Cosmetics sell well with "Douyin Divine Drama" | See Wisdom Research

This year, domestic beauty brands have shown a polarized trend, and this trend is still continuing.

Affected by the 618 promotion siphon effect, the growth rate of the beauty industry in the third quarter slowed down compared with the second quarter, and entered the off-season in September.

Except for a few brands such as Proya, Hanshu, Kefumei, Yuze, etc., which bucked the trend in the downturn and achieved sales growth of more than 30% in Taoji and Douyin, the overall market is still weak.

According to Qingyan data, Tmall Beauty sales in September 2023 were 9.291 billion yuan, down 19.47% year-on-year, of which the skin care category fell by more than 20%.

When the industry's sluggish growth and differentiation coexist, how to crack the growth bottleneck and bring a new round of growth momentum to the beauty market, so that every domestic beauty brand racks its brains.

At this critical juncture, the outbreak of "Douyin Divine Drama" seems to have led the beauty breakthrough problem to a new direction.

Since Han Shu premiered the Douyin short drama "Dress Up with Growth" in February this year, he has achieved triple-digit growth on the Douyin platform for seven consecutive months. This is the envy of all domestic brands in a weak environment, and it also provides all domestic brands with a new idea of "breaking the circle" under the involution.

Douyin out of the circle all rely on "earthy short dramas"?

This year, despite the overall pressure on the beauty industry, the Douyin platform has been growing at a remarkable rate.

According to Cicada Mother data, the Douyin beauty sector continued to grow by 58.9% year-on-year in the third quarter of 2023, with a growth rate of 62.2% in September.

Many beauty brands have achieved considerable growth in Douyin, and the year-on-year growth rate of Shanghai Jahwa and Shangmei shares has even reached triple digits.

(Source: Magic Mirror, Cicada Mother, Tenkaze Trading Company)

The brand with the brightest growth rate this year is Shangmei shares.

This former "Hahan" domestic brand, after online transformation, has grown in Douyin for 9 consecutive months this year, mainly due to the 7-month triple-digit explosive growth of its brand Hanshu.

In September, Hanshu's overall sales on Tmall and Douyin surged 590% year-on-year, with red/white waist gift box sets contributing 34% and 32% of GMV, respectively; Douyin increased by 695% year-on-year, and the monthly sales of red man's waist gift boxes exceeded 100 million yuan.

The turning point of Han Shu's strong growth can be traced back to a series of short dramas launched in February this year in collaboration with Douyin expert Jiang Seventeen, in which Han Shu implanted his star item "Red Man's Waist" into the plot.

Although audiences have mixed reviews of such Douyin short dramas, the "earthy and top" content format does coincide with the demand of young customers for pursuing "N minutes to watch" long videos.

The real integration of the product into the sitcom also improves the sense of realism and look and feel more than simply shoehorning. Driven by the breaking of the circle of short dramas, Han Shu's monthly sales have jumped from 4 or 500 billion in the past to 100 million.

Short drama broadcast results: The premiere of the short drama "Dress Up with Growth" has a total of 16 episodes, and the first episode of the video has 787,000 likes, and the cumulative number of views as of September 26 has reached 650 million, successfully breaking the circle among young customers;

Follow-up in April, May, July and August, other new themed short dramas were launched, with more than 1 billion views.

(Source: Douyin, Gray Dolphin Data, Cinda Securities R&D Center)

Interestingly, Proya said at the performance meeting that after seeing Han Shu's short drama marketing, internal discussions believed that it was inconsistent with brand positioning, so it abandoned the adoption.

However, in late September, Proya also launched two short dramas "Behind the Resistance" and "Fight Back Wife" on the Douyin platform, and promoted the double anti-water milk essence series (for young consumers) and ruby water milk essence (for the first anti-aging) series products in the play according to the age of the protagonists of the two short dramas.

It can also be seen that the current dilemma faced by domestic brands: on the one hand, the industry as a whole has experienced a weak growth in the dividend period; On the other hand, there is no big innovation on the raw material side, and the competition for brands is becoming more and more "volume".

Brands are racking their brains for new ways to break through growth bottlenecks.

When ordinary goods are no longer as hot as in previous years, and anchors are also caught in commercialization controversy, it is becoming more and more difficult to attract audiences, and beauty brands must have some "new things" if they want to break the circle.

Tao continues to come under pressure, but there is no shortage of bright spots

If you only look at the prosperity and growth of Douyin, it is difficult to reflect the whole picture of the industry, then looking at the Taoji platform, the main position of shelf e-commerce, the growth dilemma faced by beauty brands this year is even more prominent.

According to Magic Mirror data, the total sales of Tmall Beauty in the third quarter of 2022 fell by 16.2% year-on-year, of which the decline in the off-season in September further expanded to 25.7% compared with July-August.

In the overall downturn environment, the growth rate of most brands showed a downward trend, but there were still some brands such as Proya, Juzi Biotech and Shanghai Mei shares bucking the trend.

Specifically, the volume of domestic giant Proya in Taoji and Douyin is close, and the growth mainly comes from the makeup sub-brand Caitang, which has a year-on-year growth rate of more than 30% on the Douyin and Taoji platforms, but its revenue scale is still only 1/4 of the main brand. The main brand Proya saw year-on-year growth in September largely flat.

However, it is worth noting that the main brand of Proya launched a new version of Ruby Cream 3.0 in late September, which quickly increased after its launch, and its sales have surpassed L'Oreal's star purple iron eye cream and OLAY anti-sugar small white bottle essence, ranking first in Tmall brand sales and second in Douyin single product sales. According to CICC Beauty's calculations, Ruby Cream 3.0 contributed 12%-22% share of GMV in September.

Another star of Proya's single anti-antibody serum achieved double-digit growth in the three months of the second quarter after completing the upgrade of version 3.0 in April this year.

In view of the success of Double Serum 3.0 and the peak sales brought about by the upcoming Double 11 promotion period in the fourth quarter, Ruby Cream 3.0 is expected to continue its strong growth trend and sales performance in the coming quarter.

Another brand with outstanding performance on the Taoji platform is Juzi Biotechnology, a "new domestic dark horse".

In today's increasingly volatile raw material end, it has successfully occupied the minds of consumers with its differentiated recombinant collagen products, and also driven the strong sales performance of Juzi Biotechnology, after a year-on-year increase of 483% in sales on its Taoji platform during the 618 period.

After entering September, Juzi Biotech is still one of the few brands to maintain strong growth, and its growth is mainly due to the sub-brand Kefumei. Its star single product collagen stick ranked Top1 in the sales list of Maoqi and Douyin, and also drove the brand GMV into the Top9 of Douyin skin care brands.

In addition, in September, Juzi Bio also launched a new product OK water and tons of tons, but these two have not yet started and are still in the early climbing stage.

Among them, the main selling point of tons of tons is no longer recombinant collagen, but hyaluronic acid, positioning moisturizing and hydrating. However, the essence of hyaluronic acid as the selling point on the market has emerged one after another, especially the 4 brands of Bloomage Biologics, which focus on the development of hyaluronic acid raw materials, all use hyaluronic acid as the core, and Juzi Bio also needs to consider how to differentiate itself from competitors in the future.

summary

I believe that most brands have felt the "cold" of the beauty market this year.

The boom of impulse consumption by consumers has passed, and the recent frequent commercialization controversy of "Hua Xizi" has undoubtedly once again weakened the value of anchors to the live broadcast room.

Obviously, it is already difficult for ordinary goods to attract audiences and obtain excess revenue as in the previous two years. Beauty brands must be a little "new" if they want to break the circle.

The success of Hanshu Douyin short drama can be regarded as providing brands with a new idea for breaking the game under the beauty involvement.

Brand breaking the circle and enhancing brand penetration itself is an important driving force for the long-term development of cosmetics brands, and brands need to constantly find new ways to break the circle according to changes in external channels, consumer concepts and needs.

In the short term, as the fourth quarter of Singles' Day approaches, brands that continue to deploy consumer awareness and new product education will achieve better sales performance at key sales nodes.

However, in the long run, the brand needs to keep up with the product power while breaking the circle, and in the end, it is the consumer's recognition of the product to build a long-term competitive advantage, otherwise it is also a temporary time to go out of the circle.