Picture source @Visual China
Text by Mantis Observation, author by Tu Lin
Domestic beauty products have set off a consumer boom in the new era. The "Domestic Beauty Insight Report" shows that domestic beauty brands have occupied 56% of the market share.
Looking back at 2021 at the end of the year, there are still new changes worthy of attention in the domestic beauty market.
's Zhuben, Colaqui, and Winona, which have accurately segmented the track, and , Proya, , and Yuze, which have "heavy stocks" of large single products, have all reached the top of the sales list and become "new dark horses." The "former dark horse" players such as Perfect Diary and Hua Xizi that attracted much attention last year have all entered a new stage of "brand building" by establishing R&D centers and opening offline stores this year.
Domestic beauty brands have reached a new competitive node.
The brand did not stand firm, and the traffic did not dare to throw away
From the perspective of the development cycle of new consumer brands, it is no longer difficult for brands to complete the transition from "0 to 1" by relying on high-density traffic. However, in the "from 1 to 100" stage that determines whether the brand can last forever, a single traffic strategy is obviously no longer applicable, and the building of brand power needs to be put on the agenda simultaneously.
Many brands have realized this.
was the representative brand of domestic beauty products last year. Since this year, Perfect Diary and Huaxizi have increased their investment in brand building.
Perfect Diary continues to adhere to the multi-brand strategy. At the beginning of this year, Yixian E-commerce, the parent company of Perfect Diary, acquired the high-end brand Eve Lom, officially starting the road of "buy, buy, buy". At present, Yixian E-commerce already owns multiple brands including Perfect Diary, Little Aoting, Wanzi Xinxuan, Galénic, Eve Lom and Pico Bear.
At the same time, Perfect Diary has also increased its offline presence. channel investment. According to Huang Jinfeng, founder of Yixian E-commerce, at the China International Import Expo in November this year, Perfect Diary currently has 280 offline stores.
is different from Perfect Diary, Huaxizi focuses on improving its research and development capabilities. In August, Huaxi's parent company Yige Group's own R&D center in Hangzhou was officially put into use. It is understood that the R&D center integrates product research and development, quality inspection and CMF and other functions.
In the same month, Hua Xizi’s “Oriental Beauty Research Institute” in Hangzhou was also officially unveiled. The institute mainly starts from raw materials and formulas, combined with professional instruments and big data research, to provide customized professional makeup products for Oriental women's skin types.
It is a good thing that domestic beauty products have brand awareness, but building brand power cannot be achieved in a day. A cruel fact is that international brands that have been established for decades still dominate the competition. The sales data of
large-scale e-commerce festivals can prove this. Public information shows that including this year, from 2019 to 2021, the top three beauty brands on Tmall’s Double Eleven every year are L’Oreal , Lancôme and Estee Lauder , with rock-solid strength.
Even from the perspective of daily brand sales, international brands are still better. "Taobao Data" shows that on the Taobao platform, in November this year, the GMV of international brands L'Oréal, Estee Lauder and Lancôme were 2.235 billion yuan, 2.142 billion yuan and 1.906 billion yuan respectively, ranking firmly in the top three. Domestic beauty brands did not It poses a threat.
For Perfect Diary and Huaxizi, what needs to be more vigilant are those competitors who are also national brands. Before the brand has yet established itself, new brands are already carving up the market share of these “former dark horses”.
In the 2020 "Tmall 618 Beauty Pre-sale Top 10 List", Perfect Diary and Hua Xizi ranked 7th and 10th respectively. Among them, Perfect Diary won the TOP1 ranking of domestic beauty products last year.
This year, according to the "Tmall 618 Cosmetics/Perfume Brand Pre-sale List" released by ECdataway, international brands represented by YSL and Estee Lauder accounted for 9 seats, while domestic brands only had 1 seat. It is neither a perfect diary nor a perfect diary. It’s not Huaxizi, but Kelaqi, a cutting-edge brand established in 2018.
At the same time, Kelaqi also achieved self-transcendence. Data shows that on the day of sales on June 1, the sales of Kelaqi Tmall flagship store in the first 30 minutes exceeded the whole day last year.Among them, Hello Kitty’s single product sales even ranked first among the “domestic cosmetics sold in the first wave of Tmall 618”.
It is naturally a bit far-fetched to conclude that Kelaqi has surpassed Perfect Diary based only on the sales data of Tmall 618. But what is certain is that rising stars like Colachi have the potential to catch up with Perfect Diary.
This also means that in an environment where consumers are not very loyal to brands, competition will be the norm for domestic beauty brands in the future. As for beauty brands that have quickly gained momentum by relying on "grass planting + live broadcasting", competition is particularly dependent on traffic.
So we can see that Perfect Diary, known as the “Light of Domestic Products”, has not given up its strategy of “burning money in exchange for traffic” this year after its successful listing.
According to the third quarter 2021 financial report disclosed by Yixian E-commerce, the parent company of Perfect Diary, the company’s net income in the third quarter increased by 6% year-on-year to 1.34 billion yuan, with a net loss of 361.8 million yuan. Although the loss narrowed year-on-year (643.8 million yuan in the same period last year), marketing expenses remained high. In the third quarter of this year, Yixian e-commerce sales and marketing expenses were 911.3 million yuan, accounting for 67.9% of revenue.
In addition, at the marketing level, brands have not given up on the "traffic strategy" of using emerging concepts to build momentum for themselves.
In June this year, Hua Xizi’s virtual image “Hua Xizi” made her debut. At a time when real-life idols are controversial and the virtual idol market is getting hotter, many brands have launched their own virtual images. Hua Xizi, who is "taking advantage of the opportunity," is naturally here to get attention.
Even more exaggerated is the perfect diary that "entered" the metaverse. Tianyan Check APP shows that recently, Perfect Diary affiliated company Guangzhou Yixian E-Commerce Co., Ltd. applied to register the trademark "PICO Bear Yuanshi" and "PERFECT DIARY METAVERSE". The international classification includes daily chemical products and kitchen sanitary ware. The current trademark status is applying.
It is foreseeable that in this era of "the smell of wine is afraid of the dark alleys", the relationship between domestic beauty brands and traffic will only be long-term. If a brand wants to go long term, it must build brand power and must not lose its traffic strategy.
Small track, large single products, the "new breakthrough password" of domestic beauty products?
From the perspective of the capital market, domestic beauty brands in niche markets are particularly popular this year. Many brands have completed large amounts of financing one after another, and some have even been successfully listed:
html On November 28, Colachi’s parent company Meishang Co., Ltd., which specializes in lip gloss , officially announced the completion of Series B financing totaling 400 million yuan; html On March 8, Zhuben, which mainly promotes herbal cleansing oil, completed a $50 million Series B financing; html On March 25, the parent company of "Winona", a domestic brand that focuses on sensitive skin and care, rang the bell on the Shenzhen Stock Exchange. The stock price rose 272% at the opening, with a total market value of nearly 70 billion yuan.This is also in line with the development trend of new consumer brands.
In the new era of information explosion, consumers' attention has shifted from fragmentation to dust. Brands without significant differentiation characteristics make it almost difficult to attract their attention. For new consumer brands, they tend to look for opportunities in more segmented tracks rather than getting involved in traffic wars that are beginning to show signs of fatigue.
It is worth mentioning that these new brands from the segmented circuits have almost all reached the top of the sales list this year.
In addition to the aforementioned Colachi, Zhuben’s online sales exceeded 280 million yuan on Double 11 this year, ranking first on Tmall’s Double 11 new beauty brand list. As the only domestic brand on the "Tmall Double 11 Skin Care Sales Ranking" in the past two years, Winona rose from 9th last year to 7th, surpassing SK-II and La Mer for the first time.
In addition to these new players in the segmented tracks, this year, there are also some old players who have taken advantage of the opportunity of "big single products" to regain market favor.
In 2020, Proya launched dual anti-aging essence and ruby essence to “test the waters”. In 2021, Proya began to "heavily stockpile" these two items. Data shows that Proya's sales expenses in the first half of 2021 were 807 million yuan, accounting for 42.09% of operating income (33.04% in the same period last year), a year-on-year increase of 350 million yuan, an increase of 76.47%.
Judging from the final results, this directly increased the sales of Proya's large single products.
In 2020, the revenue of Proya's dual-resistant series + ruby series will account for about 10% of the total revenue. In the first three quarters of this year, Proya's large single products accounted for 21% of the brand's revenue.
The same applies to Yuze, a subsidiary of Shanghai Jahwa. With its single product Centella Asiatica Safe Repair Mask, during this year’s 618 pre-sale period, Yuze occupied the ninth place on the TOP10 list within the first hour of the opening, becoming one of the new brands that ranked among the “Top Ten Hot Products” for the first time.
Of course, for brands, the large-single-product strategy can not only enhance market awareness, but also simultaneously increase the brand's customer unit price and repurchase rate, thereby bringing about economies of scale and enhancing profitability.
Take Proya as an example. Thanks to the effective drive of large-scale single products, Proya’s unit price per customer on Tmall platform increased from 140 yuan last year to 157 yuan this year. At the same time, in the first three quarters of 2021, the company achieved operating income of 3.012 billion yuan, a year-on-year increase of 31.48%, and net profit attributable to shareholders of listed companies was 364 million yuan, a year-on-year increase of 27.82%.
So, does this mean that small tracks and large single products will be the "panacea" to save domestic beauty brands?
"Mantis Observation" believes that it may not be the case.
In the consumer field, it is almost difficult to block brands from categories, especially beauty consumption. For example, when talking about whitening essence , we can think of the small light bulb of SK-II and the small white bottle of OLAY. The former is not unique.
In other words, for domestic beauty brands, even if they gain brand recognition by accurately segmenting the track and promoting major single products, it will be difficult to fully invade the minds of consumers. The threshold for imitating beauty brands is not high, and it is not completely impossible for new brands to catch up.
Take cleansing oil as an example. As mentioned before, Zhuben once again won the first place in Tmall’s Double Eleven cleansing oil category this year, but the emerging brand “Lan” is also accelerating its rise.
On the consumer side, many bloggers on Xiaohongshu began to compare the differences between the two brands. On the capital side, the brand has completed two rounds of financing totaling 200 million yuan.
From the underlying logic, domestic beauty brands are no different from other consumer brands, and brand building is an important source of competitive advantage.
According to "Mantis Observation", building brand power requires brand cultivation of final thinking. That is, create the future based on instinctive advantages, so as to gain greater competitive initiative for ourselves. This requires domestic beauty brands to make comprehensive efforts from the dimensions of products, marketing, channels and supply chains.
For example, at the marketing level, we need to get rid of "external dependence" and strengthen the brand's own ability to control traffic.
After the "Viya rollover" incident, for brands, over-reliance on top anchors has become a more "risky" choice. Since regular live broadcasting is more conducive to achieving a "saturation attack" and achieving the goal of occupying consumers' minds for a long time, brand self-broadcasting may be more worth trying.
At the end of November, the "2021 Beauty Short Video and Marketing Trend Insights - Douyin Version" released by Feigua Data showed that brand self-broadcasting has become one of the most popular methods for beauty brands in recent months. The effect of is also very significant. Data shows that compared with 2021Q1, on the Douyin platform, the number of Q3 beauty brand stores has nearly doubled, and sales from beauty brands accounted for more than 60% in September. Compared with January, sales of beauty products increased by 188% in September.
For another example, at the product level, refuses to be "stuck" by big brands and polishes more products that can span the life cycle.
As mentioned before, Winona is the only national brand to enter the skin care category on Tmall’s Double Eleven this year. This aspect shows that national brands are showing great growth potential. On the other hand, we have to admit that international brands are still more “beatable” in competition. The reason why
is “competitive” is that in addition to years of brand accumulation, it also has products that can span the life cycle. SK-II has fairy water and small light bulbs; Lancôme has small black bottles and pure face cream; Estee Lauder has small brown bottles and so on. The reason why these brands can last forever is because their products have never been shaken by the emergence of new brands.
Fortunately, some domestic beauty brands have also begun to polish their products. Pechoin began to cooperate with University of Berlin in Germany, and Perfect Diary established an open lab.
But this is not enough. For domestic beauty products to completely get rid of the negative label of "making products with feet", more brands need to participate, pay attention to product research and development, and establish a more stable brand moat.
Fortunately, domestic beauty products are ushering in the “best era”.
According to the "2021 China Local Beauty Industry Research Report" released by iResearch , in 2020, China's local beauty market will reach 157.6 billion yuan. In 2023, the scale of China's local beauty market is expected to be approximately 252.7 billion yuan, and the compound growth rate from 2021 to 2023 is expected to reach 16.6%.
It won’t be long before we can see whether the major domestic beauty brands will last forever or be a flash in the pan.
