A few days ago, Perfect Diary's parent company, Yixian E-commerce, issued an announcement that because the company's stock price continued to fall below the US stock trading price compliance standard of 1 US dollar, it received a letter from the New York Stock Exchange, informing it that if Yixian E-commerce could not make the stock price and the average stock price rise to more than 1.00 US dollars in the next 6 months, the New York Stock Exchange would start the suspension and delisting procedures.
Founded in 2016 and listed on the NASDAQ in November 2020, Yixian E-commerce has makeup and skin care brands such as Perfect Diary, Little Odin, Completed Heart Selection, French Coran Li, EVE LOM, Pi Ke Bear, Yi An And. Perfect Diary has been a thorough marketer since its inception. Aiming at the opportunity of the rise of social e-commerce and content marketing, it began to carry out a large number of launches on platforms such as Xiaohongshu, Douyin, and B Station, and also invited many first-line stars and phenomenon-level anchors such as "Taobao Brother" Li Jiaqi to carry goods, which began to grow explosively.
In 2019, Perfect Diary became the first domestic brand in history to top the Tmall Double Eleven makeup list. At that time, a survey by Tmall showed that Perfect Diary was the second favorite domestic brand of the post-00s, second only to the first place Huawei.
Perfect diary marketing model, focusing on marketing investment, in 2021, Yixian E-commerce under the gross profit margin of 66.8%, marketing expenses rate of up to 68.6%, Yixian E-commerce in 2020, 2021 sales and marketing expenses of 3.412 billion yuan and 4 billion yuan, respectively. Some insiders even joked that Perfect Diary is working for KOLs. According to the financial report, the sales and marketing expenses of Yixian E-commerce in 2020 and 2021 were 3.412 billion yuan and 4 billion yuan respectively, showing an upward trend. The gross profit margin of international first-line brands is generally between 70% and 80%, and the marketing expense rate is around 30%.
From 2020 to 2021, the company began to experience huge losses, -2.688 billion yuan and -1.547 billion yuan, respectively.
Zhou Dewen, chairman of the board of directors of Zhonghe Zhengdao, said: Yixian E-commerce is still quite successful in brand building, and its brand Perfect Diary is quite attractive in both marketing and product design. In the price system of the product, it is also relatively close to the people and is deeply loved by young people. In terms of channels, brands began to constantly test the waters offline entities and enrich product sales channels.
However, while brand awareness is rising, market competition has also begun to be fierce, and the company's over-investment in marketing is indeed a bit of a priority. The high point of marketing expenses in the early stage of development of enterprises is understandable, but once the enterprise is stable, what should be considered is how to achieve profitability as soon as possible, and the general marketing expenses of mature enterprises are controlled between 20% and 30% of the turnover.
Perfect diary started from OEM and OEM, product quality can not be really controlled, followed by insufficient product research and development, product quality can not match the rising brand, will feedback to the market, word of mouth will naturally decline, and eventually damage the company's brand image. The real core competitiveness of enterprises comes from products, product quality is the basis of corporate brand, if product quality can not be guaranteed, then corporate brand is also like "castle in the air".
From the data, we can see that Perfect Diary is also increasing research and development year by year, improving product competitiveness, and there are opportunities in the future.
In Zhou Dewen's view, product quality is the lifeline of the enterprise, and the biggest crisis of the enterprise comes from the quality of the product. Nowadays, information spreads widely and quickly, compared with other crises, enterprises that encounter product quality crises, if the enterprise is not proper, the consequences are very serious, and even many enterprises have closed down.