Fierce competition in the cosmetics market, domestic brands break through

Under the impact of the new crown pneumonia epidemic, how do cosmetic brands break the situation? At the China Cosmetics Conference held recently, the founders of the leading domestic brands such as Proya, Marumi, and Nyusi Mystery discussed the current breakthroughs of domestic brands with many industry leaders.

The beauty industry is hurt

On August 18, the China Cosmetics Conference hosted by the cosmetics industry media Pinguan.com was held. "Compared with all industries on Tmall, the beauty industry is the industry most affected by the epidemic. The most obvious of which is that the growth rate of new domestic brands has been suppressed." Alibaba Group Tmall Beauty Care General Manager Ji Yun said at the scene: "However, it is precisely the new domestic brand that won the first place in Tmall beauty sales."

In the cosmetics industry chain, the brand side occupies a dominant position. According to data from the Foresight Industry Research Institute, a think tank focusing on industry research and planning, the gross profit margin of cosmetics brands is generally 60%-70%, and the net profit margin is 5%-10%, which is the most profitable link in the entire industry chain.

At present, in the global market, high-end cosmetics brands and even mid-to-high-end cosmetics brands are almost monopolized by major European and American international brands. European and American international brands are also constantly expanding new brands in the Chinese market. Most local cosmetics brands in my country rely on the advantages of "high cost performance" to compete in the low-end market. In addition to fierce competition, domestic brands were also hit by the epidemic in the first half of this year, and their performance suffered a low.

Domestic products start a brand breakthrough war

It is precisely because of the awareness of the power of brands that domestic beauty and beauty giants have embarked on their own cutting-edge brand building and investment. Proya, the "first share of beauty makeup" in China, has made great efforts in brand building and cooperated with Tmall to build the first domestic new brand incubation base this year, with remarkable results.

Fang Yuyou, co-founder and CEO of Proya, said at the meeting: "In March this year, we created a makeup artist's cosmetics brand-Caitang. At present, Caitang's high-gloss series products have become the first in the market. In addition, we also Four or five new brands are being incubated and are expected to appear on the market from the second half of this year to next year."

More than one domestic brand has made efforts to build a cutting-edge brand. Sun Huaiqing, Chairman and CEO of Marumi, also said that Marumi is building an innovation engine. It has built a 24,000-square-meter Marumi Innovation Center in Songjiang, Shanghai. In the future, the new brands incubated by Marumi Innovation Center will be born here. In addition, Marumi also created an industry fund this year, focusing on investing in potential emerging brands in the cosmetics industry.

"I have always believed that there are two types of Chinese brands that can win the world market in the future. One type is cost-effective bargains that rely on high cost performance to win. The second type is brands that have truly achieved world-class R&D breakthrough technologies." Sun Huaiqing said.

What's the magic of emerging brands

The Chinese cosmetics market has always been regarded by international brands as "a battleground for military experts." IiMedia Consulting analyst Wang Qinglin told a reporter from China Business Daily: "From the perspective of the cosmetics market, China is currently one of the world's largest, mid-to-high-end brands with the highest acceptance and sustained growth."

On the one hand, international brands such as L'Oreal and Shiseido occupy the Chinese market by virtue of their existing brand influence; on the other hand, overseas stars such as Rihanna and Miranda Kerr are quickly gaining popularity among domestic consumers with their niche brands. Win the market.

Under the fierce competition, the profitability of the new domestic brands should not be underestimated. Fang Yuyou said at the scene that the monthly sales of Caitang's products can now reach 13-15 million, and the monthly sales are expected to reach 20 million.

Why do emerging brands have strong earning power? Jiyun said that the construction of cutting-edge brands is not a simple operation for traffic, but all links from new product launches, crowd positioning to content marketing have an effect on consumers and quickly occupy the market.

As early as three years ago, Tmall Beauty started brand incubation and brand infrastructure construction, and it did see significant results. "Tmall Beauty's number of cutting-edge brands accounted for 1/3 of the entire cosmetics industry, and the growth rate contributed to 1/2 of the entire industry." Jiyun said in an interview with a reporter from China Business Daily that the spring of cutting-edge brands has just begun .

In addition to making money, cutting-edge brands also have a strong ability to "attract gold", and many investors have "pocketed" to inject capital for cutting-edge brands. Wei Zhe, founding partner and chairman of Jiayu Fund, said in an interview with a reporter from China Business Daily: "I am very optimistic about domestic brands. The consumption power of post-95s is two to three times that of post-85s. The latter has a great influence, and new and cutting-edge brands rely on online channels for communication and sales, and are easily accepted by young people."

How to incubate emerging brands

Compared with traditional brands, cutting-edge brands have a completely different development path. In the cosmetics market, the generation and sales of cutting-edge brands are inseparable from online channels. Traditional brands need to go through a long growth cycle from birth to development, while emerging brands can quickly occupy the consumer market through e-commerce platform resources and rely on a wide online distribution matrix.

Jiyun told a reporter from China Business Daily: "Each new and cutting-edge brand has its own strategy. Some small brands rely on relatively large brand groups. With the capital and influence of these brands, they can quickly launch some products and reduce their own output costs. There are also brands that will cut in to find their own categories from subdivisions, such as launching repair and functional masks containing high-tech ingredients, to find their own positioning and room for rapid growth in the market."

In addition, the preferences of young consumers are the focus of the industry's attention, and it is also the leader of the brand's rejuvenation trend. In the cosmetics industry, domestic brands are more optimistic about the consumption potential of the post-95 generation. Fang Yuyou said: "If you can't develop products that the post-90s and post-95s like, they will be eliminated by the market."

At the same time, many domestic brand founders mentioned that young consumers learn more about beauty information through social media. This means that the era of large-scale media advertising has passed, and companies can get closer to young consumers by seizing online celebrities and e-commerce platforms.

How to achieve advanced development in the market? Jiyun told reporters: "There are different stages of incubating new brands. We formulate brand strategies according to different stages."

"The brand is measured by the transaction volume of a single brand and single flagship store on the platform. Brand incubation can be divided into four stages: 100 million, 300 million, 600 million, and 1 billion. A new brand with a transaction volume of less than 100 million only needs to think about choices. What kind of category to launch what kind of hot style'; a brand with a turnover of 300 million must consider how to push the product from a single hot style to a stable category structure; a turnover of 600 million will complete the quality transformation. Ensure that the brand has the ability to sustain the supply chain, the ability to communicate with consumers, the ability to perceive the market and the ability to continuously launch new products; when the transaction volume reaches 1 billion, it can grow into a brand with certain influence in the market, such as The trading volume of Perfect Diary has already reached 1 billion, and it has moved closer to leading brands like L'Oreal." Jiyun said.