Recently, the "2023 Beauty & Personal Care New Incremental Track Report" was released, discussing the three new tracks in the beauty and personal care industry. As one of the new tracks, the functional skin care track has increased from 6.9 billion yuan in 2016 to 28.3 billion yuan in 2021, demonstrating its continuous vitality, making breakthroughs in breaking the monopoly of overseas brands, innovating growth opportunities, and digging deep brand moats, bringing positive signals to the overall decline of the cosmetics market in 2022, and also bringing expectations for the new consumption cycle.
The picture is from the "Functional Skincare Trend Insight Report Enabled by Technology"
Break the foreign monopoly and domestic brands attack the high-end track
Functional skin care products, roughly divided into three categories: efficacy skin care products, dermatology-grade skin care products, and medical dressings, of which the largest proportion of functional skin care products are through experimental or clinical verification, with certain efficacy and safe skin care products, dermatology-grade skin care products are suitable for skin sensitivity and other problems of care products, and medical dressings belong to the category of medical devices.
Looking back at the development of the domestic functional skin care market, it is also a race and quality competition between domestic brands and overseas brands, which was started by overseas brands and broke out in the breakthrough of domestic brands. In 1998, international brands such as Vichy and Avène entered China, opening the blue ocean market of China's functional skin care products. From 2016 to 2021, the functional skin care market increased from 6.9 billion yuan to 28.3 billion yuan.
According to data from the Toubao Research Institute, the market share of domestic functional skin care brands increased from 10.7% to 27.3% from 2014 to 2022. And since 2017, the growth rate of China's functional skin care market has always been higher than the overall market growth rate of skin care products, and the rise of its Chinese brands has contributed a lot, domestic brands are breaking the monopoly of overseas brands, and the functional skin care track has shown a trend of localized development.
In 2018, Bloomage Biotech, which started with bioactive raw materials, announced that it would make every effort to create "functional skin care products", and under the strategic guidance of "multi-brand and multi-channel", it ran out of the four core brands of Runbaiyan, Quadi, Mibel and BM Muscle Live, becoming the head main player on the track of functional skin care products, and jointly provoking the rise of domestic products with Bethany , Proya, Shanghai Jahwa and other enterprises.
Nowadays, domestic functional skin care products are no longer the "stand-in" of international brands, but have turned to the high-end track. In the 2022 Double 11 Cat Double 11 beauty and skin care category, Proya, Winona, Quadi, and Nature Hall ranked among the TOP20, and Runbaiyan entered the 100 million yuan club in the three major e-commerce channels of Tmall, Douyin and Kuaishou. Among them, Proya Morning C and Evening A, Runbaiyan Barrier Conditioning Second Throw, Quadi "Blue Throw" Essence, Winona Special Care Essence, etc. have achieved a strong position in the high-end category track with a stronger sense of value, and consumers also realize that domestic products are advancing with strength.
According to data from the General Administration of Customs, the cumulative import volume of beauty cosmetics and toiletries in the first 11 months of 2022 fell by 11.2% compared with the same period last year, reflecting consumers' support for domestic skin care products, and domestic brands have also gained greater consumer trust.
Heavy scientific research investment provides sufficient momentum for the development of domestic products
Because functional skin care has genes that enhance the efficacy of products, and emphasizes digging deep into scientific mechanisms to pursue safety and efficiency, the R&D cycle and R&D investment are higher than ordinary skin care products. At present, there is a high concentration in the field of functional skin care products, the strong are always strong, observing Bloomage Biotechnology, Bethany and other leading enterprises, "technology" seems to be the main part of the involution.
The data shows that in the first three quarters of 2022, the R&D investment of Bloomage Biologics, Bethany and Proya accounted for 6.42%, 4.37% and 2.41% respectively, of which the R&D expenses of Bloomage Biologics in the first three quarters reached 277 million yuan, a year-on-year increase of more than 40%, Bethany was 126 million yuan, and Proya was 95 million yuan, and the R&D expenses of the three companies ranked at the forefront of the industry.
Heavy warehouse research and development, enterprise scientific and technological strength continues to consolidate. From the perspective of Bloomage Biotechnology, following the enterprise development logic of "scientific → technology→ product → brand", strengthening investment in basic research and applied basic research, it has built six major R&D platforms and the world's largest pilot transformation platform to help the transformation of scientific research achievements. Bloomage Biotech Shanghai Skin Care R&D Center has domestic leading inspection and testing, biology, efficacy evaluation and other technologies; The first "Key Laboratory of Quality Control of Cosmetic Raw Materials" of the State Food and Drug Administration is located in Bloomage Biotechnology; Bloomage Biotech also co-created with Shanghai Dermatology Hospital and other hospitals, participated in the compilation of expert consensus on the clinical application of hyaluronic acid dermatology, and promoted the scientific selection and rational application of hyaluronic acid in dermatology.
R&D personnel of Bloomage Biotechnology
Bethany Winona, based on dermatological theory for product research and development and technological innovation, plant extraction technology is more prominent, and has established R&D centers in Kunming, Yunnan and Shanghai, with a series of unique active star plant ingredients. Proya specializes in highly effective antioxidant and anti-wrinkle technology.
In the cutting-edge technology synthetic biology known as the "new energy" of national cosmetics, Bloomage Biotech has been laid out as early as 2018, and Shiseido, L'Oreal, etc. have also entered the game in the past two years. At present, Bloomage Biotech is the "only" synthetic biology industry chain enterprise in China that integrates the three capabilities of "R&D and innovation capabilities, pilot and industrial transformation capabilities, and market transformation capabilities", which will provide strong support for the innovation of raw materials and terminal products. In 2022, the establishment of the Bethany Center for Synthetic Biology began, and Proya participated in the B round of financing of the synthetic biology innovation and intelligent manufacturing enterprise Zhongke Xinyang. Synthetic biotechnology has allowed domestic brands and international brands to stand on the same line, providing new opportunities for domestic brands to overtake international brands.
From raw materials to terminal product innovation, our own industrial chain escorts quality
In addition to the scientific and technological "ballast stone", based on the advantages of China's manufacturing industry, the efforts of domestic enterprises in the industrial chain provide a strong guarantee for the "efficacy and safety" of functional skin care products.
Taking Bloomage Biotech as an example, it has independent and controllable full-chain operation capabilities from raw materials to consumer terminal products, and actively promotes the application of digital and intelligent systems in the comprehensive quality management system of cosmetics production. In September 2022, Bloomage Biotech won three awards: "National Quality Leading Enterprise in Cosmetics Industry", "National Leading Quality Brand in Cosmetics Industry" and "National Quality Inspection Stable and Qualified Product".
From the demand side, due to the continuous changes in consumer needs, such as anti-aging, anti-wrinkle, skin repair and other skin appeals, and at the same time the improvement of consumer information channel acquisition capabilities, "ingredient party", "efficacy party", "technology party" and so on are gradually born. Based on this, further targeted solutions to skin problems, highlighting product raw materials, technologies and efficacy, have become an important opportunity point in the functional skin care track.
The ability to innovate at the raw material end also determines the competitiveness of the end product. Bloomage Biotech independently develops and produces more than 100 SKUs of cosmetic grade raw materials such as hyaluronic acid, ectoin, and ergothioneine, avoiding being "stuck in the neck" of foreign countries and providing more space for product innovation. In 2022, Bloomage Biocosmetics has new raw materials "hydrolyzed zinc hyaluronate", "hydrolyzed calcium hyaluronate" and "N-acetyl ceramide" completed the filing.
Bloomage Biotech's new hyaluronic acid raw material (partial)
In terms of skin care technology, domestic companies are still constantly raising the height of science and technology, such as Runbaiyan, which specializes in hyaluronic acid skin care, and its creation of INFIHA™ intelligent hyaluronic acid technology, which expands the effect of hyaluronic acid from moisturizing in the past to anti-wrinkle, repair and other possibilities.
In addition, while building product power, domestic products are constantly strengthening the shaping of brand power and forming a unique brand culture and values recognized by consumers, thereby establishing brand barriers. Through the "Beauty Bank Sub-empty Disposal Recycling Program", Runbaiyan turns the recycled sub-empty air control into an education fund, helps rural aesthetic education, and enriches the brand connotation of "focus on love"; The Bethany Public Welfare Fund implements the Hope Project for young people in Yunnan Province in the fields of education assistance and biodiversity conservation; Proya pays attention to the exploration and discussion of women's issues, and attracts widespread attention with a constructive brand attitude.
With the tightening of policy supervision, the continuous standardization of the production quality management of cosmetics, and the country's implementation of the goal of building a "high-end brand" in the cosmetics industry, if enterprises in the functional skin care products track want to achieve sustainable growth, they must not only cash in product power with high-quality scientific research strength, but also provide consumers with positive emotional value, and then stabilize the industry position, in order to establish a solid brand moat in the new wave of consumption, enhance brand influence and competitiveness, and become the leading force of domestic products leading the world.
Source: China.com