Recently, some netizens on social media said
A skincare brand that takes the high-end route
SK-II is frequently withdrawn
Among them, there are many shopping malls located in the core business district of downtown Shanghai
Half of the counters were evacuated from Beijing and Shanghai
According to media reports, SK-II evacuated its Shanghai Pujian store, Wujiaoba store, Hisamitsu department store, and Isetan department store last year. The reporter noticed that the phenomenon of a large number of SK-II cabinet withdrawals does not only exist in Shanghai.
SK-II's products. Photo/SK-II official public account
According to SK-II's official website, Beijing and Shanghai are its key cities, with 16 and 18 counters respectively. However, according to SK-II's official account, the number of these counters has dropped sharply to 9 in Beijing and 10 in Shanghai. This means that in the two major cities of Beijing and Shanghai, the proportion of SK-II withdrawals has been close to half.
In this regard, the staff of Beijing Juntai Department Store and Cuiwei Department Store told reporters that SK-II has indeed been withdrawn: "It has been withdrawn for a long time. ”
Behind the large number of SK-II cabinet withdrawals, it was "named" by Procter & Gamble due to its declining performance.
Procter & Gamble's latest financial report shows that in the second quarter of fiscal year 2024 (October to December 2023), P&G's net profit fell by 12%, which is the first time in nearly five years that P&G has experienced a double-digit decline in net profit in this quarter, and SK-II is the "main culprit" of its profit decline - SK-II's sales in Greater China fell by 34% in the quarter, which also made SK-II's beauty segment the lowest in P&G's five major business segments, with a growth rate of only 1%.
Why did "excellent students" become "poor students"?
As a high-end Japanese skincare brand, SK-II's facial serum is also known as "fairy water". As early as 1991, SK-II was acquired by Procter & Gamble. Over a period of time, SK-II has experienced rapid growth, with sales growth exceeding 20% for 15 consecutive quarters, making it a veritable "top student" in P&G's beauty sector.
Why do the former "top students" have poor grades now?
Procter & Gamble publicly admitted that SK-II's performance declined mainly due to the discharge of nuclear contaminated water from Japan. Procter & Gamble CFO Andre Schulten said at the earnings conference that this is the second quarter in which SK-II has been affected, and SK-II's sales in China in the first quarter of fiscal 2024 fell by more than 10% year-on-year.
Screenshot of SK-II brand customer service response
In August last year, Japan launched the discharge of nuclear-contaminated water from the Fukushima Daiichi nuclear power plant into the sea, which attracted global attention. A number of Japanese cosmetics have been questioned by consumers whether they will be affected by nuclear contaminated water, and SK-II's official official account claims that the only source of water quality for the product, Lake Biwa, Japan's largest lake, is rumored to be suspected of nuclear contamination.
Although Procter & Gamble issued an official letter at the time to refute the rumors, and said that "we can confirm that SK-II products are safe". SK-II's official customer service also told China News Finance that "cosmetics meet relevant Chinese standards", but many consumers still cautiously choose "replacement". During last year's "Double 11" period, SK-II fell out of the TOP10 list of beauty and skin care products on an e-commerce platform for the first time since 2016.
Can the word "rise" save the international big names?
Regarding the "landslide" of SK-II, Jon Moeller, chairman of the board of directors, president and CEO of Procter & Gamble, believes that the discharge of nuclear contaminated water from Japan into the sea accounts for about 50% of the decline in SK-II's sales in Greater China, and the other 50% is due to market dynamics.
On social platforms, in addition to Japan's nuclear contaminated water, SK-II is also talking about frequent price increases and slow product updates.
From 2018 to 2023, SK-II raised prices four times, and the "small bulb" rose by as much as 12.5% in 2023, and on March 15 this year, under the continuous impact of Japan's sea discharge, SK-II's core products except for "small bulbs" ushered in price increases again, and "fairy water" rose by about 3%-4%.
Consumers' questions about whether SK-II will be affected by nuclear-contaminated water. Screenshot from e-commerce platform
"It's almost impossible to buy. Some consumers said.
The reporter noticed that the word "rise" has become a common strategy of many international makeup brands.
In February this year, the internationally renowned cosmetics giants Shiseido and Estee Lauder announced their financial reports one after another. Shiseido's performance continued to decline in the second half of 2023 due to the impact of nuclear contaminated water, with full-year net profit falling by nearly 40%, while Estée Lauder's net profit fell 20.5% in the second quarter of fiscal 2024 ended December 31, 2023, due to the weakness of travel retail business in Asia.
In the same month that the earnings report was released, Shiseido announced that it would adjust the prices of some products on April 16, while the internationally renowned beauty giant Estee Lauder will adjust prices from February 19, with increases ranging from 10% to 40%.
At a time when consumers are becoming more and more rational in their consumption, the effect of price increases is still in doubt.
Source: China News Service, Yangcheng Evening News