Ti du tu Wen 113 th issue
Planning and Production | Titanium Media Visual Center, Editor | Liu Yaning, Drawing | Chu Yanmo
Recently, the live broadcast of "rollover" by a well-known anchor with goods has triggered a discussion among consumers about the price of domestic cosmetics. A product named "Shouwumei Chalk" by Hua Xizi was sold in Li Jiaqi live studio for one in 79 yuan and two replacement clothes were given away. At this price, the price per gram of this eyebrow pencil is as high as 329.2 yuan, which is comparable to gold. If Li Jiaqi’s misconduct hadn’t caused public controversy, consumers wouldn’t have paid much attention to the price per gram of an eyebrow pencil or lipstick.
Not only Hua Xizi’s eyebrow pencil, but now many domestic make-up brands that used to be labeled as "fair price" and "big brand flat replacement" are secretly raising prices. In the past, it was mentioned that domestic brands would think of "cheap bowls", but now many consumers complain that the unit price grams calculated by many cheap domestic brands are more expensive than international brands, and domestic brands are no longer the equivalent of international brands.
In the past few years, domestic cosmetic brands that have been upgraded through various packaging, efficacy and product ingredients have even become a bit unaffordable for consumers. What about the price increase of domestic cosmetic brands? Why do domestic brands, which are synonymous with "cheap and good quality", want to raise prices? In this issue, the titanium media and titanium map try to sort out from the data level.
Recently, the controversial domestic product "Hua Xizi" has been ridiculed as a new monetary unit "Hua Xizi", which is specially used to measure the salary of "migrant workers", that is, 1 Hua Xizi =79 yuan.
How expensive is Huaxizi? On the e-commerce platform, the price of a Huaxizi "Shouwumei Chalk" is 69 yuan, and a replacement core is given, which is as high as 431.3 yuan according to the number of grams. Calculated in the same unit, the eyebrow pencil of Shu Uemura’s machete is only around 60 yuan per gram.
Not only Hua Xizi’s eyebrow pencil, on the e-commerce platform, the price of many domestic brands of eyebrow pencil ranges from several yuan to several tens of yuan. According to the incomplete statistics of titanium media and titanium figure, the number of grams of Hua Xizi eyebrow pencil is not the most expensive. The most expensive one is the eyebrow pencil from Laqi. A 0.14g eyebrow pencil is sold in 70 yuan, and the parity price per gram is as high as that of 500 yuan. The price per gram is indeed comparable to that of gold. However, international big-name eyebrow pencils such as Givenchy, YSL and Dior are far lower than domestic cheap beauty brands such as Odin Jr. and Gloria.
The high cost of Huaxizi is not a case. From mascara to lipstick, from repair cream to essence, there are many different kinds of domestic brands whose price per gram has far exceeded that of international brands. The same is the repair cream of 15g/ml. Winona, a domestic product, needs 5.9 yuan per gram on average, while Avon, a foreign product, only needs 3.9 yuan. The same lipstick is 129 yuan, and the foreign L ‘Oreal is 0.5 grams more than the domestic flower Xizi; It’s also a three-color concealer. Do you choose a Chinese-made colorful soup of 189 yuan /5g or a foreign-made phantom of the opera of 309 yuan /40g? Generally speaking, for the products of the same type and the same effect, some domestic brands win by price, and the total price is controlled at more than 100 yuan, but the average price per gram is higher than that of foreign brands because of the small weight per gram; For products with the same price, some domestic brands lose their advantages because of weight.
However, in recent years, domestic brands have been focusing on the wisdom of "small weight". After all, make-up is a kind of fast-moving new category, and its capacity is too large, which makes consumers easily lose their freshness and can’t be used up. Moreover, lowering the unit price can also make consumers intuitively feel the cheapness of things. Therefore, it may not be a fair view to judge the domestic brand "Kebi Jinjian" only from the unit price.
Even if you don’t look at the price per gram, domestic brands are intensifying on the road of price increase. The data shows that in the past year, the prices of different brands of beauty products have increased to varying degrees.
According to the incomplete statistics of titanium media and titanium degree, by comparing the average prices of some domestic beauty brands during the Double Eleven in 2022 and 2021, it is found that the prices of three domestic brands, Ou Shiman, Han Shu and Zirantang, have all increased by more than one time. Among them, the average price of Ou Shiman series products increased dramatically, from 104 yuan/piece during the Double Eleven in 2021 to 334 yuan/piece during the Double Eleven in 2022, and the price doubled in one year; Except for Ou Shiman, the average price of Kans series products rushed from 216 yuan/piece to 505 yuan/piece within one year, which is higher than the prices of overseas brands such as OLAY and L ‘Oreal. Although the unit price of Nature Hall is low, its increase rate is as high as 130.93%. Overall, during the Double Eleven in 2022, the average price increase of domestic beauty brands is higher than that of international brands.
Behind the continuous breakthrough in the price of domestic beauty brands is the objective reason for the rising cost of cosmetic raw materials in recent years. Recently, many manufacturers, such as Dow Chemical, Japanese PE Co., Ltd. and Longbai Group, issued price adjustment announcements, announcing that the prices of related raw materials and products, including silicone, surfactant and titanium dioxide, would be raised by 5%-23%.
According to the incomplete statistics of titanium media and titanium degree map, from the beginning of August to the middle of September, the prices of raw materials related to cosmetics rose many times with obvious increase. Among them, the price of aniline used in hair dye and nail polish increased the most, reaching 24.28%; The price of titanium dioxide used as a physical sunscreen is the highest among these cosmetic raw materials, which has risen to 16 thousand yuan/ton on September 11, with an increase of 5.42%; There is also butanediol used as a humectant in cosmetics, which has increased by 5.71% in the past month; The price of DMC in silicone, which covers almost all categories of cosmetics, has been rising for more than a month, and the current price has reached 13,000 yuan/ton, with an increase of 2.46%.
In addition to rising raw materials, the entry threshold for cosmetics is getting higher and higher. Nowadays, under the new regulations, before the relevant products of enterprises enter the market, they need to do more "preparatory work", such as freckle whitening, hair loss prevention, sun protection, acne removal, nourishment and repair, and all kinds of testing costs should not be underestimated.
The quotation of third-party cosmetics testing institutions in the market shows that hair loss prevention is the highest price category, and the test needs about 250,000-300,000 yuan; There are also freckle whitening and repair tests, and the highest price also needs about 200,000-300,000 yuan; The price of sunscreen, acne and nourishment is also around 100,000 yuan. So if a product wants to claim multiple functions, it will cost hundreds of thousands to millions, and these are also included in the rising product price.
Nowadays, when more and more young people buy beauty and skin care products, they not only look at the ingredient list, but also study the cost ratio. Therefore, more and more domestic brands have begun to work hard on the formula cost, and began to research their own ingredients and apply for exclusive patent technology, and behind these high requirements are high costs. In the competition of efficacy skin care market, domestic cosmetic brands have increased their investment in research and development.
According to incomplete statistics, in the first half of 2023, among the 10 major domestic cosmetics groups, Perfect Diary’s parent company, Yixian E-commerce, invested 501 million yuan in research and development, which was the company with the largest amount of investment among the 10 major domestic cosmetics groups, but compared with the same period last year, its R&D investment decreased by 26.15%; Also paying attention to R&D investment is Runbaiyan’s parent company Huaxi Bio, whose R&D expenditure accounts for 6.07%, and its R&D investment is at the head of the listed companies of domestic cosmetics groups.
It is worth noting that the R&D investment of Giant Bio, the parent company of Fufumei, increased significantly in the first half of 2023, with an increase of 80.75% compared with the same period of last year, which is closely related to the R&D of powerful products such as "skin and scar repair".
Corresponding to the situation that R&D expenditure accounts for less than 5%, the marketing expenses of domestic cosmetics groups are rising rapidly. With the rise of Internet e-commerce and live broadcast industry, the anchor delivery mode is increasingly favored by capital. In order to tell good business stories and gain revenue, domestic beauty listed companies have always maintained high marketing expenses.
In the first half of 2023, Polaiya and shanghai jahwa Group spent the most on marketing expenses, reaching 1.58 billion yuan, 17 times and 20 times of their R&D expenses respectively; Yixian e-commerce has the most marketing expenses, and 60% of its revenue is used for marketing; However, the marketing expenses of Juzi Bio increased the fastest, which more than doubled compared with the same period of last year, that is, every product sold in 10 yuan would cost nearly 3 yuan for marketing promotion, and the trend of "marketing-driven growth" became more and more obvious. In this regard, Juzi Bio said in the performance announcement: "This increase is mainly due to the rapid expansion of online direct sales channels, which has increased online marketing expenses."
In the industry form of live broadcast, the deep binding between the brand and the head anchor means huge expenditure of marketing expenses. In this incident of Hua Xizi, it is rumored on the Internet that Hua Xizi’s rebate to Li Jiaqi is as high as 60%-80%, even more than 100%. On September 12th, Hua Xizi denied the rumor, saying that the cooperation with Li Jiaqi was the industry average. According to statistics, Hua Xizi only invested 20 million yuan in monthly marketing expenses on the live broadcast platform in the early days. It can be seen that the method of domestic beauty groups relying on Internet traffic to promote explosive products is doomed to be inseparable from the support of a large number of marketing funds.
In fact, high price does not mean low cost performance. In the process of development, brands should take into account the price and achieve the best cost performance. The future of domestic cosmetics brands is long and difficult.
Source of data: Financial reports of companies, business organizations, Capital Securities, Taobao and other public information.