Domestic beauty cosmetics start again： turbulence, flow and localization

21st century business herald reporter Yi Jiaying reports from Shanghai.

In the low tide, domestic beauty cosmetics are looking for new opportunities. Just last week, the first store under the Huaxizi Line officially opened in Hangzhou Xizi Lake. Prior to this, the brand mainly sold products and communicated with users through online channels such as Tmall, JD.COM, Tik Tok, etc., and has not been laid out offline. "In fact, we started to shop under the preparatory line the year before last, but there has been no suitable location." The person in charge of Huaxizi Oriental Aesthetics and Space Innovation Center said that for Huaxizi, if there is no good location, there will be no rush to open a store.

The expansion from online to offline, on the one hand, is the development space of fancy entities, on the other hand, it is also limited by the bottleneck of online traffic. According to the data of the total retail sales of consumer goods in June released by the National Bureau of Statistics, in the first half of 2022, the total retail sales of cosmetics nationwide was 190.5 billion yuan, down 2.5% year-on-year. This is the first decline in the total retail sales of cosmetics in the first half of the year in the past 10 years, and the growth rate is even lower than that in the same period in 2020.

Among them, the impact of the epidemic can not be ignored. According to the 2022 China Shoppers Report, the compound growth rate of cosmetics lacking the support of social needs has decreased by 16%, and the pace of new product sales has also been disrupted. Constant innovation has always been an important market strategy for domestic beauty brands.

An obvious phenomenon is that many brands have slowed down in the first half of this year. In an interview with 21st century business herald, the relevant person in charge of Juyi Group said, "The repeated epidemic this year has really affected us a lot, and the whole R&D, production and logistics have been affected to some extent. Many new products and new series of its brands, orange blossoms and fermented colors, have been forced to postpone listing. "

According to the performance report of Yixian E-commerce in the third quarter of 2022, the revenue in the third quarter was 858 million yuan, down by 36.1% year-on-year. The reason is still the decline in the income of makeup business. In the third quarter, the income of makeup business of Perfect Diary, Little Odin, Pink Bear and other brands was 570 million yuan, down by 48.8% year-on-year.

At the same time, the fluctuation of the live e-commerce industry has also brought uncertainty. In the past years, domestic beauty brands have mainly relied on online channels, especially live e-commerce. After the traffic turbulence brought by the super-head anchor that is enough to drive a brand and transform its influence, the brand is also rethinking live broadcast, traffic and brand.

Fluctuation of flow

This year, during Li Jiaqi’s absence for nearly three months, the sales of some domestic beauty brands also fluctuated greatly.

Looking back at that time, many domestic beauty brands concluded to the 21st century business herald reporter that the live broadcast room of the big anchor is addictive, but it should be used with caution. "Now I don’t think about the live broadcast room of the big anchor in daily life, but for new brands, super-head anchors such as Li Jiaqi are still excellent brand endorsements." Ou Ni (pseudonym), a staff member of a domestic beauty brand, said, "Every time a domestic brand pushes a new product, it is still needed. It is indeed a more certain channel for the new product to detonate."

During the Double Eleven last year, there were more than 1,300 kinds of domestic products in the live broadcast rooms in Li Jiaqi. In this year’s "All Girls’ offer" program, the proportion of domestic brands also exceeded 50%. In Ou Ni’s view, compared with the flow, we pay more attention to the deep creation of products of both parties. "In fact, before everything happened, Li Jiaqi accounted for less than 5% of the total sales channels. Our strategic adjustment has been deliberately tilted to self-broadcasting and Tik Tok channels, and Tik Tok’s stamina is worthy of attention and attention. "

Different from the reflection of domestic brands, international brands began to gather in Li Jiaqi live broadcast rooms. In the first quarter of this year, the growth rate of international beauty giants in China slowed down, and the growth of head brands was limited by weak consumption. Since the "June 18th Promotion" in the middle of the year, big names have been betting on Li Jiaqi, lowering their posture, showing unexpected discounts, and even giving discounts and formal clothes from the tooling.

In this regard, Tangyi said that makeup is an industry with a long chain and very high requirements for the completion of each link in the chain. Short-term price reduction promotion may bring some sales promotion, but it is an act of quenching thirst by drinking poison, which damages the image and positioning of the brand itself. Short-term promotion will not affect the whole market. "This year is the fifth year of the establishment of the Tangduo brand under the Tangyi Group, and the yeast color has also entered the third year of brand development. In the past few years, the whole group has continued to make profits, and has maintained double-digit annual sales growth, much faster than the growth rate of the market. In 2021, the GMV of orange blossoms was close to 1 billion, and the GMV of fermented color exceeded 500 million. "

In fact, reducing dependence on talent is a new way that all brands that have gone through detours are practicing. Some brands believe that it is not a good thing to be too closely bound to the platform.

The person in charge of a domestic beauty brand further pointed out that, more crucially, the label of live broadcast for a long time has been to emphasize the price, and everyone pays for the temporary cool impulse, which is meaningless for brand building and consumer loyalty. "We have more freedom to do self-broadcasting, and we can establish deeper communication with consumers."

Under the landing line

Corresponding to the fluctuation of online channels, domestic beauty brands are also actively going offline.

It is understood that the first store of Huaxizi not only has the function of beauty retail, but also includes customized experience, art exhibition and other services. "The choice of Hua Xizi has nothing to do with the cold and warm market." The person in charge of Huaxizi Hidden Garden explained that the biggest goal of opening a store is not to do business, but to present a more complete Huaxizi to users through this store. "So we choose a bigger storefront to create an artistic space for users."

At present, Hua Xizi has no clear plan for opening stores and other channels in the future, but said that the brand will continue to explore offline space for interaction with users.

Compared with the opening of Huaxizi’s big store, Tangduo started in pop-up shop at the earliest. In the spring of 2019, Tangduo made its first pop-up shop in shanghai new world, only 5 square meters. "Market feedback, media exposure and business output far exceeded our expectations. Pop-up shop has a long queue at the door every day and has become a popular punching place for Xiaohongshu. " The relevant person in charge of Tangduo said, "After that, we carefully selected core shopping malls such as Chengdu, Changsha, Wuhan, Nanjing and Guangzhou to make a tour of pop-up shop, and they all received very good responses."

It is precisely because of this that Orange Blossom has opened offline direct stores since September 2020. At present, it has opened nearly 20 direct stores in Shanghai, Chengdu, Chongqing, Hangzhou, Xi ‘an and other cities, and more cities will be laid out in the future.

21st century business herald reporter is concerned that these domestic offline beauty shops are not only the shelves of traditional cosmetics counters, but also deeply combine the psychological needs of young consumers, and incorporate photo punching points into the store design, which are easy to shoot and stroll, and are suitable for the punching needs of social platform communication.

There are more domestic beauty brands such as Colorkey, Leemember, Girlcult, Hold Live, Hedone, etc., and they choose to settle in the offline beauty collection store. According to incomplete statistics of the media, THE COLORIST colorist opened more than 300 direct stores in less than two years. Official website of WOW COLOUR shows that it will open 600 stores in 2020.

Not only are young new domestic beauty brands, but established brands such as Mao Geping pay more attention to offline. "Today, with the high penetration of the Internet, live e-commerce, short video marketing, online celebrity economy and private domain operation have changed the traditional sales model, but for brands, what is more important is the offline brand counters." Song Hongping, director and CEO of Mao Geping Cosmetics Co., Ltd., said in an interview with 21st century business herald, "Offline has always been a very core area for us to provide services to consumers. We regard product trials and face-to-face communication for consumers as precious opportunities, hoping to make consumers feel the brand temperature. "

Meet the local conditions

In addition to channel strategy, domestic brands’ pursuit of consumers is more manifested in product innovation.

"The vast majority of women in China often encounter thousands of colors when choosing makeup, and popular colors are not suitable for their own troubles. In the final analysis, it comes from the fact that many consumers don’t know what color they are, and they also have a little knowledge of the appropriate colors. " According to the person in charge of research and development of yeast color, yeast color has created a set of skin color analysis theory by analyzing the skin color of women in China, and developed matching products such as lips, eyes and air cushions for 18 women with different skin colors in China.

Besides skin color, Yeast Color also studied and analyzed the skin quality and facial contour characteristics of women in China, and launched targeted products. Hua Xizi, whose brand gene is Oriental Aesthetics, is also increasing research and development. Li Huiliang, the chief scientist, announced that he will invest 1 billion yuan in scientific research in the next five years, and Chinese herbal medicine is the key direction of product research and development in the future.

Although this is not a new phenomenon, China consumers’ preference for local brands has accelerated in recent years. The 2023 McKinsey China Consumer Report: The Age of Resilience points out that, surprisingly, national pride is not the only driving factor. Today’s domestic enterprises respond to the trend faster, get closer to consumers and invest more boldly. 49% of China consumers think that local brands are "better in quality" than foreign brands, while 23% of China consumers hold the opposite opinion. The survey involves 12 different product attributes, and the data results are roughly the same.

"The skin color and skin quality of people in the East and the West are very different. There are still some differences from the simple market research of big data and the cognition of data in some aspects. " Song Hongping said frankly that it is as important to get a sense of body sensation from one-on-one service as to get information from big data and market research.

Although the epidemic has brought a big impact to the beauty market, with the optimization and landing of epidemic prevention measures, people’s work and life will gradually recover, and consumption will rebound positively. It is not difficult to predict that in 2023, every brand is gearing up, and a new round of more intense market competition has arrived.

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