Image source @ Visual China
Wen 丨 new entropy
At the end of November last year, Yixian E-commerce, the parent company of Perfect Diary, the first share of beauty domestic products, successfully went public in the United States, and its market value once exceeded 10 billion US dollars.
A year later, the stock price of Yixian E-commerce fell to $3.325 per share, with a market value of $2.1 billion, shrinking by more than $10 billion.
In 2020, 2.7 billion; 2021, Q1,320 million; 2021, 390 million. This is the number of the perfect diary for a year and a half. In the first half of domestic cosmetics, losses are still the main theme of the new brand.
The few exceptions may come from Mao Geping Makeup Brand Co., Ltd., which has just passed. As early as five years ago, Mao Geping Cosmetics Co., Ltd. submitted a prospectus to seek an A-share IPO, but after updating the prospectus, it did not follow. Public information shows that on October 21 this year, Mao Geping's IPO was quietly successful, and it will soon become the first stock of domestic makeup artists.
In the 5 years of waiting for the listing, the domestic beauty market has been surging. According to a CBNData report, the size of China's beauty & care market climbed from 218.5 billion yuan to 364.4 billion yuan from 2017 to 2021. The huge market has ripened the domestic beauty industry that has been brewing for a long time.
Among the emerging brands, Yixian E-commerce went public in the United States, and Winona's parent company Yunnan Bethany was listed in Shenzhen.
In 2017, when the veteran domestic products, Mao Geping's makeup brand failed to be listed as desired, Pleia successfully landed on the main board of the Shanghai Stock Exchange, and the stock price rose all the way from 15.3 yuan / share to the current (October 22) 1911.19 yuan / share, with a cumulative increase of more than 1100%, and the annualized return was close to 85%. In October 2020, the domestic long-established film Zai Zhen announced that its cosmetics business intends to be listed separately.
Traditional brands accumulate thick and thin, from OEM for international big brands to rely on technology and supply chain accumulation to create their own brands; the new generation is small and broad, perfect diary, Huaxizi has stepped on the e-commerce dividend and short video outlet, and achieved mutual achievements with a group of beauty KOLs. And Mao Geping, who has been founded for 20 years, has a very low proportion of research and development, low marketing costs, and can also be known as the "light of domestic goods" in the case that the name of "the first share of domestic beauty" has been snatched away by the perfect diary.
Mao Geping seems to have taken the road of alternative domestic cosmetics.
<h2>1. Experienced "middle-aged experts"</h2>
In the millennium, Mao Geping published an eight-open hardcover book "Mao Geping Makeup Art", which sold for 200 yuan. It is said that two years before publication, he published in beauty newspapers and periodicals that if readers paid 200 yuan for books in advance before a certain deadline, they would get a book signed by Mao Geping and attached a voucher for Mao Geping's two-day course. The 1.5 million yuan he received was then printed, lectured, sold, and word of mouth said he was a "magic makeup artist."
At that time, he had already become popular with the makeup artist in "Wu Zetian" broadcast in 1995, and completed the huge age span of 15 to 80 years old on the face of 40-year-old Liu Xiaoqing, and the "revolution above the neck" of the Chinese people began.
Subsequently, he completed Liu Xiaoqing's one-man makeup triangle in "Burning Afang Palace", which was praised by the industry as "the state of the absolute master". In those years, he made up for the most popular stars, carved lecture CDs, published books, gave lectures, and ran schools, basically using "Liu Xiaoqing" as the opening statement in his speech quotations, "Yang Naiwu and Xiao Cabbage" and "Wu Zetian" were the topic materials he could not do without.
To this day, Mr. and Mrs. Mao Geping still interact with Liu Xiaoqing on Weibo, and his student Zhang Chuanteng has been working as Liu Xiaoqing's stylist.
On August 20, 2019, Mao Geping's makeup change video for blogger @ Late Night Teacher Xu was the highest on the Weibo hot search list No. 3, the topic has 700 million reads, 40w discussion, many people archaeology on the teaching video on the B station, have to "send the head to Teacher Mao". With the hard-earned craft of the last century, young people also seem to have become Mao Geping's fans.
Until an event that is not a "rollover" occurs. In February this year, Mao Geping was invited by a magazine to change the makeup of female star Zhao Lusi, and Zhao Lusi, who has always been based on oxygen sweet sister style, changed his temperament under the transformation of Mao Geping, but the comments of netizens were very different. Some people think that it is "bright and atmospheric", and some people think that it is "old-fashioned" and "unrecognizable".
Similar evaluations have also appeared in Li Jiaqi's live broadcast room, Li Jiaqi when showing The joint gift box between Mao Geping and the Forbidden City, euphemistically said "slightly solemn, a little unbearable", and the duan hand in the comment area directly called "customized for Emperor Gong" and "the instruction manual is like a holy will".
Polarizing reviews were also staged on the big single "Foundation". Xiao Bei of the beauty circle said that he had bought Mao Geping Foundation Cream, "and there are indeed cases of mottled and stuck powder." There are also many people on the Notes of the Little Red Book who say that "big brand prices", "complicated techniques", and "serious makeup removal". It is interesting to note that there are often similar words in the top comments: as we all know, Mao Geping's poor use is his own technical problems.
Mao Geping's own makeup skills have long been pure, and in the era when many people think that makeup is "superficial kung fu", he has learned to use light and shadow to shape the three-dimensional sense of bone phase. When the fashion circle competed to imitate the Western "avant-garde and bold" aesthetic system, he adhered to the oriental aesthetic narrative of yue opera. Because of this, the story of high luxury national style is most appropriate for him to tell.
This is also the brand story of the perfect diary and the money that the flowers can't burn. The perfect diaries that occupy the user's mind with "cost performance" and "big name equality" exchange losses for growth, and are always vigilant against the next "dark horse" that burns money.
Mao Geping's most profitable high-end beauty "MGPIN" does not burn much money, and it is difficult to get out of the sustainable development of domestic beauty. Some insiders believe that the research and development and marketing of Mao Geping Brand Makeup Co., Ltd. are lower than the average level of similar brands, and the marketing idea of relying too much on the personal IP of "Mao Geping" has caused the phenomenon that products and consumers are less compatible. Avoided the marketing disorder of the perfect diary, but inevitably suffered from "middle-aged anxiety".
<h2>2. 20 years of offline sniper warfare</h2>
In 2003, Mao Geping's "MGPIN" brand counter named after himself entered Shanghai Ganghui, which was the only domestic brand in the high-end department store at that time, and the biggest brand "spokesperson" was Mao Geping himself. In order to complete the guaranteed amount of 90,000, he did a roadshow in the mall, and explained makeup skills to customers on the spot, more than ten years ahead of today's beauty bloggers.
The tradition of free makeup promised at that time has continued to the present, from five times a week at the beginning to four times a year today, and offline stores have expanded to more than 200 in the past 20 years. When the new Consumer Brands of the Internet basically completed the hunt for online traffic and gradually laid out the offline, Mao Geping's 20 years of offline stores were like a stroke of god who inadvertently inserted willows.
Positioning high-end makeup, "MGPIN" product pricing can be comparable to Lancôme, Estée Lauder, formal powder paste at about 350 yuan, lipstick at about 250 yuan, the main repair of the caviar mask official mall price of 780 yuan, is Li Jiaqi's mouth proper "noble lady sister" supplies.
It is not difficult to understand why entering a high-end department store is the first step in Mao Geping's choice. Estée Lauder has been in China for 27 years and currently has nearly 400 stores. For high-end brands, offline scenes are an indispensable step in the consumption closed loop. When there is a clear demand for beauty and skin care products or when the unit price is high, active or unintentional exploration of offline stores is a key move to promote consumption. This is also one of the reasons why cosmetics counters are lined up on the first floor of the mall.
In addition, compared with the beauty collection store model that concentrates many brands, the purchasing power of the brand counter tests the degree to which the brand occupies the minds of consumers before consumption, and Perfect Diary, HuaXizi, etc. are the layout of offline stores after completing the accumulation of brand awareness. The most original popularity for the Mao Geping brand is undoubtedly Mao Geping himself. It was then and it is now. The first store relied on Mao Geping to personally go down to shout, opened to more than two hundred, Mao Geping personal IP is still the top priority of the entire brand.
But relying only on Mao Geping's personal IP is like Hua Xizi deeply binding Li Jiaqi, for a brand, deeply cultivating domestic beauty for 20 years, becoming a ceiling, not just for mutual achievement with Internet celebrity bloggers.
More importantly, while laying out offline heavy assets, Mao Geping Makeup Brand Company maintains a gross profit margin of more than 80%. When the prospectus was submitted in 2017, the ultra-high gross profit margin caused the CSRC to question. According to the data disclosed in the prospectus, from 2014 to the first half of 2017, Mao Geping's net profit was 0.47 billion yuan, 0.54 billion yuan, 0.53 billion yuan and 0.35 billion yuan, respectively.
Data source: prospectus, national enterprise credit information publicity system
The main business consists of "product + training + other", and the comprehensive gross profit margin is 81.50%, 79.70%, 78.22% and 78.88% respectively, which is higher than the industry average in the same period. From a more blunt point of view, the gross profit margin of Yixian e-commerce is 64%, and Mao Geping 5 years ago has a gross profit margin of more than 10% higher than the current perfect diary. And in the 2017 updated prospectus, Mao Geping makeup brand e-commerce channels accounted for only 2%, that is to say, offline direct stores accounted for more than 70% of sales, while the gross profit margin was maintained at about 80%.
What's more, the perfect diary marketing + management burned money and gross profits are basically the same, and sometimes they have to lose money to make money, compared to Mao Geping is very restrained in marketing. Except for the occasional interaction between founders and celebrities that don't cost money, there are almost no large marketing expenses on the earnings report. From 2014 to June 2017, the advertising expenses and business promotion expenses in the three and a half years totaled 45.1143 million. Even in the entire sales project, a total of 440 million yuan was spent in three and a half years, compared with Yixian e-commerce, the marketing has spent 2 billion yuan in the first nine months of this year alone.
In addition, high-end products and external processing production models are also one of the reasons affecting gross profit margin. According to Mao Geping's prospectus, at present, the company has not built its own cosmetics production facilities, the production of products is mainly carried out through the outsourcing processing model, the Mao Geping foundry factory disclosed online includes the global makeup giant Intree, cosmetics foundry leader Kosmeshi and so on. This is essentially no different from a new consumer brand.
Domestic beauty from "broken" to "standing", relying on oem processing is a popular trend but not necessarily long-term. Mao Geping's return to the public vision should bring innovative high-end new ideas, rather than repetitive clichés.
<h2>3. Countdown to the national wind dividend</h2>
"High luxury national style" is one of the cornerstones of Mao Geping's brand image.
Consumption upgrades, the high-end trend of the cosmetics industry is becoming more and more obvious. According to Euromonitor data, the proportion of high-end products increased from 16.18% in 2006 to 35.40% in 2019. From the perspective of growth rate, China's high-end cosmetics market grew at an average annual compound annual growth rate of 14.81% from 2006 to 2016, and jumped to 28.25% from 2017 to 2019. The growth rate of the mass cosmetics market in the past decade is generally below 10%. This is the background of the "high luxury" route coming into effect.
In the dimension that can keep pace with the concept of "national tide", Mao Geping beauty is one of the few brands in the new domestic products that can unify "quality" and "quantity". The inner imagination of "National Tide IP" is also fully displayed in the physical product. Different from the "selling logic" with the label of "cost performance", brands with more unique cultures are more likely to tell good stories in the national tide.
But on the other hand, the main Chinese style concept of makeup products have spread all over the market, HuaXizi's "Dai Impression" series, orange "Dunhuang joint gift box", the concept of national tide is more because of excessive commercialization, is being dissolved meaning.
After the national tide recedes, those who can stay can either live in the height of the temple of the art hall or be far away from the rivers and lakes of daily life. The online competition of domestic beauty has become more and more fierce and cruel, and the 20 years of offline battles against international brands have sacrificed the marketing voice that celebrity endorsements can produce, emphasizing the professionalism of the founders and forming brand endorsements in another dimension.
However, when it comes to product research and development, Mao Geping's advantages are not obvious. The prospectus shows that from 2014 to June 2017, the total R&D expenses for the three years were only 8.9207 million yuan. This may also indirectly explain why product-to-consumer fit has been criticized.
At this point, Perfect Diary seems to be "invested" more. As of september this year's financial report, Yixian e-commerce has invested 9.768 million. L'Oréal and Estée Lauder, an international brands contemporaneous with the prospectus, also invested 3.77% and 1.51% in research and development.
Although in the prospectus 5 years ago, Mao Geping compared international brands such as Estée Lauder and L'Oréal in the data columns, on the whole, even in the domestic market with high acceptance, brand awareness, coverage of the breadth of the crowd and product adaptation, Mao Geping still has a long way to go.
At the very least, products packed in fine American-style packaging should not be treated simply without strong technical support. This point should be understood by new domestic brands.
In the new consumption era of "everything can be co-branded", Mao Geping's attitude towards co-branding, which has been established for 20 years, is also very cautious, and the limited editions of the past three years have chosen to co-brand with the Forbidden City IP with a high content of national style, which shows that Mao Geping's brand positioning should have restraint in high-end, and it is also destined to "go up" on the road of domestic beauty is a relatively correct way out.
After the national tide, where the road goes is something that all domestic brands should consider in advance.
Resources:
"Classic Legend: Mao Geping: Magic Makeup Artist" Jiangsu Satellite TV
"The History of the Struggle of China's First-line Makeup Artists Represented by Li Dongtian Mao Geping Jimmy" Sohu.com
"The Light of Domestic Goods"? Red for 20 years? We chatted with "Mao Geping" about the CBNData consumer station