Image source @ vision china
Wen Yan mantis observation, the author Tu Lin
Domestic beauty has set off a new era of consumption boom. According to the Insight Report on Domestic Beauty, domestic beauty brands have occupied 56% of the market.
Looking back at 2021 at the end of the year, there are still new changes worthy of attention in the domestic beauty market.
Book by book, Ke Laqi, Winona, and Polaiya and Yuze, the "heavy items", all reached the forefront of the sales list and became "new dark horses". Last year, the "former dark horse" players such as Perfect Diary and Hua Xizi, which attracted much attention, entered a new stage of "plastic brand" by setting up R&D centers and opening offline stores this year.
Domestic beauty brands have already stood on new competition nodes.
Judging from 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in the "from 1 to 100" stage, which determines whether the brand can last forever, a single flow of play is obviously no longer applicable, and the shaping of brand power needs to be put on the agenda simultaneously.
Many brands have realized this.
As the representative brands of domestic beauty products last year, since this year, Perfect Diary and Hua Xizi have increased their investment in brand building.
Perfect Diary continues to adhere to the multi-brand strategy. At the beginning of this year, Perfect Diary’s parent company, Yixian E-commerce, bought the high-end brand Eve Lom, officially opening the road of "buying in buy buy". At present, Yixian E-commerce has owned many brands including Perfect Diary, Little Odin, Wanzi Xinxuan, Galénic, Eve Lom, Pico Bear and so on.
At the same time, Perfect Diary also increased investment in offline channels. According to Huang Jinfeng, the founder of Yixian e-commerce, in China International Import Expo(CIIE) in November this year, Perfect Diary currently has 280 offline stores.
Different from the perfect diary, Hua Xizi focuses on the improvement of research and development capabilities. In August, the self-owned R&D center of the parent company Yige Group in Hangzhou was officially put into use. It is understood that the R&D center integrates product development, quality inspection and CMF.
In the same month, Hua Xizi’s "Oriental Beauty Makeup Research Institute" in Hangzhou was officially unveiled. Based on raw materials and ingredients, combined with professional instruments and big data research, the institute provides customized professional makeup products for oriental women’s skin.
It is a good thing that domestic beauty products have brand awareness, but the shaping of brand power is not a day’s work. A cruel fact is that those international brands that have been deposited for decades still dominate the competition.
The sales data of large-scale e-commerce festival can prove this. According to public information, including this year, from 2019 to 2021, the top three beauty lists of Tmall Double Eleven are L ‘Oreal, Lancome and Estee Lauder, and their strength is rock solid.
Even from the daily sales of brands, international brands are still better. "Amoy Data" shows that in the Amoy platform, in November this year, the GMV of international brands L ‘Oreal, Estee Lauder and Lancome were 2.235 billion yuan, 2.142 billion yuan and 1.906 billion yuan respectively, ranking in the top three, and domestic beauty brands did not pose a threat to them.
For Perfect Diary and Huaxizi, it is more important to be wary of those competitors who are both national brands. When the brand has not yet established itself, the new brand has been carving up the market share of these "former dark horses".
In the TOP10 List of Tmall 618 Beauty Pre-sale in 2020, Perfect Diary and Hua Xizi ranked 7th and 10th respectively. Among them, the perfect diary won the TOP1 of domestic beauty last year.
This year, according to the "Tmall 618 Makeup/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, which was neither a perfect diary nor a flower, but a new brand Ke Laqi established in 2018.
At the same time, Ke Laqi also achieved self-transcendence. According to the data, on the opening day of June 1st, the sales of Laqi Tmall flagship store in the first 30 minutes exceeded that of last year. Among them, the sales of Hello Kitty single products won the first place in the "domestic cosmetics sold in the first wave of Tmall 618".
Only from the sales data of Tmall 618, it is concluded that Ke Laqi has surpassed the perfect diary, which is naturally far-fetched. But what is certain is that a rising star like Ke Laqi has the potential to catch up with the perfect diary.
This also means that competition will be the normal state of domestic beauty brands in the future in the environment where consumers are not loyal to the brand. And the beauty brand that relies on "planting grass+live broadcast" to rise rapidly, the competition is especially inseparable from traffic.
Therefore, we can see that the perfect diary, known as the "light of domestic products", has not given up the play of "burning money for traffic" this year after its successful listing.
According to the financial report for the third quarter of 2021 disclosed by Perfect Diary parent company Yixian E-commerce, 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 rate narrowed year-on-year (643.8 million yuan in the same period last year), the marketing expenses remained high. In the third quarter of this year, the sales and marketing expenses of Yixian e-commerce were 911.3 million yuan, accounting for 67.9% of the revenue.
In addition, at the marketing level, the brand has not given up the "flow play" that uses emerging concepts to create momentum for itself.
In June this year, Hua Xizi’s virtual image "Hua Xizi" made its debut. When the real idol is controversial and the virtual idol market is getting hotter, many brands have launched their own virtual images, and Hua Xizi, who "takes advantage of the situation to get on the bus", naturally comes to attention.
Even more exaggerated is the perfect diary of the "incoming" meta-universe. Tianyancha APP shows that recently, Guangzhou Yixian E-Commerce Co., Ltd., a related company of Perfect Diary, applied for the registration of the trademarks of "Pico Xiongyuan Universe" and "PERFECT DIARY METAVERSE". The international classification includes daily necessities and kitchen sanitary ware, and the current trademark status is under application.
It is foreseeable that in this era of "the wine is also afraid of the deep alley", the relationship between domestic beauty brands and traffic will only be a long-term binding relationship. If the brand wants to go long-term, the brand power must be built, and the flow of play can not be lost.
Judging from the attitude of the capital market, this year, domestic beauty brands that subdivide the track are particularly popular. Many brands have successively completed a large amount of financing, and some have successfully listed:
On January 28th, Meishang, the parent company of Ke Laqi, which mainly focuses on lip glaze, officially announced the completion of Series B financing with a total amount of 400 million yuan;
On March 8, cleansing oil, the main promoter, completed the $50 million Series B financing;
On March 25th, Betani, the parent company of Winona, a domestic brand focusing on sensitive muscle care, rang the bell in Shenzhen Stock Exchange, and its share price rose by 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 turned from fragmentation to dusting, and brands do not have obvious differentiation characteristics, which is almost difficult to attract their attention. For new consumer brands, they tend to go to more subdivided tracks to find opportunities than to get involved in the traffic war with initial signs of fatigue.
It is worth mentioning that these new brands from subdivided tracks have almost reached the forefront of the sales list this year.
In addition to the aforementioned Ke Laqi, the sales volume of the whole network in double 11 this year exceeded 280 million yuan, ranking first in the list of new brands of Tmall double 11 beauty cosmetics. As the only domestic brand in the "Tmall double 11 Skin Care Sales Ranking" in recent two years, Winona rose from the 9th last year to the 7th, surpassing SK-II and Hailan Mystery for the first time.
In addition to these new players who subdivide the track, this year, some old players have regained the favor of the market by taking advantage of the "big single product".
In 2020, Polaiya launched double-antibody essence and ruby essence to "test the water". In 2021, Polaiya began to "heavy warehouse" these two items. The data shows that Polaiya’s sales expenses in the first half of 2021 were 807 million yuan, accounting for 42.09% of operating income (compared with 33.04% in the same period of last year), an increase of 350 million yuan or 76.47%.
From the final result, this directly increased the sales of Polaiya’s big single products.
In 2020, the revenue of Polaiya Shuangkang Series+Ruby Series accounted for about 10% of the total revenue, and in the first three quarters of this year, the proportion of Polaiya single products in brand revenue has reached 21%.
Shanghai jahwa’s Yuze is the same. With the single product Centella asiatica peace of mind repair mask, during the pre-sale period of 618 this year, Yuze occupied the ninth place in the TOP10 list within one hour of opening, becoming one of the "Top Ten Explosions" brands among new brands for the first time.
Of course, for brands, the big single product strategy can not only enhance market awareness, but also simultaneously improve the brand’s customer unit price and repurchase rate, thus bringing scale effect and enhancing profitability.
Taking Polaiya as an example, thanks to the effective drive of big items, this year, the customer unit price of Polaiya on Tmall platform increased from 140 yuan last year to 157 yuan. At the same time, in the first three quarters of 2021, the company achieved operating income of 3.012 billion yuan, up 31.48% year-on-year, and net profit attributable to shareholders of listed companies was 364 million yuan, up 27.82% year-on-year.
So, does this mean that small tracks and big items will be the "panacea" to save domestic beauty brands?
"Mantis Watch" thinks that it may not be.
In the field of consumption, it is almost difficult to ban brands, especially beauty consumption. For example, when it comes to whitening essence, we can think of SK-II light bulb and OLAY small white bottle. The former is not unique.
In other words, as far as domestic beauty brands are concerned, even if they gain brand recognition by accurately subdividing the track and promoting large items, it is difficult to fully occupy consumers’ minds. The threshold of beauty brand imitation is not high, and it is not completely impossible for new brands to catch up.
Take cleansing oil as an example. As mentioned earlier, Book by Book won the first place in the category of Tmall Double Eleven cleansing oil again this year, but the new brand "Lan" is also accelerating its rise.
On the consumer side, many bloggers in Little Red Book 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 bottom logic, domestic beauty brands are no different from other consumer brands, and brand power shaping is an important source of competitive advantage.
According to Mantis Watch, the shaping of brand power needs the final thinking of brand cultivation. That is, create the future from the instinctive advantage, so as to strive for greater competitive initiative for yourself.And this requires domestic beauty brands to make full efforts from the dimensions of products, marketing, channels and supply chain.
For example, at the marketing level, get rid of "external dependence" and strengthen the brand’s own ability to control traffic.
After the "Viya Rollover" incident, for the brand, relying too much on the head anchor has become a more "risky" choice. Based on the normalized live broadcast, it is more conducive to achieving "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 Insight-Tik Tok Edition" released by Feigua Data showed that brand self-broadcasting has become one of the hottest ways for beauty brands in recent months.
The effect is also remarkable. The data shows that compared with 2021Q1, in the platform of Tik Tok, the number of beauty brand stores in Q3 has nearly tripled, and the sales from beauty brands accounted for more than 60% in September. Compared with January, the sales of beauty products in September increased by 188%.
For another example, at the product level, we refuse the big-name "stuck neck" and polish more products that can span the life cycle.
As mentioned above, Winona is the only national brand that has squeezed into the skin care category this year. This aspect shows that the national brand is showing great growth potential. On the other hand, we have to admit that international brands are still more "able to fight" in the competition.
The reason for "being able to fight" is not only the brand precipitation for many years, but also the products that can span the life cycle. SK-II has fairy water and small light bulbs; Lancome has small black bottles and pure face cream; Estee Lauder has a small brown bottle and so on. The reason why these brands can last forever is that their products last forever, and the emergence of new brands has not shaken the basic disk.
Fortunately, some domestic beauty brands have also begun to polish their products in a down-to-earth manner. Baique Ling began to cooperate with the University of Berlin in Germany and set up open lab in Perfect Diary.
But this is not enough. Domestic beauty cosmetics should completely get rid of the negative label of "making products with feet", and more brands need to participate, attach importance to product research and development, and establish a more stable brand moat.
Fortunately, domestic beauty cosmetics are welcoming a "best era".
According to the Research Report of China Local Beauty Industry in 2021 released by iResearch, the local beauty market in China will reach 157.6 billion yuan in 2020. In 2023, the local beauty market in China is estimated to be about 252.7 billion yuan, and the compound growth rate from 2021 to 2023 is expected to reach 16.6%.
It will soon be clear whether the major domestic beauty brands are evergreen or short-lived.
