Recently, the makeup brand "Floating Air Fomomy" announced its closure, which attracted widespread attention. This sudden news makes people wonder, even such a brand can go bankrupt?
Fomomy's announcement was released on Tmall's official flagship store with the headline "Not Marketing, We're Really Closed," an unusual announcement that piqued consumer interest. In the announcement, Fomomy candidly explained the reason for their collapse.
According to the announcement, Fomomy was founded in 2018 with the initial goal of becoming a sweet and stylish makeup brand. They used to have several items that topped the Tmall and Douyin sales charts. However, Fomomy's makeup products are priced below 100 yuan, and many consumers complain that in addition to the price is inconvenient, the packaging of floating products is not exquisite enough, and the color of lip stain is not durable enough. At present, there are only 8 products left on the shelves of the floating Fomomy flagship store, and the highest sales are only purchased by more than 2,000 people.
Fomomy revealed in the announcement that they have been looking for a new way to survive in the past six months, but watching the amount of debt gradually increase to nearly 10 million yuan, they finally decided to stop operating, which is a more responsible choice for consumers and the team. They admit that starting a brand is actually a road of no return. As a small team without financing, they have gone further than they ever imagined.
Some media learned from the customer service staff of the official flagship store of Fuqi Fomomy that the business downturn forced Fuqi Fomomy to finally go bankrupt. Analyst Jiang Han believes that "Internet celebrity makeup" brands like Fuqi usually use large-scale marketing strategies, so although the profit level may not be high, the marketing expenses are high, which can easily lead to problems. He added that due to changes in market demand and consumer buying habits, the marketing strategies and product quality of some affordable makeup brands could not meet the needs of consumers, resulting in poor sales and eventually bankruptcy.
In sharp contrast, the mid-to-high-end cosmetics market has grown at a considerable rate in the past two years. According to the data, the share of high-end makeup products in the domestic market has gradually increased, and the growth rate of the high-end beauty market has reached 20% to 30%, far exceeding the growth rate of the mass beauty market. Euromonitor data shows that the top three domestic high-end cosmetics markets are occupied by L'Oreal, Estée Lauder and LVMH, with market shares of 18.4%, 14.4% and 8.8% respectively.
This series of collapse of makeup brands has triggered deep thinking in the industry. The competition in the makeup market is fierce, and if brands cannot find a stable profit model and rely too much on marketing to increase sales, it is easy to fall into a loss and eventually become unsustainable. Looking back on the past few years, some emerging domestic makeup brands such as Perfect Diary, Hua Xizi, Orange Flowers, etc., have gradually emerged under the impetus of financing and become the leaders of the industry, while those unknown small brands have gradually disappeared in the wave of the market and eventually had to go bankrupt.