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Regarding its performance, Huang Jinfeng, founder, chairman and CEO of Yixian E-commerce, said: "At present, the industry is facing greater challenges. Consumer demand is weak, competition is more intense, and the industry's average promotional discounts and marketing investments are rising. Despite this, the company achieved growth in full-year sales revenue and gross margin. In the future, based on the existing brand layout of the three major plates, we will seize the opportunity of this wave of market adjustment period, while reducing fat and increasing muscle, strengthening refined management and improving operational efficiency, and preparing for long-term combat. ”
Domestic makeup faucet Revenue continued to grow during the epidemic
Since the second half of 2021, the growth of the domestic beauty industry is facing challenges due to the slowdown in the growth rate of beauty demand, the disappearance of the traffic peak dividend, and the landing of new cosmetics boots. The overall gradual transformation from channel dividend drive to product and brand drive stage also means that the industry is moving towards the stage of large players in all-round ability competition.
Statistics of the performance data of a number of domestic and foreign beauty listed companies in the past three years found that since 2020, the revenue of beauty groups such as L'Oréal, Estée Lauder, and Shiseido and domestic beauty companies has been affected by the epidemic to varying degrees. Most companies experienced year-on-year revenue declines in 2020, and some companies will gradually recover or slightly exceed pre-pandemic levels in 2021. Since its inception, Yixian E-commerce has maintained revenue growth in 2020 and 2021.
In the past few years, with the improvement of brand awareness and penetration rate, Perfect Diary has basically completed the domestic product education of the makeup industry, and more and more people have begun to correctly view and purchase and use domestic products. This general trend is especially obvious among young people, with the purchasing power of the new generation such as the post-00 generation increasing, the industry may usher in a number of opportunities for domestic substitution. In the face of this market trend, Yixian E-commerce has launched three original national tide makeup brands of Perfect Diary, Little Odin and Pi Ke Xiong, covering different segments of the population. According to the information disclosed by Yixian, in 2021, Perfect Diary won the first place in the double 11 Tmall makeup category domestic brands. Little Odin and Pink Bear, who participated in Singles' Day for the first time in 2021, both entered the top ten of Tmall domestic makeup.
For the development of the Perfect Diary brand, Yixian E-commerce said that it will continue to focus on brand building and adhere to long-term values. Following the official announcement of Zhou Xun as the global brand spokesperson in 2020, the 2021 Perfect Diary spokesperson family added a new generation of strength actor Liu Haoran, while the brand debuted to support Shanghai Fashion Week, and "Fashion COSMO" launched a series of innovative content focusing on the beauty of Chinese women, as well as the "Beauty Creation Life" public welfare makeup training class, etc., brand awareness and reputation continued to be improved. According to data from an independent third-party market research company, the net promoter value of Perfect Diary brand in 2021 reached 21%, which is twice as high as the second place in the same industry and more than 12 percentage points higher than the second domestic brand. At the same time, Perfect Diary won the "2021 Most User-Biased Patriotic Makeup Brand" issued by "User Says".
Perfect Diary and Fashion COSMO launched the "Chinese Girl" project
The results of brand power acting on the business usually take time to appear, but improving operational efficiency is a mandatory question for every company during this wave of consumption winter adjustment.
Yixian E-commerce's revenue in 2021 was 5.84 billion yuan, and its revenue in 2020 was 5.23 billion yuan, an increase of 11.6% year-on-year, and its net loss narrowed by 42.5% year-on-year. Among them, the operating cost in 2021 was 5.52 billion yuan, and the operating cost in 2020 was 6.05 billion yuan, down 8.7% year-on-year, and the operating efficiency was significantly improved.
The layout of high-end and functional skincare brands may become the second growth curve
It is worth noting that the growth of the e-commerce skin care sector of Yixian is gratifying. According to the data, as early as the early days of its establishment, the founding team of Yixian E-commerce determined the company's development strategy of multi-brand and multi-category.
Since the epidemic, the high-end beauty category has been obvious, especially the skin care category that can better reflect the efficacy. With the improvement of the economic level of Chinese and the awakening of the beauty of the whole people, during the epidemic, high-priced commodities in China have shown a trend of growth against the trend. In 2021, Yixian High-end Skincare completed the acquisition of two high-end skincare brands in France, Coran Li and EVE LOM, to seize this market opportunity. According to the company's external release, during the double 11 period last year, the sales of the e-commerce skin care section of Yixian increased by more than 400% year-on-year, and the total sales of high-end skin care brands exceeded 100 million yuan in the first year of double eleven. Among them, its high-end skin care brand France's Coran Li broke the international record of Tmall, and EVE LOM opened for two hours to sell sales exceeding the total sales of Double 11 in 2020.
Another recent trend is the frequent emergence of "dark horses" in the efficacy skin care track, forming a trend at home and abroad. Dr.WU, a brand under Yixian E-commerce, positioned as a "doctor's specialty", increased its annual sales by 6.7 times year-on-year, and its ace single amygdala essence was the first place in Tmall Double 11 acid products.
R&D ideas of young enterprises Top partners and investment of 100 million yuan
R&D has always been a core driver of the beauty industry, especially in the skincare sector. With the increasing maturity of consumers and the intensification of competition on the brand side, continuous innovation and iteration of products will be an essential core capability for the company's long-term development. R&D, as the source of product innovation, plays a key role in the long-term development of the company.
In 2021, Yixian E-commerce's R&D investment increased by 113.5% year-on-year, exceeding 142 million yuan, accounting for 2.43% of revenue, ranking the head of domestic beauty group and the same level of R&D as the global industry. Up to now, Yixian E-commerce has 118 patents worldwide, and the number of patents has increased by 71% year-on-year, including 39 invention patents (some of which are in the process of transfer).
Huang Jinfeng once publicly stated: "R&D empowers category innovation, and promotes R&D breakthroughs with category innovation." Only with excellent product strength and more scientific and technological beauty achievements can we meet the expectations of more consumers for beauty. ”
In recent years, Yixian E-commerce has continued to invest in building the open R&D system of Yixian Open Lab, and established in-depth cooperation with many well-known institutions at home and abroad, such as the Institute of Chemistry of the Chinese Academy of Sciences, the National Nanopharmaceutical Engineering Research Center of Huazhong University of Science and Technology, Senxin Technology Group and other institutions, with the intention of improving the company's capabilities in basic research, product application and efficacy testing.
At present, Yixian E-commerce has a number of technological innovation and application achievements: including the SmartLOCK Smalo lock makeup technology jointly developed with the Institute of Chemistry of the Chinese Academy of Sciences, which has been applied to the perfect diary "pearl" lock makeup powder, and won the WWD BeautyInc Awards International Beauty Industry Awards Annual Makeup New Product Award. Yixian also cooperated with the Joint Laboratory of the National Nanopharmaceutical Engineering Center to develop raw materials such as salicylic acid nano-wrapped microcapsules for applications in the "DR. WU Compound Acid PeelIng Mask", which sold more than 100,000 pieces on Singles' Day last year, according to reviews, the brand has initially formed a better reputation among oilpox muscle users.
At the 2021 Expo, Yixian E-commerce announced cooperation with shanghai Ruijin Hospital, Cosmex and Intronic, three top scientific research institutions at home and abroad, as well as upstream and downstream cooperation, and officially signed a strategic cooperation, and will continue to carry out in-depth cooperation in solving beauty research problems in the future. Among them, Shanghai Ruijin Hospital and Yixian E-commerce jointly set up a joint laboratory for medical skin care, the two sides will carry out transformation and research cooperation based on the field of medical skin care clinical research and industry-university-research, laying the foundation for the development of the next five years, and the two sides will focus on the field of clinical research on medical skin care in the future to bring consumers more high-quality products that enhance skin health.
Looking back at the development process of domestic beauty in recent years, after experiencing the initial stage of traffic-driven, the industry has entered a product-driven rational growth stage. On the one hand, the mature domestic supply chain provides manufacturing advantage support for domestic beauty, on the other hand, domestic beauty enterprises have a more accurate insight into Chinese consumers, and quickly implement it into brand building and product research and development, meeting the continuous improvement requirements of a new generation of consumers for products and brands, and becoming one of the core competitiveness of domestic beauty enterprises. Under the background of continuous fierce global competition, domestic beauty enterprises represented by Yixian e-commerce have brand precipitation, technical strength, and supply chain platform advantages, and the spring of domestic beauty is worth looking forward to.