent; from the internal factor perspective, issues such as the brand’s excessive reliance on marketing-driven growth, insufficient product quality stability, and gaps between product display and actual experience are the core cruxes.

For Huawutang, which is pursuing a Hong Kong IPO, how to balance marketing exposure and product quality to establish a sustainable growth model will be a key issue it faces.

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[1] Sina Finance - The Puzzle of China’s E-Commerce GMV: Who Are the Real Top Three in the Industry (https://finance.sina.com.cn/stock/relnews/hk/2025-03-27/doc-inerapwq0719286.shtml)

[2] Xinhua Net - Live Streaming E-Commerce Consumer Rights Protection Public Opinion Analysis Report (2023) (http://www.sun-c.cn/rdgz/202403/t20240314_21933.html)

[3] Eastmoney - Shandong “Mom-and-Pop Shop” Pursues Listing on Hong Kong Stock Exchange, Generates Over RMB 1.8 Billion in Revenue from Selling Hair and Body Care Products in 9 Months (https://finance.eastmoney.com/a/202601173622497369.html)

[4] Sohu - Huawutang, the Parent Company of Half Acre Flower Field, Pursues Hong Kong IPO, with Nearly 80% of Revenue Coming from Online Channels (https://www.sohu.com/a/977099121_100053070)

[5] Hans Publishers - Causes of the “Excessively High Return Rate” Issue in Live E-Commerce and Platform Response Mechanisms (https://pdf.hanspub.org/ecl_2316385.pdf)

[6] Sina Finance - Half Acre Flower Field’s Parent Company Completes Share Reform and May Pursue IPO; It Was Once Put on a Blacklist for Excessive Preservative Concentration (https://finance.sina.com.cn/tech/roll/2025-12-29/doc-inhemqav0358290.shtml)

[7] Caijing.com - E-Commerce “Peaked”, Retail Restructures (http://m.caijing.com.cn/article/202511/386338)