<h1 class="pgc-h-arrow-right" data-track="3" >1. The parent company's market value has evaporated by 80% this year</h1>
Perfect Diary is one of the most successful domestic beauty brands in recent years, with a series of successful Internet marketing strategies and good cost performance, its single products often rank first in the sales volume of the whole network, although the performance is soaring, but still exposed a lot of problems and risks.
Perfect Diary's parent company, Yixian E-commerce, has been surging all the way after its stock price reached its high point in February this year, and as of last Friday's US stock close, the stock price has fallen to $3.34, a new low since the listing, down 86% from the highest point in February this year, with a market value of only $2.1 billion, evaporating about $16 billion.
<h1 class="pgc-h-arrow-right" data-track="5" >2. Revenue is overly dependent on marketing</h1>
According to Perfect Diary's latest financial report, in the second quarter of this year, revenue was 1.53 billion, research and development expenses were 0.35 billion, accounting for only 2.3% of revenue, and sales and marketing expenses were as high as 973 million, which has exceeded 27 times the research and development expenses.
Huge marketing expenses enable consumers to see the promotion of perfect diary from xiaohongshu to vibrato to weibo, and then from the subway to the billboards at the airport. With a series of marketing strategies, it has generated more than 3 billion annual sales in 3 years.
Perfect Diary has always been proud of its own user operation, but in the long run, it has also exposed no small problems, on the one hand, the sales growth rate brought by marketing has been weak, on the other hand, the high marketing expenses have swallowed up net profits, resulting in long-term losses that cannot be profitable.
In the second quarter of this year, sales and marketing expenses accounted for 63.6% of revenue, while the gross profit margin in the same period was only 65.7%, which means that the average product sold by 100 yuan can get a gross profit of 65.7 yuan, but it has to pay up to 63.6 yuan for sales and marketing expenses.
<h1 class="pgc-h-arrow-right" data-track="7" >3</h1>
Perfect Diary does not have a higher moat, its high growth in performance mainly comes from its large amount of marketing investment and cost-effective products, which makes it very easy for competitors to imitate, the increase in imitators leads to more and more fierce competition in the industry, and the domestic brands that can be called at present are Huaxizi, Yuze, Tangerine, Zhiyouquan and so on.
As there are more and more players in the same mode on the track, Perfect Diary is forced to invest more marketing expenses to acquire new customers and retain old customers, and the rising marketing expenses have also led to increasing pressure on profitability.
The emergence of a large number of perfect diary imitators, consumers see the rise of domestic products, but for the industry is indeed more and more fierce fighting.
The efficacy of beauty products is not as significant as drugs, and the two major factors that affect consumers' purchase choices are brand and price, and these domestic brands can only attract consumers' attention through a large number of marketing and fierce price wars before they have precipitated enough brand reputation.
Therefore, the problem encountered by every "perfect diary" in the industry is that not only is it difficult to increase pricing to increase profits, competitors are spending money on marketing themselves must also follow the money to spend money marketing, once the marketing is interrupted, they will face user loss, for the pursuit of profitable perfect diary, the days are getting more and more difficult.
The perfect diary model can be copied, so the homogenization phenomenon between domestic cosmetic products is becoming more and more serious, for the perfect diary that cannot see the hope of profitability in the short term, the attention of capital to it has naturally reduced a lot, and the stock price has fallen by 80% this year is not exaggerated.
This also gives the industry an important enlightenment: only rely on marketing and price war can not be sustained, the deep brand heritage is the moat of makeup brands, look forward to the future can be called "the light of domestic products" makeup brands.
This article is original by Lu Chao Shengcai, welcome to pay attention, take you to increase knowledge together!