Cailian | New Consumer Daily (Gao Mengyang Intern Dong Jingyi) News,What do you think of when you talk about domestic beauty? The animal eye shadow of the perfect diary, the lipstick with small stilettos, the loose powder of Huaxizi, the highlight of orange blossom and the monochromatic eye shadow …
With the overwhelming publicity on platforms such as Xiaohongshu and Tik Tok, with the fiery explosion of single products, the new beauty brand has set off a wave of revival of domestic products in the beauty circle. In the sales of Tmall Double Eleven in 2020, Perfect Diary and Hua Xizi both won top1 and Top2 of the make-up category, and people pressed all kinds of international brands.
However, as more and more consumers return to rationality, the investment and layout of international big brands for e-commerce and online marketing have gradually matured, further squeezing the online space of new beauty brands.
In Tmall’s "Double Eleven" brand TOP transaction list in 2021, only Winona of domestic brands entered the top ten in the beauty category. In the makeup category, Saint Laurent, Estee Lauder and Sanxi Yucheng Top3, the perfect diary and Hua Xizi, which dominated the list in 2020, fell behind to the fourth and sixth places.
Obviously, offline brands with offline sales channels are more emboldened in online competition, which also makes some new beauty brand owners turn their attention to offline:
- By the end of 2021, Mao Geping, the representative brand of Xinguochao Beauty, had laid out more than 30 counters in Yintai Department Store.
- On December 25th, 2021, Winona, a functional skin care brand, launched its first store in Yintai Department Store.
- On January 14th, the 14th offline direct store of Juduo settled in Wuhan Yintai Creative City …
Yang Qingsong, secretary general of China Department Store Business Association, once said in an interview with the media that all brand businesses and commercial development need to return to the essence of retail, and physical stores are still the operating resources of retail. Offline stores still have irreplaceable advantages online. Consumers can immerse themselves in the goods and touch the real things in online stores, and better understand the characteristics of goods, thus stimulating the purchase demand.
New brands and international brands are fighting online.
It has been two years since the fashion of national beauty cosmetics was blown.
The "2021 National Cosmetic Industry Regional Research Report" shows that in 2020, the number of new cosmetics enterprises in China exceeded 25,000, with a growth rate of 70%. As of November 2021, the number of surviving enterprises exceeded 90,000.
Perfect Diary, Orange Blossom, Winona and other "light of domestic products" were all popular on the whole network for a while, and platforms such as Little Red Book and Tik Tok were all over them. The Insight Report on Domestic Beauty shows that domestic beauty brands have occupied 56% of the market. For the young consumers of Generation Z, the attraction of domestic beauty products even once far exceeded that of international brands.
In 2020, Yixian E-commerce, the parent company of Perfect Diary, a head domestic brand, was listed on the NYSE, becoming the first China beauty group to be listed on the US stock market, with a market value of US$ 16 billion.
However, the good times did not last long, and the evaluation of domestic brand products on various grass planting platforms also became mixed. The perfect diary of the head once became a frequent visitor to the "black list" of beauty bloggers. For example, the share price of Perfect Diary has been going down all the way, and it has fallen by over 90% from the highest point.
At the same time, many traditional offline brands have seen the sweetness of online and increased their investment in online.
Taking Estee Lauder as an example, after the impact of the epidemic, Estee Lauder Group clearly stated that it would make major adjustments to its sales channel strategy and greatly increase its investment in e-commerce channels.
CEO Fabrizio Freda once pointed out in the release of the financial report in FY 2020 that the strong growth of Estee Lauder’s performance mainly benefited from continuous innovative ideas, digital marketing advertisements and Tmall platform. Among them, more than half of Estee Lauder Group’s sales in China market have come from mobile terminals, and Tmall has contributed the most.
In 2021, the GMV of Estee Lauder official boutique 618 Festival increased by over 100% compared with last year, and the GMV of official website applet live broadcast increased by 600% compared with last year. In the "Double Eleven", from the first wave of pre-sale to the first day of the first wave of official sales (from 0: 00 on October 21st to 24: 00 on November 1st), Estee Lauder’s official flagship store ranked first in both Taobao Live Beauty Merchants List and Taobao Live Tmall Merchants List.
In the "Double Eleven" arena, according to CICC data, from the price caliber per milliliter (ml), the lowest discount prices of Estee Lauder small brown bottle, Lancome small black bottle and Shiseido red kidney in 2021 are 8.5 yuan /10.8 yuan /8.6 yuan respectively, in which the small brown bottle is lowered by 21.3% compared with 2019, and the small black bottle and red kidney are compared with 2019. CICC believes that overseas brands began to seize the top position in the best-selling list of Taobao platform in double 11 in 2018, which is directly related to the improvement of cost performance.
In Tmall’s "Double Eleven" brand TOP transaction list in 2021, only Winona of domestic brands entered the top ten in the beauty category. In the makeup category, Saint Laurent, Estee Lauder and Sanxi Yucheng Top3, the perfect diary and Hua Xizi, which dominated the list in 2020, fell behind to the fourth and sixth places.
Obviously, the stage that brands rely on traffic to get "0 to 1" has passed. After the rise of many domestic beauty products, how to realize the long-term development of "1 to 100" is a problem that domestic brands need to face now. Offline has become the choice of many new brands.
Offline layout into a new brand testing ground
The "online celebrity" playing method of explosive products +KOL grass planting+live broadcast is beneficial to domestic beauty products to gain popularity quickly. However, when this mode becomes the "basic operation" of various brands, it is difficult to guarantee the conversion rate, and the cost of obtaining customers is getting higher and higher. How will the brand itself be concerned by more consumers?
With the peak of traffic dividend, a single consumption scene and channel hinder the development, and more and more domestic beauty brands born online aim at a way to enhance their brand power: offline layout.
Taking Perfect Diary as an example, its parent company Yixian e-commerce prospectus shows that by the first three quarters of 2020, there were more than 200 offline stores of Perfect Diary, and by the end of 2019, this number was only 40. The annual report shows that the cost of expanding the offline experience store of Yixian e-commerce has increased from 50 million in 2019 to 300 million in 2020.
In 2019, Tangduo, which was circled with monochrome eye shadow, also tried offline pop-up shop. In September 2020, it officially opened its first store in Hangzhou Hubin Yintai in77. At present, there are 14 offline direct stores in Shanghai, Chengdu, Chongqing, Hangzhou and other first-and second-tier cities.
"At present, the competition of consumer goods brands in China is changing from the incremental market to the stock market. When it comes to the stock market, the market strategy should shift to improving product strength and brand strength." Wu Lingyun, head of beauty cosmetics at Yintai Department Store, believes that since last year, more and more emerging brands have gone offline from online, and department stores have become the main positions for emerging brands to shape their brand power.
Taking Yintai Department Store as an example, Winona and Juduo opened the first store in China and the first store in the city respectively. The colorist of Xinrui Cosmetics Collection Store opened the first store in Zhejiang in Yintai, West Lake, and entered four Yintai department stores in one breath in 2021.
At the same time, brands are also eager to have deeper interaction with fans through physical stores. For example, Winona has set up a doctor in the counter, and young consumers have a deeper understanding of the brand through the "cute" social scene full of brand characteristics created by Tangduo.
Obviously, a beauty brand needs to become an omni-channel brand if it wants to provide consumers with a more comprehensive brand experience after it reaches a certain volume.
Insiders of Orange Blossom told New Consumer Daily that for beauty brands, offline can create a space for communication and interaction with consumers, making it easier for consumers to perceive a brand’s image, aesthetic tendency, product concept and so on.
When a new brand enters the offline, it is not easy to overtake in a corner. The focus is on experience.
After the epidemic, the value of various channels of beauty cosmetics is being reshaped, especially the offline channels represented by department stores.
In 2021, 37 cosmetic brands won the first place in the national single-cabinet sales in Yintai Department Store, among which Dior, YSL, Armani and Deco were the new "national first cabinets", and many brands such as helena rubinstein, Hailan Mystery, Estee Lauder, Shu Uemura and Xiulike also won the "global first cabinets".
Walking into the store, feeling the atmosphere, trying out and experiencing are indispensable contents in brand marketing, especially for products with great personal differentiation such as beauty cosmetics. The 2021 New Consumption Report of Yan Value Economy shows that the demand for experience and service has become a new trend in Yan value consumption.
The relevant staff of the Orange Blossom team said: "Makeup is a category that needs to be decided through experience. There are all kinds of explosions, hot products, new products and joint products in the store, so that consumers can fully experience the fun our make-up products bring to them."
Taking Juduo as an example, the parent company of Juduo, Juyi Group, built a customized store business management system for the brand in 2019 to manage the daily inventory, sales, promotion and marketing data reports of the store, improve the management efficiency of the store, and reduce operating costs.
In addition to the product trial, the offline store of Juduo will also hold activities such as new product launch conference, blogger meeting, member salon and Halloween makeup PK competition to attract consumers to participate in the experience.
At the same time, the opening of beauty shops and beauty salons is also an excellent place to provide services and experiences for consumers. Common high-end brands in shopping malls, such as CPB, LAMER, VALMONT, Xiulike, Sisley, etc., are all overweight beauty salons.
Take Hangzhou Wulin Store of Intime Department Store as an example. In 2021, 11 new beauty salons including nine brands including La Prairie, Hailan Mystery, CPB, Sisley, helena rubinstein and Fresh were opened, which is also the largest number of newly added beauty salons. These beauty salons are located in secluded places on the second and seventh floors of Wulin Yintai, with an area of 10㎡-25㎡, creating a quiet, high-end and private environment. Customers can enjoy this beauty service hidden in shopping malls with brand consumption points. For brands, this is also a marketing strategy of private domain operation.
According to statistics, in 2021, Yintai Department Store added more than 20 beauty salons nationwide, bringing the total number of beauty salons to nearly 70. Chanel, Dior, Estee Lauder and other brands are making an appointment to expand the beauty salon in 2022.
At present, offline is still the most valuable channel. At present, Intime Department Store has 37 brands including Lancome, Estee Lauder, Mystery of Sea Blue, helena rubinstein, Dior, CPB and SK-II, which have become the "first cabinets" in China. Among them, helena rubinstein, Heilan Mystery, Estee Lauder, Shu Uemura, Xiuliko and many other brands also got the "No.1 cabinet in the world".
However, there are still many challenges for new brands to expand offline.
In Wu Lingyun’s view, emerging brands still face problems such as single product structure, few SKUs and no mature offline operation team.
Take Yixian E-commerce as an example, its founder Huang Jinfeng has publicly stated that one-third of the stores have been closed, opened and closed repeatedly due to the epidemic. The Yixian e-commerce annual report shows that the revenue of offline experience stores only accounted for 3.3% in 2019 and 10.1% in 2020.
Turning to Winona’s parent company, Betegnie, the revenue of offline self-operated stores will only account for 0.09% of the main business income in 2020.
It can be seen that new brands generally face problems such as low efficiency and low customer unit price. Compared with online stores, the performance of offline stores is still slightly insufficient, and the long-term profitability remains to be considered by the market. However, if you want to develop a brand, this is indeed the only way. How to build brand power through "two-wheel drive" on and off the line is the key.
Paying attention to experience and service, returning from online to offline is based on the consideration of the long-term development of the brand, presenting the brand image in the form of shops and consolidating traffic in the form of private domain, which is a necessary path to strengthen customer stickiness and enhance brand vitality.
For domestic beauty brands that want to get rid of the "online celebrity" label, doing offline may help them gain higher and longer-term competitiveness