Xu Liqing, a reporter of this newspaper, reported from Beijing
In the spring, a new journey in the beauty industry has begun.
Recently, after handing over their report cards, various beauty brands have been intensively opening new strategic layouts and reforms. The reporter of "China Business News" interviewed a number of beauty companies and learned that improving quality and optimizing experience have become the next focus of brand owners. "We track the latest market trends and consumer needs, and observe that the current changes in consumer demand are presented as quality, mid-to-high-end, and excellent experience." When referring to the current changes in consumer demand, the relevant person in charge of Proya said.
The reporter learned that brands are looking forward to the beauty market in 2023. The recovery of consumption and the upgrading of consumption will undoubtedly bring benefits to the industry, especially in the context of the national tide, through the traffic blessing of online anchors, local beauty brands have developed rapidly. However, with the continuous deepening of the layout of international brands, new brands continue to emerge, and industry competition is also intensifying.
Bai Yunhu, general manager of Shanghai Yue Makeup Information Technology Co., Ltd., said that at present, consumer demand has changed, combing the performance and past development path of international brands, it can be seen that beauty cannot blindly fight a "price war", and the underlying logic of going to the middle and high end is still quality. At the same time, beauty brands, especially local brands at this stage, must not enter the traffic "trap".
"Volume Marketing" Transforms into "Roll R&D" and "Volume Efficacy"
Compared to the previous three years, the cosmetics market is more active this year. According to retail sales data released by the National Bureau of Statistics, the total retail sales of cosmetics from January to February were 65.6 billion yuan, an increase of 3.8% year-on-year, which was also the first positive growth since July last year. In the new consumer environment, the development of the beauty industry shows new trends and changes.
"Looking at the future development trend of domestic beauty from the three aspects of product, supply chain and consumer insight, we can observe the trend of domestic brands changing from 'roll marketing' to 'roll research and development' and 'roll efficacy'. Specifically, domestic brands are increasing R&D investment to create competitive and high-quality products through intellectual property rights, R&D teams, innovation achievements, etc.; It is also building a more agile supply chain to help companies anticipate and effectively respond to future uncertainties and systemic shocks. At the same time, compared with international brands, domestic brands have insights closer to Chinese consumers. The relevant person in charge of Proya said.
For a long time in the past, domestic beauty products have occupied the minds of consumers by relying on large-scale marketing, and from the current stage of the actions of beauty companies, "research and development" has attracted more and more attention.
The reporter learned from Proya that under the trend of quality consumption, Proya continues to increase R&D investment, its R&D expense rate in the first half of 2022 is 2.33%, the parent company's half-year R&D expense rate is 4.69% (3.76% in the same period of 2021), and the R&D expense rate in the first three quarters of 2022 is 2.41%, and R&D expenses are 95.37 million yuan.
This is also manifested in another domestic brand, Bethany , the relevant person in charge of the company revealed to reporters that in 2023, the new central factory of Bethany with a cost of nearly 500 million yuan has been officially completed and put into operation on March 13 this year. It will not only greatly improve the efficiency of the group's supply chain, reduce the dependence on some suppliers and manufacturers, improve the internal closed loop of the supply chain, but also respond to the national development concept of green emission reduction.
Practitioners may be most impressed by why this change has occurred. The relevant person in charge of Shanghai Jahwa said that the changes in the concept and behavior of beauty consumers, changes in consumption channels, and changes in segmentation and personality needs have a certain enlightening effect on the future development direction of enterprises.
Another reason for "volume research and development" may be related to the rapid development of the subdivision track. Focusing on the product segmentation track, we can find that the efficacy skin care track may become an arena for brand competition.
According to data from the Prospective Industry Research Institute, it is expected that by 2025, the market size of functional skin care products will grow to 125 billion yuan. According to public information, at present, domestic new brands, old brands, and foreign big brands have come to "grab" the efficacy skin care track. In recent years, Winona has become a new brand, "the first domestic hyaluronic acid stock" Bloomage Biotechnology has launched a number of functional skin care brands, and Freda, which is also a hyaluronic acid manufacturer, is not to be outdone, and launched efficacy-based skin care brands such as Yilian and Dr. Yaoer.
In this regard, the relevant person in charge of Yixian e-commerce told reporters that the momentum of subdivisions such as efficacy skin care is strong. The development of skin care categories also tests the company's R & D capabilities, brand building capabilities, and channel capabilities. In the past year, the cosmetics industry has accelerated into the era of brand intensive cultivation and focus on quality, and in the past two years, the attention of domestic beauty brands to research and development has visibly increased, and the industry has entered a new stage of competition for "internal strength".
Diverse brand logic
The reporter found that while companies are increasing investment in research and development, different beauty companies have made different choices in brand strategy. Some focus on the implementation of large-item strategies, while others choose multi-brand development.
In terms of the big item strategy, looking back on the past few years, there are too many familiar products that have become synonymous with a certain effect or category, such as Estée Lauder Small Brown Bottle, Clarins Double Anti-Serum and other products, fully demonstrating the strong potential of large items.
This is also reflected in domestic brands. It is understood that since the launch of the large-item strategy in 2020, Proya has successively created large items such as ruby essence and double antibody essence. This strategy has also made Proya's performance impressive. Recently, Proya released its main operating data for January-February 2023. After preliminary calculation, during the reporting period, the company achieved a total operating income of about 790 million yuan, a year-on-year increase of about 25%; The net profit was about 80 million yuan, a year-on-year increase of about 33%.
For the strategy of large items, Bai Yunhu believes that "traditional beauty consumption habits are linked, such as the complete use of water milk or eye makeup. But now online sales have become the main position, especially when the anchor introduces the product in a limited time, the efficiency of using a single product is higher, and the price is lower than that of the set gift box, which can stimulate consumers to buy. ”
"The company's big single product must not be completely independent, but it has a leading role in a certain series, and other products are also good, and it can gradually expand to eye creams, creams, masks, and water milk categories, such as from essence. In addition, large items need to be supported by scientific research and innovation, such as Estée Lauder small brown bottles, etc., which are constantly upgraded and iterated through technological research and innovation. Bai Yunhu said.
Mr. Gao, an industry insider, told reporters that a large item with potential should have three characteristics. The first is uniqueness, where a product has a unique efficacy, formulation or design to meet the specific needs of consumers. The second is reproducibility, that is, the manufacturing process and raw materials of the product can be stably copied to ensure the quality and consistency of the product. Finally, the brand itself has established a certain reputation and credibility in the market, and consumers have a certain recognition and trust in the brand.
In addition to adhering to the strategy of large items, there are also companies that choose multi-brand development. The relevant person in charge of Bethany told reporters, "In the future, Bethany Group will continue to explore the deep brand accumulation and expand the infinite possibilities of multi-brand development." ”
Yixian e-commerce, which also follows a multi-brand strategy, is the makeup + skin care products business. From the perspective of the commercial territory of Yixian e-commerce, in addition to the makeup brand Perfect Diary, it has also acquired skin care brands such as DR.WO, EVE LOM and Galénic, France. From the performance point of view, the revenue of the skin care business in 2022 increased to 1.24 billion yuan, an increase of 44.8%, accounting for 33.5% of the total revenue.
The relevant person in charge of Yixian e-commerce told reporters that for Yixian e-commerce, skin care and makeup are equally important business, in the public, mid-end, high-end of makeup and skin care, the company hopes to have the corresponding layout of the brand, so as to serve consumers of different ages and provide them with more three-dimensional beauty solutions.
In fact, the strategy of multi-brand parallel development also has a certain underlying logic. Deng Zhidong, an expert in industrial economic investment and general manager of Hainan Boao Medical Technology Co., Ltd., told reporters that the current explosive growth of the domestic beauty market is largely driven by marketing, compared with international brands, local brands are still in a relatively preliminary stage of development, the market product categories are not rich, market heat, recognition needs to be further cultivated, and core hard core technology is lacking. In the future, it is necessary to cultivate local cutting-edge brands and improve the market competitiveness and overseas ability of local brands.
Fast versus slow
In fact, looking back at the beauty industry in recent years, an important point of the rapid rise of local brands is the boost of e-commerce platforms, especially the traffic blessing brought by live streaming and super anchors.
However, Bai Yunhu told reporters that traffic can bring sales, but brands cannot rely too much on channel marketing. Planting grass, live streaming, low-price drainage, and creating explosive models are the consistent practices of the beauty industry in the past, but how much "retention" traffic can be converted into is a problem that enterprises need to consider. Brand building is not achieved by a temporary low price, but requires slow efforts around products and technologies.
Obviously, after fast efforts such as traffic boost and marketing activities, the beauty industry is slowing down, not giving up marketing to completely transform, but taking into account marketing and R&D, service, etc.
The most intuitive embodiment of this slowness is that enterprises continue to integrate digitalization and intelligence into the development of the beauty industry, or use high technology to bring better services to consumers, or do a good job in consumer maintenance through digital operations.
The reporter noted that Shanghai Jahwa debuted cutting-edge scientific and technological equipment such as AI customization, AGEs fluorescence scanning probes, microfluidics, and capsule frequency radiometers at the first 2022 World Design Capital Conference hosted by the Shanghai Municipal People's Government in September last year.
The relevant person in charge of Shanghai Jahwa told reporters, "The company has developed a 3D skin tomography scanner, which can reflect the morphological changes from the epidermis to the dermis structure through the three-dimensional reconstruction of the structure of each layer of the skin, and achieve real-time, high-resolution, non-invasive detection." In the field of smart skin care, Shanghai Jahwa has also made a bold attempt - capsule radio frequency meter. ”
There are also companies that enhance consumer stickiness through digitalization. The relevant person in charge of Bethany told reporters that at present, the private domain traffic pool (including the combination of private domain and public domain) that the company has built includes the "counter service platform" and "mini program mall" built by its ace Winona based on WeChat mini programs, public accounts, video accounts, WeChat communities and offline shopping guides.
For the above situation, Bai Yunhu believes that what is needed to be a brand is to polish good products, establish their own main position, repeatedly contact users, communicate deeply with users, and establish stickiness. In particular, local beauty brands need time to settle and become a long-term advocate.
"In the process of optimizing the user experience, it is necessary to use digital methods to mine, such as AI artificial intelligence, Block Chain blockchain and XR virtual and real interaction as the blessing of the underlying technology, the offline channel scene, in the form of digital twin reproduction to achieve online reinvention, can provide consumer users with 3D spatial experience and interaction anytime, anywhere." Bai Yunhu said.