Produced by | Bullet Caiguan
Author | Hu Fangjie
Edited by | Egg Total
Beauty Editor | Qianqian
Data Support | Choice Data
This year's Double 11, domestic beauty and skin care brands performed strongly online. Among the top 10 sales of Tmall beauty and skin care brands, the number of domestic brands increased from 2 last year to 3, among which Huaxi Biologics , a brand under Quadi ranked 8th, Bettenni's brand Winona rose from 5th last year to 3rd, and Perchoa rose from 7th to 6th.
Based on the overall sales of Tmall beauty sector declined year-on-year, the sales of the above three domestic brands achieved year-on-year growth in .
In this round of competition, functional skin care products have become an important means for domestic beauty products to compete with foreign brands. Winona and Quady are both typical functional skin care products. As a representative company for domestic functional skin care products, the competition between Huaxi Bio and Bettani has just begun.
1, the "killer weapon" of domestic beauty products breaking through
This year's Double 11 Alibaba and JD did not announce sales for the first time, but judging from the specific category data, the performance of many categories has declined year-on-year.
According to Magic Mirror Market Intelligence Data (compiled by Oriental Fortune Choice), this year, the largest category of sales in Tmall Double 11 is still beauty and skin care. In terms of sales and sales volume, it decreased by 12.8% and 23.2% year-on-year respectively.
Although the sales of beauty and skin care categories have declined, domestic skin care brands have shown strong growth. Among them, among the top 10 list, the number of domestic brands increased from 2 to 3. Kwadi, a subsidiary of Huaxi Bio, did not enter the top 20 last year, and jumped to 8th this year, achieving sales of 780 million yuan.
Winona and Perroy not only stabilized the top 10, but also rose - this year, Winona's ranking rose from 5th to 3rd, and Perroy rose from 7th to 6th, achieving sales of 1.46 billion yuan and 1.43 billion yuan respectively, a year-on-year increase of 3.9% and 66.9%.
, which has ranked first in the past two years, has achieved sales of 2.43 billion yuan this year, a year-on-year decrease of 3.2%. Foreign brands such as Aquarium Mystery , Helena , and the latter have all fallen out of the top 10.
Tmall platform Double 11 data is just a microcosm of the rapid development of domestic beauty brands.
As of November 22, among domestic companies that include cosmetics business, Pianzihuang and Yunnan Baiyao had the highest market value, with 154.7 billion yuan and 101.4 billion yuan respectively, but both of them were mainly drugs.
The two companies with the main business of cosmetics are Betani and Huaxi Bio, with market values of 55.3 billion yuan and 52 billion yuan respectively. Without exception, both of these companies focus on functional skin care products.
It can be seen that functional skin care products have not only become the "trump card" for domestic skin care products to compete with foreign brands, but also become a high market value for domestic skin care products companies.
"Functional skin care products are the best entrance for competition between domestic brands and overseas brands. If the economy is better and the growth rate of the entire industry is faster, you may have some opportunities to directly do high-end. But at this stage, it is an era that pursues cost-effectiveness, focusing on specific functional demands, which is the most important entry point we think." Wang Weina, head of Huachuang Securities' group and chief analyst, told "Bullet Finance View".
2, Growth and Competition
According to "Bullet Finance View", there is currently no "functional skin care" concept in the cosmetics field. According to the research report of Tianfeng Securities , dermatological skin care products, functional skin care products and medical beauty "mechanical font" skin care products are included in this track.
Dermatological skin care products are closer to the "pharmaceutical cosmetics" concept recognized by the public, emphasizing the safety and efficacy of the product, and are suitable for skin care such as sensitive problems. Yuze, a subsidiary of Shanghai Jahhua and Winona, a subsidiary of Betelni, both belong to this category.
Efficacy skin care products are endorsed by professional research results , and single products are developed based on the principle of optimal formula. Common dropper bottles and secondary packaging are common, and Runbaiyan , Quadi, etc., under Huaxi Biotech, belong to this category.
In addition, there are medical beauty "mechanical font size" products, such as Kefumei and Fuerjia.
Huaxi Bio and Bettani have developed into the largest functional skin care products companies in China, but their development quality and path are different.
Huaxi Bio started with hyaluronic acid raw materials, and its functional skin care business developed rapidly, before and after the A-share was listed in 2019.
According to the prospectus and financial report data, in 2016, Huaxi Bio's functional skin care products revenue accounted for 8.79%; after its listing in 2019, this proportion has reached 33.66%. Since then, the proportion has increased to 67.09% in 2021.
Although Huaxi Bio has always emphasized that it is a biotechnology company, judging from its current main business composition and development trend, it is more like a cosmetics company.
Compared with Huaxi Bio's transformation, Bettani has always focused on the skin care product field with the Winona brand as the core, and Winona's revenue share continues to remain around 98%.
"Bullet Finance View" selects Huaxi Bio's functional skin care business. Compared with Betelni, we can see that since Huaxi Bio's skin care business is still in the growth stage, the overall growth rate is higher than Betelni. In 2021, Betteni's revenue was 4.022 billion yuan, a year-on-year increase of 52.57%. Huaxi Bio's skin care business revenue was 3.319 billion yuan, an increase of 146.58% year-on-year, nearly three times that of Bettani.
2018-2021, the growth rate of Huaxi Bio's skin care products business has remained above 100%, while Bettani has remained stable at around 50%.
Under this trend, assuming that Huaxi Bio's skin care products' revenue growth rate is 100% and Beitaini's revenue growth rate is 50%, the revenue of the two in 2022 is about 6.6 billion yuan and 6 billion yuan. Huaxi Bio will surpass Beitaini in 2022 and become the largest domestic functional skin care products company.
The data for the first half of this year can also confirm this trend. According to Oriental Fortune Choice data, in the first half of 2022, Huaxi Bio's functional skin care business achieved revenue of 2.127 billion yuan, and Beitani achieved revenue of 2.05 billion yuan. Huaxi Bio has surpassed Beitani.
Revenue and growth rate are only one aspect. Although the gross profits of Huaxi Bio and Betteni remained at around 80%, and the overall difference was not big, there was a clear difference between the two in R&D and marketing investment.
From the above figure, the R&D cost of Huaxi Biologics accounts for 6% in 2021, while Bettani is 3%. In terms of marketing investment, the proportion of Betani's sales expenses has been stable at around 42% over the past four years, and the proportion of Huaxi Biological's sales expenses has increased rapidly in the past two years, with 42% and 49% in 2020 and 2021 respectively. The growth of sales expenses of
directly promoted the rapid growth of Huaxi Bio's skin care business. In 2020 and 2021, Huaxi Bio's sales expenses increased by about 111% and 122% year-on-year. During the same period, its skin care business increased by 112.3% and 146.58%.
During the same period, Bettani's sales expenses increased by 31% and 52%, and achieved revenue growth of 35.64% and 52.57%.
It can be seen that the performance growth of Huaxi Biology and Betteni are both positively correlated with sales expense investment.
In view of the high growth in sales expenses in Huaxi Biotechnology for two years, the proportion of sales expenses is the same as that of Bettani, and the supply efficiency is improving. It can be seen that at this stage, Huaxi Bio can still drive rapid revenue growth through high investment.
There are also huge differences between Huaxi Biology and Betteni in terms of strategic direction and business layout.
In Wang Weina's view, Huaxi Biology and Betteni are both very typical domestic new beauty brand companies in the past two years, and their competitiveness is not the same.
"Betani has been deeply engaged in sensitive skin for many years, and has formed her own unique strategy from channels, products, R&D ideas to price system.Huaxi Bio is a fermented synthetic biology company with a large brand matrix. The product idea is to use hyaluronic acid as the core carrier to make different synthetic biology. "Wang Weina said.
She believes that the specific brand can be achieved and the potential, which is related to whether the synthetic biological products can be expanded and whether they can produce "killer products".
and Bettani's main revenue comes from the Winona brand. Huaxi Bio's skin care business is a typical multi-brand layout. The four core brands Runbaiyan, Mibeier, Quadi, and BM Skin Loss are differentiated in hyaluronic acid technology skin care, sensitive skin, anti-aging, skin measurement customization, etc.
Picture / Huaxi Bio's 2021 annual report
's dependence on online channels is an important way for Huaxi Bio and Bettani to quickly increase their performance. This is especially true for Huaxi Bio, which has rapidly risen its skin care business in the past two years.
In 2021, Huaxi Bio's online promotion service fee reached 1.313 billion yuan, and increased by 166% year-on-year compared with in 2020.
Huaxi Bio's skin care business not only relies on online channels, but also relies heavily on Chaotou live broadcast room.
Take the Quadi brand as an example. Magic Mirror market data shows that in 2021 Double 11, the Quadi sales of Li Jiaqi live broadcast room reached 334 million yuan, accounting for the total sales of Tmall flagship store that month that month 94% of the amount. After Li Jiaqi stopped broadcasting in June this year, Quadi's sales in July fell by 71% year-on-year.
Before 2021, Huaxi Bio's skin care business did not have offline physical stores. It was not until 2021 that the company began to deploy offline stores. This year, Runbaiyan opened 3 physical stores, and Quadi developed more than 200 offline franchise stores.
Advanced Analysis of the Huachuang Securities Company Group According to the view of Hu Qiongfang, the dependence of domestic beauty brands on online channels is directly related to the brand's development cycle and demands, as well as the competitive environment.
Wang Weina also believes that some domestic beauty brands currently have relatively weak brand accumulation, and the large product matrix has not yet been made. "New domestic brands need to be public domain brands. If they do not go to the live broadcast room, it is difficult to have the opportunity to have concentrated exposure, especially in recent years, there have been no killer-level new concepts and new products. "
In their opinion, overseas "three beauty giants" have a long history: Shiseido has been established for 150 years, L'Oreal has been more than 100 years, and Estee Lauder 70 years. These brands have been entering China for 20 or 30 years, and their brand assets and brand barriers have accumulated deep. Once they participate in the online promotion, the suppression of new products will be a dimensional reduction blow.
is found through functional skin care positioning. Differentiated market opportunities, driving performance through heavy marketing, have become an important path for domestic beauty brands to compete for the market. However, this model has many restrictions, and an effective and sustainable online customer acquisition channel is a key condition.
But this condition is obviously unstable. This year's Double 11 Tmall beauty product sales dropped significantly year-on-year, which may be another beginning of the change of online channels.
3, the new battlefield in the future
html l3 For beauty companies, R&D and product innovation can build long-term competitiveness for enterprises from another level.
mentions the innovation of skin care ingredients at the "big devil level", and "Bosen" is a typical representative.
L'Oreal Group 000's anti-aging patented black technology "Bosen" has been developed after 2000, which helped L'Oreal to open up a new anti-aging track for skin care products almost with its own strength, creating a new anti-aging track for skin care products and creating a A series of popular products such as Lena Black Bandage, Lancome Jing Pure Facial Cream, Yuxi Gild Cream, L'Oreal 20 Cream, etc.
Later, the industry called it the three anti-aging actives together with "peptides" and "A alcohol".
However, this process from research and development to launching products and dominating the market is obviously impossible to achieve overnight. Taking Huaxi Bio and Bettenni as examples, using functional skin care products to gain the opportunity to compete with foreign brands is inseparable from their unique product ingredients and technologies.
Among them, Huaxi Bio relies on the core components of hyaluronic acid, as well as microbial fermentation and crosslinking technology, etc. Bettani mainly relies on the preparation of active ingredients of Yunnan characteristic plant extracts, including 未分解解 extract, purslane extract essence, etc., and independent research and development technology in the field of sensitive skin care.
pic/photograph network, based on the VRF protocol
and other components and technologies, have created the company's product characteristics and unique advantages. However, whether it is the application of hyaluronic acid or plant extraction technology, it is obviously not enough to reach the level of creating a new track. The changes in the field of
Synthetic Biology have brought new imagination space to raw material innovation in the beauty field.
According to Synbiobeta data, the total amount of financing in the synthetic biology industry in 2021 is about US$18 billion, almost the sum of financing in the industry since 2009.
Since 2021, more than 10 synthetic biology companies in China that are involved in cosmetic raw materials have completed a new round of financing, including Zhongke Xinyang, Weiming Shiguang, etc.
Xu Jintao, senior manager of Open Innovation at L'Oreal China R&D Center, said in a live broadcast in May this year that synthetic biology provides substances that cannot be provided by existing chemical synthesis or synthesis methods, and can produce new substances, new products or new structures.
Currently, Huaxi Biology and Betteni are both planning or focusing on the field of synthetic biology. Huaxi Biology's layout includes building a synthetic biology research and development platform & laboratory, updating the synthesis circuit of raw materials that have been put into production, and using synthetic biology to make recombinant collagen.
Bettani mentioned at the performance exchange meeting in the first half of 2022 that the company began to pay attention to biofermentation and chemical synthesis of raw materials including polypeptide .
"The core competitiveness of future functional skin care products lies in differentiated efficacy and high safety, and synthetic biology can help beauty and skin care companies achieve raw material breakthroughs (such as recombinant collagen in new functional ingredients), bringing unique competitiveness to the companies." Jiang Tengfei, senior consulting director of Sullivan Greater China, told "Bullet Finance View".
Whoever can make breakthrough progress in the field of innovative raw materials can gain more initiative in the second half of the domestic beauty competition.
* The title picture in the article comes from: Visual China, based on RF protocol.
