Xinhua Finance, Shanghai, September 15 (Reporters Hu Jiefei and Ding Yawen) As the "face value economy" has become a new trend, Chinese local beauty brands have gradually emerged and entered the "fast lane" of development. However, in terms of price competitiveness, brand influence and market share, the top international brands still occupy an absolute dominant position. The industry believes that the development gap between the two is not only due to the industrial foundation and brand thickness, but also the gap in available raw materials. If local brands want to "overtake on corners", they urgently need to seek breakthroughs in this "stuck neck" field. .
"Economy of beauty" spawns market opportunities, local beauty "highlight moment" is too short
is booming in the "Z era" consumer groups and new retail With the coming wave of consumption structure upgrades, in recent years, the "sense of existence" of China's local beauty brand industry has been on the rise.
Since 2018, Huaxizi, Mary Daijia , Ju Duo, Mao Geping and other cutting-edge brands have been born, making domestic brands once become the bright "darlings" of the capital market. At the end of 2020, the listing of Perfect Diary's parent company Yixian E-commerce, the listing of Winona's parent company Yunnan Betteni in March this year, and the "first share of beauty makeup" Proya share price all the way The climb is all proof.
2021 7th Tmall Golden Makeup Awards live data also shows that 40% of the makeup tables of the "post-95" are domestic products.
However, the rise is very rapid, and the "fall" comes very quickly.
Yixian e-commerce, which has been on the market since its establishment 5 years ago, was once a leader in domestic products. However, the company's 2021 semi-annual report shows that the company's net loss in the second quarter of this year reached 390 million yuan. On September 14th (Eastern Time), the closing price of e-commerce was only US$4.57, down by more than 75% from US$18.4 on the first day of listing. Its current market value is less than US$2.9 billion, which is a sharp drop from the US$4 billion valuation of 's primary market before listing.
is not just a perfect diary. In recent years, many local brands that rely on marketing "explosion" have shown a slight lack of stamina. According to the research report of Cinda Securities in July this year, Huaxizi's market share was 3.42% in June 2020, and one year later, the market share was only 2.28%, and the GMV growth rate was also declining.
In fact, from the perspective of market share, the gap between local beauty and first-line international brands is still not small.
According to Euromonitor data, in my country, European and American brands still dominate. The market share of , L'Oreal and Procter & Gamble has always been at the forefront of my country's cosmetics industry, accounting for around 10%.
In addition, the high-end market is dominated by top international brands. The top three are L'Oreal, Estee Lauder and Louis Vuitton, with market share of 18.4%, 14.4% and 8.8% respectively; Volkswagen In the cosmetics market, Procter & Gamble occupies 12.1% of the market share, ranking first, followed by L'Oréal, which accounts for 8.9%. Local brands Pechoin , Garan Group , Shanghai Jahwa , and Shanghai Shangmei accounted for 3.9%, 3.7%, 2.3% and 1.9% respectively.
light research and development, heavy marketing, local brands encounter raw materials "stuck neck"
where is the "fire" of poor local beauty?
Jin Jian, executive chairman of the Shanghai Daily Chemical Industry Association, said that one of the major gaps between China's local beauty and top international brands lies in the raw materials. It is reported that currently the EU can use 22620 raw materials (about 1/3 of plant origin), 58 kinds of preservatives, 31 UV absorbers, and 153 kinds of coloring agents. However, there are less than 9,000 kinds of raw materials available in my country, including 52 preservatives and UV absorbers. 27 kinds, 157 kinds of colorants.
In the cosmetic efficacy evaluation method, the European Union Cosmetic Efficacy Evaluation Guide (EEMCO) includes dozens of skin color, surface shape, elasticity, microcirculation, wrinkle and smoothness, pH, transepidermal water loss, etc. There are currently dozens of moisturizing, 15 kinds of specifications such as sun protection, the rest are in the process of being formulated.
Chen Shaojun, chairman of the China Fragrance, Fragrance and Cosmetics Industry Association, pointed out that, unlike medicine, cosmetics have their own particularities-the brand effect is particularly prominent, and the lack of rigid evaluation indicators in terms of efficacy, which gives some people who lack long-term vision and only Companies that want to make "quick money" have a certain amount of space for speculation. In addition, the overall start of China's beauty industry is relatively late, and many of them have problems focusing on marketing and neglecting R&D, resulting in insufficient stamina for corporate development.
Yixian e-commerce has long been criticized as a "traffic player". According to its disclosed financial report, its marketing expense ratio reached 72.5% in the first quarter of 2021, and the marketing expense ratio in the second quarter was 63.8%. At the same time, it increased its R&D expense ratio in the second quarter, but it was only 2.3%.
The related problems of the head enterprise are also prominent. Public data shows thatIn the first half of 2021, Proya's sales expenses increased to 807 million yuan, an increase of 76.47% year-on-year, accounting for 42.09% of operating income; the rate of R&D expenses in the same period was only 1.64%, a decrease from the same period last year.
In comparison, in recent years, the L'Oréal Group's R&D expense ratio has always been between 3.1% and 3.5%, ranking first among leading cosmetic companies.
A number of new cosmetic ingredients were born in China, and local companies have entered the stage of independent innovation
Industry insiders believe that with the new retail "express", brands do have the opportunity to quickly "out of the circle". But it still needs enough "product power" to be invincible in the lasting competition.
Chen Shaojun introduced that the gap between China and the EU in the number of raw materials that can be used in the beauty industry is mainly related to the stricter approval system that my country has implemented for a long time. However, with the implementation of the "Regulations on the Supervision and Administration of Cosmetics" (referred to as the "New Regulations"), the state clearly implements a raw material classification management system, implements registration management for new high-risk cosmetic raw materials, and implements filing management for other cosmetic raw materials. There will be gaps in the future. Will gradually shrink.
Recently, following the birth of two new raw materials "No. 001" N-acetylneuraminic acid and "No. 002" lauroyl alanine, the new cosmetic raw material β-alanyl hydroxyprolyl that has attracted much attention Diaminobutyric acid benzylamine (National Cosmetics Original No. 20210003) and Saussurea cultures (National Cosmetics No. 20210004) passed the registration of raw materials of the State Food and Drug Administration. This means that the domestic cosmetics raw material industry has entered a new stage of independent innovation.
At the same time, many companies choose to cooperate with foreign chemical giants. "Nowadays, brands are paying more and more attention to the content capabilities of upstream suppliers, and strive to find stronger data support on raw materials for their product positioning and promotion, which is the so-called function traceability." BASF Personal Care Greater China Business Director Xu Yafu said that BASF has successively cooperated with Proya, Nosbel, Shanghai Jahwa and other local Chinese beauty brands, and has also seen the enthusiasm and enthusiasm of Chinese local brands for research and development. Investment.
"The issue of raw materials is the core issue. There is an exaggerated saying in the industry that'raw materials are more expensive than gold'. We must cultivate local technology-based enterprises in China. Yuan Fei, general manager of Oriental Beauty Valley, said that, on the one hand, Oriental Beauty Valley is actively promoting cooperation between Western fine chemical companies and local downstream companies. Western active cells are combined to create products that are internationally competitive.
"In general, China's beauty industry has a relatively short history of development, and there is indeed a certain gap with foreign companies in terms of products, raw materials, marketing and management, but I believe As the Chinese market further opens up and short-sighted and speculative companies are cleared out, Chinese local companies can usher in a new period of opportunity. "Chen Shaojun said.
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