"Beauty standout"
"I don't understand, it's still in normal business", Hangzhou Wulin Yintai, which has given birth to a number of beauty "first cabinets in the country" and "first cabinets in the world", is still as calm as ever. On the other hand, rumors that Intime Department Store will be sold have been "stormy in the city".
According to foreign media reports, Alibaba is recently considering selling Yintai Commercial Management Group (hereinafter referred to as "Yintai Retail"), which includes Intime Department Store and Yintai Shopping Center. It is reported that as early as 2016, Alibaba officially became the single largest shareholder of Yintai Retail, and the following year it was privatized and officially incorporated into the "new retail" territory of the Alibaba system.
It is worth mentioning that as a department store established for 26 years, Yintai Retail has been deeply engaged in the cosmetics category for a long time, and has been the largest physical retailer of cosmetics in China for many years. Deng Chaojun, chief operating officer and vice president of Yintai Retail, has previously publicly stated that "Yintai Beauty's revenue is expected to reach 10 billion yuan in 2024." ”
The first mainland department store to be listed in Hong Kong
Looking back on the past and present life of Yintai Retail, it is more like a vivid portrayal of the gradual growth and active transformation of China's department store retail enterprises.
Founded in 1997, Yintai Group is an important part of its business, according to the official website of China Yintai Investment Co., Ltd. (hereinafter referred to as "Yintai Group"), which covers commercial retail, commercial real estate development and operation management, equity investment and other fields.
In November 1998, Yintai Retail's first store and flagship store, Hangzhou Wulin Intime Department Store, was officially opened, located in the core Wulin business district of Hangzhou, with a business area of 350,000 square meters, which is also the "starting station" of Yintai Retail. In 2009, Yintai Retail was the first in the industry to transform into a shopping mall and became the first traditional retail department store to test the waters of e-commerce.
▍In 1998, Hangzhou Wulin Intime Department Store opened The picture comes from the WeChat public account of Intime Department Store
In 2013, Intime Department Store (Holdings) Co., Ltd. officially changed its name to Intime Retail, becoming the first mainland department store to be listed on the Hong Kong Stock Exchange the following year. In 2014, Alibaba made a strategic investment of HK$5.37 billion in Yintai Retail, and the following year became its single largest shareholder by increasing its shareholding. In 2017, Alibaba privatized Yintai Retail, and in the same year, Yintai Retail was officially delisted from the Hong Kong Stock Exchange.
According to the official website of Yintai Group, Yintai Retail currently has three main business operation modes – "Intime Department Store", "Intime Shopping Mall" and "Intime Net". As of August 2023, Yintai Retail has 61 stores across the country, including shopping malls and department stores, with more than 4,000 cooperative brands and a total number of counters of more than 10,000, according to Deng Chaojun.
It is worth mentioning that Yintai Retail attaches great importance to the cosmetics category. According to public reports, from 2018 to 2020, Yintai Cosmetics doubled its three-year sales performance, equivalent to a compound annual growth rate of 44%. According to the official website of Intime Department Store, in 2020, Yintai became the largest physical retailer of cosmetics in China.
But just recently, there was news that Yintai Retail was going to be sold.
According to Bloomberg, Alibaba is considering selling its Intime Retail, suggesting that Alibaba is reconsidering its brick-and-mortar and online retail plans that it has dominated for years as it undergoes a comprehensive restructuring.
▍Screenshot from the official website of Bloomberg
According to people familiar with the matter, Alibaba has reached out to several companies to understand their interest in acquiring Yintai. People familiar with the matter also said that before and after Tsai Chongxin replaced Daniel Zhang at the helm of Alibaba in 2023, the company initiated discussions about the deal. Just last month, a potential buyer was still in negotiations, another person familiar with the matter said.
In this regard, Qingyan immediately called Yintai Group, and the other party said, "There is no relevant information to provide at this time". In addition, as of press time, Alibaba has not responded through public channels.
This year's revenue will sprint to 10 billion yuan, focusing on beauty collection stores
"Cosmetics are becoming the dominant category of department stores. Previously, Fan Jun, president of the China Department Store Business Association, said in an interview with Qingyan, "Although cosmetics account for a small proportion of the overall operating area of department stores, the proportion of sales is prominent, and the performance contribution is obvious, so many department stores are taking cosmetics as a breakthrough to drive the overall business level of enterprises to improve." ”
Intime Department Store is one of the most successful department stores in the cosmetics category.
Since 2018, the number of "No. 1 counters" in the country has skyrocketed, from 21 at the earliest to 47 in 2022. In other words, in 2022, a total of 47 beauty brand counters were sold at Intime Department Store to the first place in the country, which is rare among department stores.
▍The picture comes from Intime Department Store
In addition, Qingyan noticed that in the list of "No. 1 Counter in China" of Intime Department Store in 2022, there are not only international brands such as Lancôme, Estee Lauder, and Helena, but also domestic leading brands such as Proya, Mao Geping, and Marubeni.
The outstanding sales performance has also enabled Yintai Retail's beauty business to grow day by day. According to public reports, as of August last year, beauty accounted for 20% of Yintai's total sales, and online beauty accounted for 30% of total online sales.
Deng Chaojun publicly stated last year, "Yintai Beauty's net revenue turnover in 2022 is 8.4 billion, and it is expected that the annual revenue in 2023 will be more than 9 billion yuan, and will reach 10 billion yuan in 2024." ”
Commenting on Intime Department Store's success in the beauty sector, a long-term beauty brand distributor told Qingyan that the high-internet-based operation system and the positioning of mid-to-high-end beauty products with high customer unit price are important reasons for Intime Beauty's impressive results.
"From the perspective of the operation system of Intime Department Store, it is one of the most Internet-based department stores in China's department store industry. The distributor also mentioned that Intime Department Store is one of the few department stores in China that has eliminated the cash register.
As for the rumors of the sale, a senior brand agent said, "This does not mean that the performance of Intime Department Store is good or bad, and it may be more of a major slimming action by Alibaba." In view of the accumulation of years of cooperation between the two sides, I think Alibaba will retain some shares or transfer them to an Alibaba holding company to hold shares. ”
The person in charge of a well-known domestic cosmetics chain said, "If it is really sold, it means that the new retail model of Ma Yun's layout has changed." At present, Alibaba's priorities have shifted to technology, AI and globalization, so it is not surprising that Yintai will be sold. But now it's all rumors, everything is unknown. ”
It is worth mentioning that just last year, Yintai Retail made a new move in the beauty track. It is reported that in September 2023, Yintai Retail's GINKGO-X silver box, a beauty collection store brand that has been preparing and incubating for three years, was officially unveiled to the public.
According to public reports, the GINKGO-X silver box beauty collection store has a single store area of about 30-40 square meters, and has a beauty workshop, and the selection is mainly based on foreign niche brands and domestic best-selling items. At present, it has reached in-depth cooperation with S'Young International, Australasia Group, Unilever, etc., and has also settled in more than 40 beauty brands such as Ifedan, Reboxi, THREE, Mary Anlai, Moken, and Miguang.
According to Deng Chaojun, the monthly turnover of GINKGO-X collection stores has exceeded 1 million, and the highest monthly operating income has reached 2 million.
Regarding Yintai Retail's efforts in beauty collection stores, a person in charge of a cutting-edge skincare brand said, "GINKGO-X Silver Box or similar to Yanli's positioning, I heard that their store opening plans this year are very fast. For Yintai Beauty, this may mean that this year may be an important year in its development history. ”
Up 1.6% year-on-year Where is the department store channel?
Recently, according to the latest data released by the National Bureau of Statistics, in 2023, the total retail sales of cosmetics above designated size increased by 5.1% year-on-year to 414.2 billion yuan. Although total retail sales reached a new high, the growth rate slowed significantly compared to before the pandemic.
"Since May, the overall beauty market has not recovered as expected. For the beauty market in 2023, Deng Chaojun, who has been engaged in the department store channel for many years, previously said publicly.
While the beauty market has entered the stock competition, the competition in the department store channel has also shown a situation of alternating between the old and the new. In August last year, Pacific Department Store, once one of Shanghai's most popular department stores and 30 years in operation, announced that it would officially cease operations, and in the same year, the Hanyang store of Wuhan Dayang Department Store, which had been in operation for nearly 14 years, also announced its closure.
From the perspective of the sales of cosmetics in the department store channel, with the recovery of the epidemic, the department store channel maintained a slight growth last year.
According to Qingyan Intelligence data, the offline channel sales of China's cosmetics industry in 2023 will be 392.6 billion yuan, a slight increase of 0.8% year-on-year. In terms of channels, the department store channel was the highest, with sales reaching 161.38 billion yuan, a year-on-year increase of 1.6%, followed by CS channel and KA channel.
▍ Image source: Blue Eye Intelligence
According to the "2023 White Paper on the Development of China's Beauty Market" released by the China Association of Department Store Commerce CCAGM, department stores are still an important channel for high-end beauty: in the 90s, international mid-to-high-end cosmetics entered the Chinese market, with department stores as the main channel.
A Hangzhou agent who has been in the industry for many years also told Qingyan, "Due to the different audiences, the positioning of the department store channel is still dominated by mid-to-high-end beauty brands, and it is difficult for other low-cost brands to sell in the department store channel."
It is worth mentioning that in recent years, due to the improvement of the competitiveness of domestic beauty products, many international mid-to-high-end beauty brands such as Heryan and Benefit have withdrawn from the cabinet. Just recently, the Korean cosmetics brand OHUI Ouhui also reported the news of withdrawing offline. At the same time, due to the sluggish growth of online channels, many domestic beauty brands have also realized the importance of department store channels to establish brand image and build brand value.
On September 8 last year, AOXMED, a high-end skincare brand under Bethany Group, opened its first store in Zhejiang Province at the Wulin store of Intime Department Store. In November of the same year, the first standard store of Kefumei, the skincare brand of Juzi Biotech, opened in Xi'an Wangfujing Department Store.
In this regard, a person in charge of brand communication, who did not want to be named, said, "The establishment of counters in high-end department stores is not only an important channel for direct sales of high-end beauty products, but also one of the important means for them to establish brand image and build brand value." ”
"In the future, in the process of brand differentiation competition for domestic beauty, the core role of department store counters in providing experiential services, brand promotion, and product display will become more and more prominent. The head of communication further stated.