LVMH's makeup brand Benefit has failed to go online, and the makeup field has reappeared in the "ebb period"

Dandelion Blush, Anti-Hole Elite Face Primer, Waterproof Eyebrow Pencil...... Knowing that Benefit will completely shut down online channels in China, many netizens recalled its flagship product and wondered why it withdrew.

As a high-end beauty brand under LVMH, Benefit was once the world's largest eyebrow pencil brand. In recent years, there has been a trend of "retreat" in the Chinese market, following the closure of offline counters in many places in 2021, and recently announced that it will close its three online flagship stores on January 28.

On January 4, Chen Jia, an independent international strategy researcher, said in an interview with a reporter from Dahe Finance Cube: "In the past five years, with the termination of cooperation with major platforms and the unfavorable expansion of online channels, Benefit's digital transformation, especially online operations, has fallen behind. In response to the rapid development of the domestic platform economy, Benefit's "exit" is not an isolated case.

Withdrawal: Shut down Tmall, Douyin, and JD.com Benefit's flagship stores

"Benefit is going to close the store, and the university's favorite makeup brand feels a little farther away from youth. A netizen sighed on social platforms.

The reporter of Dahe Finance Cube learned from the official flagship store of Benefit on Tmall that Benefit issued a "store closure announcement": the official flagship store of Benefit is about to end its operation, and the store will continue to accept new orders until 23:59 on January 28, 2024. The customer service channel and membership benefit redemption will be open until the above time point, and the membership will also expire after the store ends operation.

At present, Benefit's Tmall and JD.com flagship stores are still selling normally, but many products have added the "only 1 piece left" logo. It is worth mentioning that as early as 2021, Benefit announced the closure of offline counters in Beijing, Shanghai and other places, and now according to Benefit's official mini program, Benefit has only 4 offline counters left in Chinese mainland, distributed in Shenzhen, Chengdu and Kunming.

The closure of online channels does not mean that Benefit's products will be withdrawn from the Chinese market. The official customer service of Benefit told Dahe Finance Cube: "Benefit is adjusting its business scale and development focus in Chinese mainland, and consumers can continue to go to Sephora's offline stores in China and Sephora's online official flagship stores on various platforms to buy Benefit products." Sephora has a Benefit counter. ”

Sephora and Benefit belong to the same LVMH group, and Sephora's sales channels are relatively stable compared to Benefit. The reporter inquired about the Sephora Tmall flagship store and noticed that there were Benefit-related products in the store, and its official customer service said that Sephora, as a cosmetics retailer, sold products are provided by major contracted brands or regular agents, and the products are the same channel as the counter.

According to the Benefit mini program, there are currently 14 stores in Shenzhen where Benefit products can be purchased, of which 12 are Sephora stores. The reporter called Sephora's Shenzhen Huangting Plaza store, and its staff said that there is a Benefit counter in the store for normal purchases, and the closure of online channels will not affect the counter.

Adjustment: LVMH first invested in a domestic children's skincare brand

Although Benefit's products have not withdrawn from the Chinese market, the shrinking of its self-operated channels has had a significant impact on its revenue and brand building. This resolute choice to withdraw from online may be its "helpless move" to cope with the changes in the domestic beauty market.

In 1976, the first benefit eyebrow bar was established in San Francisco, USA, acquired by LVMH in 1999, and entered the Chinese mainland market in 2007, opening its first store in Shanghai. Subsequently, products such as dandelion powder and anti-hole primer were launched, which are still favored by consumers today. In 2017, Benefit officially entered the Tmall flagship store to expand its online channels.

"Multinational companies have indeed encountered a lot of problems in adapting to the new format of China's platform economy, and Benefit is not alone. Chen Jia said in an interview with a reporter from Dahe Finance Cube that after experiencing initial rapid growth in China, Benefit has fallen behind in digital transformation, especially in online operations. The withdrawal of "Benefit" does not necessarily lose in product power, and in the face of the rapid development of the domestic platform economy, it is difficult to take into account product power and marketing power.

As a long-established high-end beauty brand, Benefit relies more on polishing classic products to expand its competitiveness, but as more and more cutting-edge beauty brands enter the market, this advantage is gradually weakened. For example, the price of Benefit Waterproof Eyebrow Pencil is 235 yuan per eyebrow pencil, with a net content of 0.08g, and some cutting-edge beauty brands with low-end eyebrow pencils are as low as 9.9 yuan per pencil, and there are also medium-priced eyebrow pencils, and the products can be more selective. In terms of marketing, Benefit is not an opponent of local brands such as Hua Zhizhi.

The reporter noted that in December 2023, LVMH's private equity fund L Catterton exclusively invested in China's local children's professional skin care brand Turtle Dad, and the first round of funds will be used for brand building and channel expansion. In addition, L Catterton has also invested in a number of Chinese companies, including Marubeni and beauty brand blankme.

Fu Jiapeng, an industry insider, told Dahe Finance Cube: "As the cosmetics market with the greatest possibility in the future, all brands will not easily give up the Chinese market. Before the self-reinvention was completed, LVMH clearly seized a highly profitable market and made strategic adjustments. ”

Regarding Benefit's future planning in the Chinese market and other issues, the reporter sent an interview outline to Benefit, but as of press time, no response has been received.

Trend: In 2023, many domestic and foreign makeup brands will show a "retreat" trend

According to iResearch's statistics, in 2023, 7 overseas makeup brands will withdraw from the Chinese market, 5 domestic makeup brands will go bankrupt, and cutting-edge makeup brands will have a "low tide period".

For example, in December 2023, Korean cosmetics brand Chunyu, which claims to "sell 100 million masks a year", announced that its stores would stop selling and withdraw from the Chinese market, while Japanese beauty brand Qian Shili and South Korean brand BBIA closed their overseas flagship stores on Tmall.

In terms of domestic makeup brands, in 2023, the official announcement of the withdrawal of the national style makeup brand Moran, the announcement of the closure of the cutting-edge beauty It's Focus Coix, and the announcement of the closure of the store of Sensitive Skin Care Aunt Ru.

At the same time, in 2023, international beauty giants such as LVMH and Unilever will frequently streamline their businesses through acquisitions and sales, accelerate the "blood change" of new personnel, and attach importance to digital operations and Chinese market operation experience.

According to the National Bureau of Statistics, in the first half of 2023, the mainland cosmetics industry will grow by 8.6% year-on-year, and the total retail sales of cosmetics are expected to exceed 500 billion yuan in the whole year, ushering in a new round of growth compared with the short-term addiction in 2022.

The domestic beauty consumer market has also seen new changes, such as consumers' demand for makeup products has shifted to texture, finish, maintenance function and brand value, and on social media platforms, the ingredient efficacy of "biological + skin care" has become a new hot spot.

According to the "2023 Oriental Beauty Valley Blue Book (Cosmetics Industry)", the competition point of the beauty and skin care industry has shifted to the field of biological research and development and raw material compounding, and the "hard power of science and technology" has become one of the keys to whether the brand can maintain its competitive advantage in the future.

"Compared with the fading out of the market, some OEM foreign or domestic products have expanded their market share by reducing supply chain costs and increasing the proportion of platform marketing, and it is difficult to determine the impact of this trend on the domestic beauty industry. Chen Jia also emphasized that since well-known overseas makeup brands have withdrawn, the product power of domestic products must be able to keep up and fill.

见习编辑:李文玉 | 审校:陈筱娟 | 审核:李震 | 监审:万军伟