The perfect diary, which was launched by such a "top stream" as Xiaohongshu and Li Jiaqi, has experienced great ups and downs in the capital market.
As a "catfish" that stirs up the domestic makeup market, Perfect Diary is the "lucky one" born under the trend of the times. From the rise of content e-commerce such as Xiaohongshu, e-commerce live broadcast and other channels, the eyes will be aimed at the Z generation (post-95) young people, through the deep binding with Li Jiaqi, Wei Ya and other 15,000 Internet celebrity KOLs, please Zhou Xun, Liu Haoran as a global spokesperson, Perfect Diary has become a benchmark in the field of new domestic makeup.
This new domestic makeup dark horse has quickly become a "fragrant food" in the eyes of capital. Under the stars, in November 2020, Perfect Diary's parent company Yixian E-commerce quickly landed on the US stock market, which is only 3 years after the birth of the "Perfect Diary" brand, and the last listing speed was Luckin Coffee, which took only 18 months from the establishment of the brand to the listing.
In February 2021, the stock price of Yixian E-commerce climbed as high as $25.47 per share, with a market value of nearly $16.1 billion, and then it was lost. As of February 2, 2022, The company's share price was $1.52, and the company's market value is now less than $1 billion, which is $15.1 billion (about 96 billion yuan) from last year's high.
Behind this beauty faucet that has hollowed out countless women's wallets are three men who have left home in the e-commerce industry, and they have sent the nameless person of perfect diary to the position of "light of domestic goods" through superb marketing.
01 Rely on the "big name equalizer" to get out of the circle
Spend dozens of dollars to enjoy the happiness of big names, and Perfect Diary has successfully captured the psychology of young people with "big names flat replacement".
Little Red Book likes "big cousin color" and is worried about wallets at the same time? The Little Black Diamond 220 launched by Perfect Diary is enough to "fake the truth" and like millions of likes. According to the statistics of the Little Red Book blog post, the #208 of the Perfect Diary Little Black Diamond is Dior #999 The red flatty, and the small pink diamond #CO2 is Lancôme #196 Flat Replacement. Perfect Diary Tmall flagship store product links with the "affordable" label accounted for 14%, is the second largest label after the flat.
Perfect Diary's successful "big name flat replacement" slogan against the word-of-mouth of first-line makeup brands, coupled with the outer packaging that does not look like losing big brands, and sharing a foundry with first-line big names, these combinations make Perfect Diary play a "low" price, all of which are too tempting for young people.
Because compared with the lipstick of two or three hundred yuan at every turn, the trial and error cost of dozens of yuan is too low, and the amount in first-tier and second-tier cities is only the price of a cup of milk tea.
Behind the success of Perfect Diary with its "extreme cost performance", it stems from the post-95 generation living in the Internet era. According to the Deloitte report, more than 70% of domestic makeup consumers come from second- and third-tier cities, and this year's young people are no longer superstitious about big brands, and they are more pursuing the cost-effectiveness of products, because I want to like it when it costs money, not what you like.
Generation Z's multi-gold "Hao" and cute "cute" make their first contact with beauty age 10 years earlier than the 60s and 70s. The makeup penetration rate of Generation Z has reached 40%, and post-95 consumers prefer makeup consumption more than post-90s consumers.
In addition to the higher acceptance of makeup, the consumption concept of post-95 young people has also changed, and their purchasing strategies are usually based on the word of mouth of the product in the online channel and the recommendation of friends or KOLs.
In addition to the pursuit of big-name equality of this positioning, perfect diary marketing means is also known as "industry textbook", from the earliest little red book grass marketing as the base point, to vibrato, Kuaishou, WeChat, Weibo, B station open screen advertising, content distribution, live streaming with goods, the traffic dividend brought by channel reform is played by Perfect Diary clearly.
The traders behind this are inseparable from co-founder Huang Jinfeng. In 2003, after graduating from Sun Yat-sen University, Huang Jinfeng joined the daily chemical giant Procter & Gamble. It can be said that without this experience there would be no perfect diary now.
Why? After Joining Procter & Gamble and attending the company's training, Huang Jinfeng wrote a diary titled "P&G's Most Mysterious CMK Department Disclosure".
It is reported that the CMK department is the department responsible for analyzing, monitoring and predicting consumer behavior and market changes, and is one of the most mysterious departments of P&G, which determines the positioning and company direction of P&G products. Of course, Huang Jinfeng learned much more than that.
After three years at Procter & Gamble, Huang Jinfeng chose to go to the United States for further study, returning to China at the time of the rise of mobile Internet and Taobao e-commerce in 2011. Huang Jinfeng, who believes that the mobile Internet is promising, joined the YuNifang, which started with a mask, and is responsible for the operation of the Taobao e-commerce brand, all the way from the grassroots level to the position of COO (chief operating officer).
It can be said that from Procter & Gamble to YuNifang to Perfect Diary, he who deals with e-commerce and products and users knows too well how to grasp the psychology of consumers.
02 The second in command leaves, the story is not easy to tell?
After 5 years of suffering together, Chen Yuwen, a comrade-in-arms who fought side by side with Huang Jinfeng, chose to get off the bus in advance.
In mid-2021, Perfect Diary's parent company, Yixian E-commerce, announced that Chen Yuwen, one of the company's three co-founders, resigned as a director and chief operating officer (COO) of Yixian E-commerce for health and other personal reasons. After his resignation, Chen Yuwen will continue to serve as a consultant to the company.
This is the first executive change event of Yixian E-commerce in less than a year since its listing in 2020. The three founders of Perfect Diary are from the same door and all graduated from Sun Yat-sen University. However, in 5 years, the "sweet stage" of the three people has come to an end.
According to the 2020 financial report, as one of the founders, Chen Yuwen holds 7.5% of the shares, second only to founder and CEO Huang Jinfeng, who holds 24.9% of the shares, and higher than Lu Jianhua, co-founder director and chief sales officer who holds 3.4%. Based on the latest market capitalization, Chen Yuwen's net worth is $72 million.
If Huang Jinfeng is the leader who masters the product positioning, then Chen Yuwen, as the second in command of the company, is the executor.
In 2016, at the call of Huang Jinfeng, Chen Yuwen and Lu Jianjun, who are also alumni of Sun Yat-sen University, joined the entrepreneurial journey. In addition to Huang Jinfeng's experience in the field of beauty and skin care, Chen Yuwen and Lu Jianjun do not have any experience in beauty, but have been in the FMCG industry and e-commerce field for many years.
As Huang Jinfeng's college classmate Chen Yuwen, who was originally the general manager of the clothing brand "Pure" e-commerce, led the team to create the men's brand "A21" from 0 to 1, achieving sales of 1 billion yuan in just 3 years, and has a lot of experience in e-commerce operations and traffic. Lü Jianhua and Chen Yuwen were both colleagues of Yi Chun.
Although the Perfect Diary was founded by Huang Jinfeng and the three men, it cannot be said how deeply they know about women's beauty, but the operating rules of this business are clearly understood by them.
Chen Yuwen, who came from a science and engineering background, assumed an important role in "telling stories" in front of the stage.
Just two months before announcing Chen Yuwen's departure, when he made his last appearance in April 2021, he also delivered a keynote speech on "DTC Business Model, Brand Direct to Users, Building a Beauty Company with a "Chip"".
For the beauty road of perfect diary, Chen Yuwen has his own understanding. In his view, beauty is the foundation, and technology is empowerment. In fact, the take-off of the perfect diary is indeed inseparable from the help of science and technology.
Perfect Diary adopts a DTC (Direct To Consumer) model in sales, there is no intermediate level, and all communication is directly to the consumer. For example, in research and development, Perfect Diary will analyze product reputation and fan preferences as one of the important bases for product development, and will conduct multiple rounds of internal research and voting before each product and event.
Understanding consumers is not imaginary, in the channel of network marketing, all understanding of consumers is based on data, and data will not lie. As a cosmetics company, it's hard to imagine that Yixian E-commerce has a technology and data team of more than 200 people.
This is also why Chen Yuwen once said that he wanted Perfect Diary to become a company with a "chip". But this "chip" does not rely solely on technology, but through a large number of marketing methods such as deep binding with 15,000 KOLs, or through communities such as Completed Hearts, to obtain a huge pool of customer traffic.
Quickly follow up and test consumer preferences and needs, timely adjust product production and positioning, so that products are always the user's favorite choice. This kind of play that firmly grasps the preferences of consumers can be said to be used to the extreme by the perfect diary.
In 2019, Perfect Diary, which was founded only three years ago, successfully occupied a 4% market share in the Chinese cosmetics market.
Although the perfect diary of "overnight popularity" has gained the pursuit of capital and the market, there are many voices questioning its over-inclined marketing and ignoring research and development.
This is not exaggerated, such as the small fine lipstick launched by Perfect Diary, puppy eyeshadow and other explosive products, by binding Chanel ambassador Zhou Xun and lipstick brother Li Jiaqi to improve brand style and popularity.
According to incomplete statistics, there are more than 12 spokespersons for various products of Perfect Diary, including Zhu Zhengting, Wu Qingfeng, Luo Yunxi, etc. In fact, the perfect diary's saturation marketing explosives have long been thoroughly studied by peers. Like Colorkey, she found stars such as Meng Meiqi and Di Li Reba as spokespersons, and Hua Xizi successively cooperated with stars such as Cuckoo, The Times Youth League, and Ju Jingyi.
It can be said that the competition in the track of domestic beauty has become more and more intense. In the critical stage of the growth of Perfect Diary, Chen Yuwen, the second-in-command who plays with the concept of "technology + beauty", suddenly left, who will replace him to help Perfect Diary tell the next story?
03 Growing anxiety under "internal and external troubles"
In the eyes of many people, Yixian e-commerce seems to have only one "perfect diary" brand, in fact, its product matrix has long been expanded from the initial perfect diary to little Odin, Guanzi Xinxuan, Galénic, DR. WU Dahl skin (Chinese mainland business), Eve Lom, Pi Ke Xiong a total of 7 brands, including makeup and skin care, covering low, medium and high-end consumers.
Perfect Diary also knows that makeup does not have a strong dependence on consumer retention and repurchase, and has also vigorously laid out the field of skin care products in recent years. But this revenue growth point has not yet exploded.
According to the financial report, from 2018 to 2020, the total sales of Perfect Diary's skincare division were 6.2 million yuan, 246.3 million yuan and 739.8 million yuan, accounting for 0.8%, 7.0% and 12.2% of the total sales. Nearly 90% of its revenue comes from the makeup business.
(Perfect Diary Sales Hot Eyeshadow Makeup Palette)
In order to open up the new, promote the revitalization, retention, monetization, fission and community of this nobody will play, Perfect Diary through the deep binding of the Little Red Book this "grass planting channel", quickly with the help of traffic to become a "net red domestic beauty" brand.
This also led to a sharp increase in sales and marketing expenses of Perfect Diary from 1.25 billion yuan in 2019 to 3.41 billion yuan in 2020; its revenue only increased from 3.03 billion yuan in 2019 to 5.23 billion yuan in 2020.
According to the third quarter of 2021 financial report disclosed by Yixian E-commerce, the company's net income in the third quarter increased by 6% year-on-year to 1.34 billion yuan, and the net loss was 360 million yuan. Although the loss margin narrowed year-on-year (640 million yuan in the same period last year), marketing expenses remained high, and in the third quarter of 2021, The sales and marketing expenses of Yixian E-commerce were 910 million yuan, accounting for 67.9% of revenue.
With a round of reshuffle in the live broadcasting industry in 2021, super KOL Weiya evasion of taxes and Li Jiaqi and L'Oréal broke out the "lowest price dispute", the "delicate balance" between brand owners and super head KOLs was broken, and for Internet celebrity brands such as Perfect Diary, which rely heavily on well-known KOLs, deepening their moat is its top priority.
From the perspective of patents, compared with L'Oréal, which has more than 1,300 patents, as of the end of 2020, Perfect Diary has only 69 patents, including 1 utility model patent, 32 design patents, 36 invention patents (some of which are being transferred), and 23 patents awaiting approval worldwide.
In addition, its research and development expenses can be said to be pitifully small compared with large sales and marketing expenses. From 2018 to 2020, perfect diary research and development expenses accounted for 2.64 million yuan, 23.18 million yuan and 66.51 million yuan, accounting for 0.4%, 0.8% and 1.3% of net income, respectively.
As of the first three quarters of 2021, perfect diary research and development expenses were 35.81 million yuan. While increasing research and development efforts, Perfect Diary is also constantly laying out to the high-end, such as the acquisition of high-end skin care brand Eve Lom in 2021, whose more well-known "net red" product is makeup remover. According to the price of Tmall's official flagship store, this makeup remover is priced at 490 yuan in 50ml specifications and 980 yuan in 200ml specifications.
In addition, Perfect Diary also acquired Galénic, a high-end beauty brand owned by Avène's parent company, after acquiring Shanghai makeup brand Odin Jr.
In addition to the internal worries of constantly strengthening its own moat, Perfect Diary also faces external problems from other domestic beauty competitions. Brands such as Huaxizi and Tangerine, which are also popular with high cost performance and marketing strategies, are also attacking the status of Perfect Diary, and not even first-line big names such as L'Oréal are also learning this series of "new playing styles".
In 2008, CBN Weekly honored the company's 20th year in China with the article "Learning from Procter & Gamble". The introduction reads: "In the past 20 years, this king of the global daily chemical industry has conquered Chinese hair, skin, face, clothing... And, of course, their money bags. ”
Huang Jinfeng, who has worked at Procter & Gamble for many years, also learned this experience from Procter & Gamble: how to conquer this generation of post-95 young people with the low threshold of beauty, including lipstick, eye shadow, highlighters, skin care products, etc., as well as their money bags.
Although the goals are different, the routine of making money is not new.
(Author 丨 Zeng Jiayi, Editor 丨 Liao Ying)