Source of this article: Times Finance Author: Zhou Jiabao
Editor's note: The Guangdong-Hong Kong-Macao Greater Bay Area is becoming a meeting point of innovation and aesthetics. It is home to China's local daily chemical giants, China's largest cosmetics industry, and a booming health industry...... They are the producers of beauty and the providers of a good life. In this hot land, Bay Area enterprises relay long-distance running, they create products with ingenuity and innovation, and bring beauty to all corners. Times Weekly launched the special topic "Made in China, Made in the Bay Area", which shows the key role of the Greater Bay Area in promoting the development of various beautiful industries, analyzes the growth code behind the aesthetics of the Bay Area, and records the great changes in the industry under the new wave.
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The opportunity for domestic cleaning and care brands to overtake in corners is coming.
In the past few years, the demand for "self-pleasing" has driven the upgrading of China's consumer market. As consumers' life needs become more diversified and segmented, changes in the traditional personal care industry are also quietly taking place. "Skincare hair care", "scalp microecological balance" and "effective hair care" have become hot words on social platforms.
According to the "2024 Shampoo Product Market Trend Insight Report" released by Qingyan, from 2019 to 2023, the average annual compound growth rate of China's shampoo and hair care market will be 3.24%, and the size of the shampoo and hair care market will be 65.1 billion yuan in 2023, and the market size is expected to exceed 70 billion yuan by 2025.
Market expansion is accompanied by the birth of more segmented needs and the migration of consumption scenarios. A large number of new local brands have emerged with the help of online channels, and they are trying to break the rules of the game in the traditional cleaning and care track and seize market share with new business logic and unique Chinese ingredients.
Moxue, a cleaning and care brand established in Guangzhou in 2022, is one of the "spoilers". Times Finance learned that with the core product "Tea Net Oil Control Shampoo", the brand's sales in 2023 will exceed 200 million yuan. Feigua data shows that in the first quarter of 2024, Moxue will be on the top 7 of Douyin's sales hot list with sales of 75 million yuan.
On April 27, in Menghai, Yunnan Province, the production place of Moxue brand tea raw materials, Wu Chaohua, the brand manager of Moxue, was interviewed by Times Finance and other media, sharing the logic and methodology behind the explosive growth of new domestic cleaning and care brands.
Wu Chaohua, brand manager of Moxue
Channel reform, to "high seas fishing"
In the context of international brands dominating the market, channel changes have created "overtaking" opportunities for domestic cleaning and care brands.
With the shift of terminal consumption habits and scenarios, the founding team, including Wu Chaohua, keenly captured that the traditional channels and marketing of the daily chemical industry began to tilt online.
According to Euromonitor, from 2008 to 2022, China's hair care market grew at a compound growth rate of 5.4%, and the penetration rate of the online market is also increasing. By 2022, the proportion of e-commerce channels for cleaning and care products has surpassed that of traditional supermarkets (large supermarkets and supermarkets), with 39.5% and 38.2% respectively.
The proportion of online has increased significantly, and the interpersonal network and offline resource advantages that traditional daily chemical brands have focused on building have gradually collapsed. In the past two years, veteran players such as Bee Flower have made a "comeback" through online channels, and new faces such as Moxue and Off & Relax (Proya's brand) have continued to enter the game.
"In the past, daily chemical companies relied on supply chains, distribution, and channels. What is needed now is content, and a deep understanding of the Internet. The data and gameplay of e-commerce are actually more transparent than traditional offline channels. Wu Chaohua said bluntly.
The transformation of the channel environment has provided the soil for the rapid growth of new local brands. The Internet thinking of the company's decision-makers, the underlying data and algorithm technology, have become the necessary nutrients to support the new brand to "get out of the circle".
Wu Chaohua believes that Moxue's ability to stand out in the "Red Sea" is not unrelated to the "Internet gene" engraved in the team's bones. Including him, the management team of Moxue's parent company has a computer background, and their first entrepreneurial content also includes advertising agency business on social platforms such as Weibo.
This also made Moxue the main battlefield online since its birth. Wu Chaohua pointed out that compared with mature traditional shelf e-commerce such as Taotian and JD.com, the traffic allocation rules of content e-commerce such as Douyin are more suitable for new brands to explode, which is one of the reasons why Moxue chose to focus on Douyin channels.
Nowadays, the method of traditional daily chemical brands "smashing" TV advertisements is no longer applicable. On Douyin, every consumer is seen as a collection of hashtags, and burning money doesn't necessarily work. Only by accurately placing content can consumers be attracted to pay.
In addition, the way of repeatedly reaching consumers on the platform by co-creating content with users is known as "fishing on the high seas" within the brand.
Wu Chaohua said that the new brand should dare to cast a net, "If you don't dare to cast a net, you will die." Our strategy is to get the marketing team to the front line to gain insight into user changes. Every time you cast a net, you have to review it, and record which action of this net is right, and at what time it is cast. Find patterns in the continuous accumulation of casting nets. ”
"In the early days of the brand, we didn't know where the fish were, so we produced completely different content every month, just to find the location of the fish," Wu said. The only thing we know for sure is that our team has the courage to try and make mistakes and insist on doing the right thing. ”
The online "out of the circle" has also brought opportunities for new domestic brands to break through offline.
Wu Chaohua bluntly said, "The position of international brands in offline channels is being shaken. "Offline supermarket channels are undergoing upgrading and reform, in the process of brand replacement, some old international daily chemical brands are facing optimization due to weak sales, while China's new local brands are relying on more localized business empowerment, higher profit margins, and the channel voice is gradually improving.
In March this year, Moxue announced its full entry into offline channels, and the first step is to target 20,000 stores and supermarkets in the country's top stores, and it is expected to complete the laying of at least 14,700 head stores and supermarkets by the fourth quarter.
The washing and care brand rolls to the effect, and does not do short-term harvesting "Internet celebrities"
In the past, the share of China's cleaning and care market was occupied by international brands all year round, showing the characteristics of high industry concentration.
According to the research report of China Post Securities, in 2022, the CR10 brand in China's hair care market will be 62%, of which Head & Shoulders, Pantene, and Rejoice are all brands of the international daily chemical giant Procter & Gamble, while Qingyang and Lux are owned by another giant, Unilever. Procter & Gamble alone has a share of more than 30%.
It's not easy for a new brand to open up in such a competitive market. Functional cleaning and care containing Chinese ingredients has become the focus of domestic cleaning and care brands.
According to the 2024 Shampoo Market Trend Insight Report, more than half of the respondents believe that efficacy is the main factor they pay attention to when choosing a shampoo, followed by cost performance. The "ingredient party" and "traceability party", which were originally popular in the field of skin care, began to extend to the field of washing and care.
Among the domestic brands, Adolf's Hathaway brand focuses on scalp conditioning, Uniasia Technology's Jingmachi focuses on dandruff, and Tong Ren Tang focuses on anti-shedding. After off & relax, Proya will launch a new brand of washing and care, "AWAKEN SEEDS", which is positioned to focus on the efficacy of scalp microecology. Hyaluronic acid raw material giant Freda also released the news that the brand that focuses on the scalp microecology is listed.
International brands are also betting on the efficacy of the care track in the Chinese market. According to Mintel data, since 2021, the number of new overseas hair care brands entering Tmall Global has doubled, and the sales of imported scalp care products have increased by 340% year-on-year. Recently, L'Oréal's Kérastase and L'Oreal PRO have continued to make efforts in the promotion of scientific washing and care, and the internationally renowned scalp care brand Fresh Deya has handed over the operation rights in China to the parent company of local makeup brand Tangerine, Orange Group.
For new domestic brands that started online, it is far from enough to find a way to maximize the dividends of channel change. What can support them in the fierce competition for a long time is still product power and brand power. The new domestic brand represented by Moxue is abandoning the "Internet celebrity" label and building a brand core.
"There are two kinds of brands, the first is called fashion brands, and the second is long-term brands. Fashion brands are on the cusp of the wave, and as soon as it appears, everyone will consume impulsively. However, this kind of brand does not have the core competitive conditions, and it is possible that the team is not polished enough, the supply chain capacity is not enough, and the product quality is not enough, and these problems will be exposed over time, and it will take a lot of time to make up for it. When talking about the understanding of the core of the brand, Wu Chaohua said.
He added, "We shouldn't be influencers, there's no point in 'harvesting' in the short term. Being a daily chemical brand is different from other brands, and solving the pain points of rigid needs is a more essential problem. If there is a breakthrough in formula research, the life of the product will be extended; Marketing strategies can also win a certain curve, but they can't hold up for a long time. No matter how good the three-point shot is, you can still lose the game. ”
He revealed that Moxue's parent company has built its own factory and has completed the first phase of the construction of the synthetic biology platform, and will make in-depth use of synthetic biology and bioengineering technologies in the future to continue to explore tea ingredients such as black tea double fermentation. "Black tea extract is one of the ingredients we have found, and there are many herbs with Chinese characteristics that need to be developed, and we will continue to invest in research and development, and we will also register exclusive new ingredients in the future." He said.
Times Finance learned that Moxue set a sales target of 500 million yuan in 2024. Wu Chaohua said, "The first step is to break the circle on the marketing side and let consumers contact us, and the brand has succeeded." The next step is to do a good job in the channel and replenish our goods in all sales channels. In May this year, most supermarkets in first- and second-tier cities will see our products. ”
China's new cleaning and care forces, represented by Moxue, need more efforts to build the brand core while "fighting the country".