Korean makeup, harvest can't move Chinese girls
This original article is from the WeChat public account: DT Finance (ID: DTcaijing), text: Lin Meishan Editor: Tang Yeqin, data: Lin Meishan, design: Qi Tonghun, operation: Su Hongrui, supervisor: Tang Yeqin.
Skin care every morning and evening is Xiao Chen's ritual sense of thunder every day. However, when she was applying skin care products such as SK-II and Estée Lauder to her skin, innisfree in the corner had already piled up a thick layer of ash.
"When I used to go to school, I used to buy Korean skin care products, such as green tea milk and volcanic mud mask, but many of the products were sticky and thick, the flavor was very heavy, it was uncomfortable to use, and there was no effect." Xiao Chen said so.
Not only Shinochen, but many young people who liked to buy Korean cosmetics when they were students are now abandoning Korean makeup. On social media, you can see many similar voices - "It's not useful at all, the active ingredients are not there" and "Scamming little girls out of money, it's not worth it".
However, while affordable Korean cosmetics are being abandoned by young people, expensive brands such as Sulwhasoo and Whoohou seem to be selling well on Douyin.
Why does this happen? Are Korean cosmetics really not working?
Korean makeup "fades" in China
I don't know when young people's evaluation of Korean makeup changed from praise to complaining - "the face is so oily that you can fry two dishes" and "mosquitoes have to split when they come".
The most intuitive experience of ordinary people for the decline of Korean makeup may be found when visiting the mall, almost no offline stores of Korean makeup brands.
And whether you remember it or not, just in the last decade, Korean makeup has also been popular on the streets. At its peak, Etudes House opened 58 stores in Chinese mainland, and innisfree entered China's second- and third-tier cities at the rate of opening 100 new stores every year, with a maximum of more than 800 offline stores.
On August 8, 2014, the Global No. 1 flagship store of Etude House opened on Nanjing East Road in Shanghai, and the brand spokesperson of the Korean group SHINee sent two members to the scene to cut the ribbon.
On this day, Bai Ning (pseudonym) squeezed into the fan team at the door of the store 7 hours in advance, and although she saw the idol for less than 10 minutes, she was still very satisfied: "It's worth it, the real people have no words, and the fans are also passionate to burst!" ”
The Hallyu fire blew the Korean makeup trend to China, but people did not expect that this wind would leave so quickly. Less than 9 years later, all 58 offline stores in Chinese mainland have been closed, and Tmall's online flagship store has also experienced suspension of operations and product removal.
The rise and fall of Etudi's House is a microcosm of the development of Korean cosmetics brands in China, and in recent years, Korean cosmetics brands such as Filsch Shop, innisfree and Hyun, which were popular in China, have experienced a crisis of large-scale store withdrawals.
On a more macro scale, the export data of Korean cosmetics also confirms the short-lived glory and development crisis of Korean cosmetics in China.
According to data from the Korea Cosmetics Research Institute, South Korean cosmetics exports to China nearly doubled in 2015 and have declined several times since then, with a growth rate of only 15.3% in 2019. Under the influence of the epidemic, the growth rate of Korean cosmetics exports to China was negative for the first time in 2022.
Why is it that Korean cosmetics, which once achieved good results in China, are now struggling to meet the expectations of Chinese consumers?
In makeup, young people no longer follow the Hallyu aesthetic
Looking back at the rise and decline of Korean makeup, a key that has to be mentioned is the shaping of Korean film and television dramas.
A group of people who grew up watching Korean dramas, the aesthetics are largely influenced by Korean dramas, "Full House of Romance" and "My Girl" participated in the formation of the aesthetic cognition of the post-80s and post-90s, and popular Korean dramas such as "Missing You" and "You from the Star" are even more powerful in carrying goods, making it possible to "have a death Barbie powder in everyone's hands".
However, after the THAAD incident in 2016, South Korea's ability to export culture has weakened, and few Korean dramas have reached a higher popularity than before.
In 2022, South Korea's mainstream media "Chosun Ilbo" reported that "Hyundai Motor, Kia Motors and Korean cosmetics have disappeared from Chinese TV dramas."
The data also supports this trend, with popular K-cosmetics brands peaking in Chinese internet in 2015-2017 and then declining. Subsequently, domestic brands such as Perfect Diary and Hua Xizi took over Korean makeup brands and became Internet hits.
To a certain extent, the rise of domestic cosmetics has indeed squeezed out the development space of Korean cosmetics in China.
Since 2016, brands such as Hua Xizi, Perfect Diary, and Kelaki have emerged one after another, which are not only low in price, rich in SKUs, but also aesthetically in line with oriental aesthetics, which can meet the needs of young people for new Chinese fashion makeup.
The status of Korean cosmetics "beauty enlightenment" has gradually disappeared, and the Etude House eyebrow pencil for more than a dozen dollars, the dream makeup crayon lipstick for tens of yuan, and the enigmatic air cushion that is not more than 100 yuan, etc., once became a must-have for the student party because of its high cost performance, and now it has been overwhelmed by domestic products on the major sales lists.
From the market share data, it is also clear that the survival status of various brands in China.
DT Finance consulted Euromonitor International Database and learned that among the top 20 brands in China's makeup market share in 2022, there are a total of 6 domestic brands, namely Hua Xizi, Perfect Day, Kazilan, Kelaki, Mao Geping, and Tangerine. The only Korean brand on the list, 3CE, was acquired by L'Oréal Group as early as 2018.
From the perspective of changes in brand market share, the market share of domestic beauty brands has increased in recent years. From 2016 to 2022, the market share of the top five product brands increased from 9.5% to 15%.
Among them, Perfect Diary and Hua Xizi, born in 2017, have surpassed international brands such as Chanel and Estée Lauder, which have been in China for decades, and have become the two local brands with the highest market share in beauty. In contrast, the top Korean brands such as Dream Makeup, Laneige and innisfree have fallen behind.
In terms of skin care, Korean skin care products have no irreplaceable advantages
Not only is makeup "abandoned", but the once-best-selling Korean skincare products have not kept up with the needs of young Chinese.
In recent years, the concepts of ingredient skin care and efficacy skin care have become very popular, and data from iMedia Consulting shows that 53.9% of the factors considered by Chinese consumers when buying cosmetics in 2021 chose product ingredients, exceeding the proportion of choosing brands, user evaluations, and celebrity goods/endorsements.
Domestic skin care brands have noticed the needs of consumers, conforming to the market and leading the trend of precision skin care, Proya's double anti-antibody essence with the concept of "morning C and evening A" skin care, Winona has opened up a subdivision track for people with pan-sensitive skin, and mechanical products such as Shierjia and Fuqing are also very popular.
In contrast, the popular Korean affordable skin care products in the past are still focusing on basic functions such as hydration and moisturizing, and natural plant ingredients are preferred in ingredients, such as calendula extract, Spring Rain Honey Mask, etc.
Skin care products without clear efficacy are easy to give the impression of "no work", as Xiaohongshu user @YuballOrange said, "a bunch of plant extracts are easy to aggravate the chance of sensitive skin allergies, and there is no effect, it is good to do the most basic hydration and moisturizing without any big problems."
And even the innisfree little green bottle that has been iterated to the fourth generation is difficult to get rid of the evaluation of "chicken ribs are useless", "It claims to achieve antioxidant effects with high concentration of green tea extract, but the effect is clear soup and low water, use it to do the most basic hydration, and don't hope for any other effect."
Can Korean high-end skin care products hold the Chinese market?
When Korean makeup brands have withdrawn from China, Amorepacific has said that it will focus on high-end and online fields in the Chinese market in the future, and LG Life and Health Group also said in its financial report that it will enhance the competitiveness of high-end brands in China.
Two years ago, some Korean high-end skin care products were conquering the Chinese market through live broadcast rooms, the most typical examples being LG's Whoo and Amorepacific's Sulwhasoo.
Feigua data shows that in 2022, Douyin Double 11 promotion, Whoo will become the first in sales in all categories; On the eve of Double 11 in 2021, Sulwhasoo ranked first in the GMV list of beauty brands in the pre-sale period of Douyin's Double 11 with a single live broadcast of 70 million yuan. However, behind the bright data, there are still many problems with the brand.
The first is an over-reliance on large items.
ECdataway data shows that during the pre-sale period of Double 11 in 2020, the pre-sales of weather dan sets accounted for more than 95% of the total pre-sales after Whoo, and the Sulwhasoo Nourishing Skin Gift Box also accounted for about half of the pre-sales of the whole brand.
Only popular items are hot, which to a certain extent also means that there are not many products that can be hit. For example, after mentioning Whoo, many people only have weather pills in their minds, and when it comes to Sulwhasoo, people only think of nourishing muscle gift boxes, which is actually not conducive to the long-term development of the brand.
Not to mention that both products have a history of nearly 20 years, and the products are still based on the concept of yin and yang harmony, focusing on traditional Korean secret recipes, and lack of eye-catching iterative upgrades.
In addition, the outstanding results during the promotion period are also easy to overlook the fact that the brand's usual sales performance is relatively weak.
According to Feigua data, from June 2022 to May 2023, Whoo only won the first place in the sales of Douyin beauty and skin care brands in the month of 618 and Double 11, and in the node without a big promotion, Whoo's sales ranking showed a downward trend.
And Whoo's "pre-exam evil supplement" is limited to Douyin, and it is not so smart on other platforms. According to Magic Mirror market intelligence, Whoo's sales performance on Taobao Tmall has been stable for a long time at about 20.
Although on Douyin, Whoohou has achieved certain results through @Big WolfDog Zheng Jianpeng & Yanzhen couple, @韩国媳妇大璐璐, @呗呗兔 and other head and waist anchors, but the best-selling of products largely depends on overly low prices, which is difficult to sustain in the long run.
Feigua data background shows that in this year's Douyin 618 Good Things Festival beauty brand list, Whoo's sales ranked 5th, behind Helena, Estée Lauder, Jimeng and Lancome, while Sulwhasoo's sales have fallen to 143rd.
The efforts of mid-to-high-end brands have not changed the decline in the performance of Korean cosmetics in the Chinese market.
LG Life & Health reported that in the first three months of 2023, sales in the Chinese market fell by 14.1% year-on-year. Amorepacific's Q1 2023 financial report also said that sales in the Asian region fell by more than 40% in China alone, mainly due to weak demand for its products by Chinese consumers and the restructuring of offline channels.
Write at the end
Korean cosmetics noticed the changes in the Chinese market and began to look for new growth points, this time they set their sights on North America.
AMOREPACIFIC NOT ONLY ACQUIRED THE AMERICAN SKINCARE BRAND TATA HARPER LAST YEAR, FOCUSING ON THE CONCEPT OF PURE SKINCARE RESPECTED IN EUROPE AND THE UNITED STATES, BUT ALSO OFFICIALLY ANNOUNCED BRITISH ACTOR TILDA SWINTON AS THE GLOBAL SPOKESPERSON OF SULWHASOO THIS YEAR. LG Life and Health CEO Li Zhengai also emphasized in his speech at the beginning of the year that the next growth market is North America.
Judging from the results, the layout of Korean cosmetics in the European and American markets has reaped certain results. Amorepacific Group reported that in the first quarter of 2023, sales in North America increased by 80% year-on-year, and sales in EMEA, including Europe, Russia, and the Middle East, increased by 94% year-on-year. In the first quarter of this year, LG Life Health's North American sales increased by 21.1% year-on-year.
However, it is difficult to ignore that China is still the largest overseas market for Korean cosmetics, accounting for more than half of Amorepacific Group's Asian sales, and more than 1/3 of LG Life Health's overseas sales.
Although Korean cosmetics are trying to reduce their dependence on the Chinese market, according to the Korea Herald, Amorepacific insiders still said, "We will not 'give up' the Chinese market, which will remain a key demographic in our cosmetics business for years to come." ”
From the perspective of Chinese customers, if Korean cosmetics want to keep up with the pace of consumers, it must start from the ingredients and effects that people care about, so that it is possible to open up a territory on a variety of shelves.
And this seems to be a long way to go for Korean makeup.
Resources:
1. Daily economic news, can't hold up: beauty brand "Etude's House" closes all offline stores Chinese mainland 2021.
2. 朝鲜日报, "Hyundai Motor Company, Kia and Korean Cosmetics Have Disappeared from Chinese Dramas" [Wang Ant Research Institute], 2022.https://www.chosun.com/economy/money/2022/02/03/NRDY5GAOTFHVRFHBTDFS4THFRM/
3. Orient Securities, in-depth report on the color cosmetics industry: the track prosperity bottoms out, and the rise of domestic makeup brands accelerates, 2023.
4. LG H&H, 1Q 2023. Results.http://www.lghnh.com/upload/invest/attach_file_20230427154427732.pdf
5. AMORE PACIFIC GROUP, 1Q 2023 Earnings Release.
https://www.apgroup.com/int/en/investors/amorepacific-group/ir-reports/quarterly-results/__icsFiles/afieldfile/2023/05/02/AMOREPACIFIC_Group_1Q23_EN_vff.pdf
6. The Horea Herald, Amorepacific pivots away from China, 2023. https://www.koreaherald.com/view.php?ud=20230302000757