From Perfect Diary, Hua Xizi to Winona, new domestic cosmetics brands have gradually emerged in recent years under the "halo of domestic products". However, the adjectives used for domestic beauty brands always seem to stay at the levels of "affordable", "cost-effective", "consci

From Perfect Diary, Hua Xizi to Winona, new domestic cosmetics brands have gradually emerged in recent years under the "halo of domestic products".

However, the adjectives for domestic beauty brands always seem to stay at the levels of "affordable", "cost-effective", "conscience", "cheap", etc., as if domestic products are born to be substitutes for big European and American brands.

No matter whether it is a new brand or an old domestic brand, it seems that no one can escape such a strange circle. For domestic makeup brands, "luxury", "classic" and "high-end" seem to be an area they have always wanted to touch.

Brand secret war in the domestic cosmetics market

For a long time, my country's cosmetics market share has been occupied by international brands. Among them, European and American brands still occupy a dominant position in my country's cosmetics market.

According to Euromonitor data, L'Oréal and Procter & Gamble have ranked first in my country's cosmetics industry all year round, with their market shares basically remaining around 10%. Other related companies such as Estee Lauder and Senior Hall have a market share of 2 Between %-5%.

Especially in the mid-to-high-end cosmetics market, it is almost monopolized by international cosmetics brands from Europe, America, Japan and South Korea. Euromonitor data shows that the top three companies in China's high-end cosmetics market share are L'Oréal, Estee Lauder and LVMH, with market shares reaching 18.4%, 14.4% and 8.8% respectively.

However, with the awakening of the awareness of domestic products among my country's consumer groups, domestic domestic cosmetics brands have begun to rise, and they have taken "affordability" and "cost-effectiveness" as their main brand directions. Domestic brands such as Pechoin, Nature Hall, and Xiangyi Herborist are advertising overwhelmingly.

In 2015, Pechoin's annual sales reached 10.5 billion yuan, with a compound growth rate of 35%. In just 2 hours after Double 11 started in 2016, the sales of Chando Tmall flagship store exceeded 50 million, exceeding the full-day performance of Double 11 in 2015; the 24-hour sales exceeded 100 million, reaching 108 million.

It is worth noting that Huaxizi, a new local beauty brand born in 2017, has an average unit price of 196 yuan. This is a mid-to-high-end cosmetics market that most local cosmetics brands have not set foot in. Huaxizi has spent five years Time has opened this gap from international brands. Public information shows that in 2021, Huaxizi's single-brand GMV exceeded 5.4 billion yuan, becoming the number one local cosmetics brand, achieving a year-on-year growth of 80% compared to the previous year.

In fact, this is closely related to the brand power of Huaxizi itself. As a domestic cosmetics brand, Huaxizi targets the Generation Z user group, integrates national style culture into the brand culture, and uses traditional classical elements as a cross-border brand. Expand the capital of influence and lead the new national style. This is evident from Huaxizi’s product packaging design. Powder and lipstick frequently appear in the industry and receive various praises.

In addition, Huaxizi has been able to capture the "hearts" of female consumers because it has also worked hard on product research and development, integrating some sufficiently traditional beauty and beauty knowledge into the creation of products, so that the "flowers for beauty" brand The core point becomes the brand’s competitiveness in attracting consumers.

The oriental-style product packaging design also integrates Huaxizi's brand concept of "Oriental makeup, nourishing makeup with flowers" into the form, giving people a refreshing feeling. The brand integrates traditional micro-relief technology in lipsticks, concentric lock lipsticks and other products It has extremely oriental characteristics and has become an important product for the brand to attract users and self-media communication. The first video pushed by Jeffree Star, the top American beauty blogger "Sister J" with 10 million+ fans on Youtube and a sharp "venomous tongue" in 2022 is to review the domestic cosmetics Hua Xizi, and the title even praises "The most beautiful in the world" makeups". The product strength of

has opened the door to the mid-to-high-end market for Huaxizi. In addition, it has excellent product support behind it. Under the product matrix of "big single product strategy", it has set its sights on foundation makeup and setting makeup categories since its establishment. The popularity of Huaxizi Air Powder is enough to prove this.

As the world's second largest consumer of cosmetics, China has become a hot "treasure land" for capital and brands. Domestic and foreign cosmetics brands want to occupy a piece of land in this hot land.

A mess after the “wild” traffic

However, from brands such as Hua Xizi and Mao Geping, we can also see that domestic cosmetics brands still have some shortcomings in the mid-to-high-end cosmetics market.

On the one hand, domestic cosmetics brands have a narrow audience, as can be seen from the audience groups of Huaxizi's products. From the age distribution point of view, the Huaxizi brand's audience is mainly concentrated in the age group of 20-39 years old. However, compared with the middle-aged consumer group (age 30-39 years old), the age of Huaxizi's consumer group is more skewed towards the 20- 29 years old.

However, as their age and financial strength increase, and their brand awareness increases, the possibility of embracing more high-end international brands is also increasing for this group of young users.

Songguo Finance learned from interviews with young consumers who use cosmetics around them that “for products used on the face, we generally choose reliable and high-end international brands, such as Dior, Guerlain, Lancôme, Yves Saint Laurent and other big brands, and the prices are not It has become the primary factor that affects their choice.”

On the other hand, domestic cosmetics brands lack brand cultural accumulation, and most of them maintain sales through low prices. Take a closer look at the domestic cosmetics brands established in recent years, such as Orange Duo, Colachi, Perfect Diary, and Huaxizi. These brands have been established for a relatively short time. Compared with international brands that have been established for decades or even hundreds of years, there is indeed a lack of Some brands are settling.

In order to quickly open up the market and increase sales, brands such as Huaxizi have differentiated themselves from international brands in terms of brand positioning. In addition, the popularity of short videos and social network traffic has allowed brands like Huaxizi to quickly break out of the industry in a short period of time through live streaming and social traffic.

But it is not easy to retain traffic. Hongxing Erke, La Chapelle, Fenghua, those brands whose "traffic fell from the sky" and were wildly consumed, soon returned to daily life after becoming popular. Without good product support, weeds can be planted quickly and weeded out even faster. For international brands to dominate the mid-to-high-end market, in addition to word-of-mouth product reviews, good products are also key.

Due to the lack of talent, domestic cosmetics brands are unable to in-depth innovative research and development and provide differentiated products. This may be the core of the "inability to compete" of domestic cosmetics brands in the mid-to-high-end market. Among

cosmetics, the level of R&D and formula difficulty of setting makeup and base makeup are the most complex, but this is the strength of international brands. For example, in addition to its most famous lipstick series, the cosmetics brand Yves Saint Laurent also performs well in its base makeup products. Its liquid foundation products are among the top ten liquid foundation brands all year round.

Of course, in the base makeup and makeup categories, we can still see some hot-selling single products from domestic brands, which even once crushed some big international brands in terms of popularity and sales. Business consultant data shows that from October 2020 to October 2021, Huaxizi Air Powder ranked first in the sales list on the Taobao platform, surpassing international brands such as Givenchy and Nars, with a market share as high as 21%. It also reflects Huaxizi’s brand power in the mid-to-high-end cosmetics market.

But one person’s power is always limited. Looking at the entire mid-to-high-end cosmetics market, there is still a certain gap between domestic cosmetics brands and international brands. The road for domestic cosmetics brands to extend to the mid-to-high end is destined to not be a smooth road.

To become a "century-old store", what Huaxizi lacks is not "traffic"

but the mid-to-high-end cosmetics market is another area that it has to enter. This is not only related to the "development height" of domestic cosmetics brands, but also determines the future direction of the entire cosmetics market and the "where to take and use" of thousands of consumer groups.

It is "imperative" to enter the mid-to-high-end cosmetics market. This is the "mission" that brands like Huaxizi must complete. How to tell the story of the mid-to-high-end market well, "Huaxizi" may start from the following aspects.

On the one hand, product strength is the key. New brands and products are constantly emerging, and consumers love the new and dislike the old. However, there are still some cosmetics brands and products that have been around for decades or even hundreds of years, and they can be active in the international market. Representative and recognizable high-quality products have become the brand's logo and formed a prominent brand. Product strength can be said to be the key to all this.

Take M·A·C’s classic bullet lipstick as an example. At present, after more than 30 years of continuous innovation and optimization, the Mei Ke Bullet Series now has 8 different textures and more than 200 shades of lipstick. The monthly sales volume in the Tmall official flagship store alone has exceeded 300,000+.

For Huaxizi, it may be possible to draw on MAC’s experience in the lipstick category and develop a class of mid-to-high-end products that are more brand-recognizable and more targeted based on Huaxizi’s current products and designs.

For example, the Huaxizi lipstick category is a cosmetics category that can be expanded. Currently, the highest unit price of a single Huaxizi lipstick is 219 yuan. Compared with other lipstick products under the brand, the biggest difference is in the packaging. Based on existing product designs, Huaxizi can upgrade the lipstick category in terms of color and texture, and differentiate it from affordable lipstick products in terms of color and texture to meet the product needs of more mid-to-high-end consumer groups.

Another dimension, strong product strength is inseparable from R&D innovation. Currently, big international brands generally have several or dozens of research institutes and laboratories, and spend a lot of money on product research and development and innovation every year. Financial report data shows that in recent years, the R&D expense rates of world-class beauty groups such as L'Oréal and Estee Lauder have generally shown a slight upward trend.

According to the Ping An Securities report, L'Oreal's R&D expenses in 2020 alone were close to US$1.2 billion, and the number of global R&D personnel was as high as about 4,000. Both data are much higher than the other two world-class beauty giants. From the perspective of R&D expense rate, the expense rate is stable at above 3%. This may also be the key to L'Oreal's ability to maintain its core competitiveness.

If domestic cosmetics brands want to achieve breakthroughs in the mid-to-high-end cosmetics market, R&D and innovation are inevitable. For Huaxizi, if we want to continue to make breakthroughs in the mid-to-high-end cosmetics market in the future, it is also essential to continue to increase investment in the research and development and innovation of mid-to-high-end cosmetics products.

Judging from Hua Xizi’s recent actions, there are already signs of this. On March 4, Huaxizi announced its five-year plan to build an oriental beauty research and development system, and said that in the next five years, Huaxizi will invest more than 1 billion yuan in multiple areas of product innovation, basic research and applied basic research. , to create an oriental beauty research and development system with complete categories and advanced technology.

Not long ago, the CMF laboratory under the Yige Group, the parent company of Huaxizi, was officially put into use. This means that the first CMF laboratory of a domestic beauty brand was launched in Hangzhou. Huaxizi will focus on the three major areas of color, material and processing technology. Increasing R&D and investment will also provide a strong guarantee for product innovation in the mid-to-high-end market.

Finally, brands can form their own value proposition by creating a mid-to-high-end brand image, so that consumers can easily form strong perceptions and memories and achieve brand output.

For example, the brand concept of YSL is very unique. YSL has created many classic elements, such as lace, bows, ruffles, flared skirts, hippie clothes, unisex clothes and other fashionable and avant-garde clothing styles. This is an avant-garde concept. Determined by traditional matching styles, we constantly break old concepts and form a unique system.

Implementing different brand concepts for mass products and mid-to-high-end products may not be a good strategy for Huaxizi to establish a corresponding brand image in the mid-to-high-end market. Just like the previous Honor of Huawei and Redmi of Xiaomi, in terms of brand and product Innovations have been made in many infrastructure and underlying elements.

For Huaxizi, we can continue to create mid-to-high-end products and content while adhering to the oriental aesthetic system, and form more differentiated product features. For example, Huaxizi has pioneered the application of many Chinese elements to brands and products, using the traditional Chinese color dark as the brand color and cinnabar as the lipstick color. Continuing to dig deeper into Chinese elements will help Huaxizi form a more differentiated core competitiveness in the mid-to-high-end market.

Times have changed, and in the fiercely competitive domestic cosmetics market, Huaxizi, as a cutting-edge brand, has blazed its own path.But for this domestic brand that wants to be a century-old store, it not only needs to make the plate bigger, but also needs to make the plate more stable. The entry into the mid-to-high-end market is only a step in this century-old journey. As long as they work hard, I believe that domestic brands will also receive better feedback in the high-end market.

Article source: Songguo Finance, aiming to provide lively and in-depth analysis of financial and business value, and be an industry observer with attitude!