Source: Time Weekly-Time Online
Consumption is a video column of’ No.19 Business Research Society’ under Time Weekly. By the reporter of Time Weekly’s consumer group, we can interpret the big and small things in the consumer field in popular and lively language.
With the disclosure of financial reports in the first half of this year, coupled with the prospectus just submitted by a new company, the transcripts of domestic beauty products in the first half of this year are beginning to take shape.
It is worth mentioning that it is different from the previous "fair price" and "flat replacement" route, including most domestic beauty products such as YSG.NYSE, shanghai jahwa (600315.SH), Shangmei Group, Polaiya (603605.SH) and Betani (300957.SZ).
Don’t, cheap beauty is not popular?
If the time is set back to 2019, with the popularity of the first year of live broadcast, the new domestic beauty products at that time can be roughly divided into two categories: one is to follow the "fair price" route like a perfect diary, and the other is to create an elegant and dignified Chinese style. Huaxizi faction.
These two brands are also the first brands with the help of koc, a small red book. At the beginning of the domestic beauty trend, the sales volume was also "leveraged". In 2019, Perfect Diary won Tmall’s make-up sales champion from January to November with sales exceeding 1.5 billion yuan. In the same year, Huaxi’s sales also reached 1.1 billion yuan.
The scene of the hot sale of domestic beauty products in those years seems to be still vivid. However, since the second half of last year, the sales of domestic beauty cosmetics have declined. By the first half of this year, the consumption of beauty cosmetics has obviously become more rational and restrained.
Statistics from the National Bureau of Statistics show that from January to June this year, the total retail sales of cosmetics nationwide was 190.5 billion yuan. Among them, the retail sales in March, April and May fell for three consecutive years year-on-year, and only the first and second ends achieved data growth, and the total retail sales decreased by 2.5% compared with the same period of last year. This is also the first decline in the total retail sales of cosmetics in the first half of the year in the past 10 years.
At the same time, the financial report data of some domestic beauty brands can also explain the problem.
Take the financial report of Perfect Diary’s parent company Yixian E-commerce in the second quarter of this year as an example. Its beauty business revenue decreased by over 50% year-on-year, the overall revenue decreased by 37.59% year-on-year, and the net loss was 266 million yuan. The main reason for the decline in single-season revenue is the decline in the company’s makeup sector revenue. In the second quarter of this year, the income of beauty brands such as Perfect Diary, Little Ondine and Pink Bear of Yixian E-commerce decreased by 50.5%.
However, Yixian e-commerce has already deployed high-end brands in skin care in the early years, such as acquiring high-end brands including Galénic Clanli, DR.WU and British skin care brand EveLom, and the layout of these non-parity brands has also received some positive feedback.
In the second quarter of 2022, Yixian E-commerce Company recorded a net income of 318 million yuan, a year-on-year increase of 49.2%. Among them, the net income of the above three brands increased by 112% year-on-year, exceeding the overall performance growth rate in the skin care field.
Now, it seems that it is wise for some beauty companies that used to focus only on the field of make-up not to put their eggs in one basket. However, the skin care track is also a fierce competition zone.
In the first half of this year, shanghai jahwa, an old domestic brand specializing in skin care products, had a revenue of 3.715 billion yuan, down 11.76% year-on-year; The net profit of shareholders of listed companies was 158 million yuan, a year-on-year decrease of 44.84%; The gross profit margin was 59.91%, down 1.35 percentage points year-on-year, and it once again became a rare enterprise in the industry with a gross profit margin of less than 60%.
Although shanghai jahwa pointed out in the financial report that it was caused by the epidemic situation, it is still difficult to hide its embarrassing situation of "not high enough, not low enough" in products.
At present, the brands of shanghai jahwa’s shanghai jahwa’s beauty and skin care products mainly include Meijiajing, Liushen, herborist, Yuze and Shuangmei. Although their brands have enough "national recognition", if they are refined into various categories, the twin sisters who are positioned in the high-end market do not seem to run out, while Liushen and Meijiajing, which are oriented to the mass market, are also facing the dilemma of brand aging, and Meijiajing even experienced a decline in revenue year after year.
In contrast, beauty brands with mid-to-high-end positioning and characteristic big items are more popular. For example, Shangmei Group and Polaiya, which have played a relatively "slippery" skin care concept in recent years, have launched their main big items with double A alcohol essence, while the latter has early C and late A essence.
If we say that most of the traditional beauty brands are only some items with high profit margins. Then, in recent years, some domestic medical brands have enjoyed the pleasure of making money brought by high gross profit.
For example, Giant Bio’s gross profit margin was as high as 87.2% in 2021. According to its prospectus, in 2021, the company still made a net profit of 800 million yuan despite spending as much as 350 million yuan on marketing.
Fuerjia, who is also a brand of medical beauty, just submitted the prospectus. From 2019 to 2021, the comprehensive gross profit margin was 76.97%, 76.47% and 81.95% respectively, showing an overall growth trend.
Betaine, known as the "first share of medical beauty", earned 2.05 billion yuan in the first half of this year, of which 1.828 billion was from "skin care products" alone, accounting for nearly 90% of the main business income; The income of "make-up" category only accounts for 1.08% of the main business income.
Make-up is not as good as skin care, and selling cheap ones is not as good as selling expensive ones, which has basically become the general trend. According to the incomplete statistics of Lianshang. com, there were 39 financing incidents in the field of beauty cosmetics from January to June 2022, among which 14 financing incidents occurred in the field of skin care, accounting for about 36%; In the field of cosmetics, there were only 4 financing incidents, accounting for about 10%.
Not only domestic products, but also foreign brands are basically this path.
Once a cheap choice, the Korean brand Amore is also going downhill. Since 2019, its makeup brand Yuefeng Shiyi has closed more than 600 stores; Even Amore’s makeup brand Yidi House and high-end brand Heyan have closed all offline stores in the China market last year and this year, which is a losing streak.
Coincidentally, Maybelline, a European and American popular brand, also announced a total withdrawal of cabinets two months ago. You know, in the embryonic stage of the domestic makeup market, Maybelline can be said to be the makeup enlightenment of the post-80 s and post-90 s.
However, in such a large China market, how can foreign beauty brands let go easily?
On May 10th this year, Shiseido launched its first special investment fund in the China market. Shiseido cooperated with Boyu Investment to inject 501 million yuan, with Shiseido accounting for 98% of the shares. It will focus on emerging brands in frontier markets such as beauty and health, as well as investment opportunities of relevant upstream and downstream technical service companies.
At the same time, L ‘Oré al also signed a contract with Oriental Beauty Valley in May this year, announcing the establishment of the first investment company in China market, which is committed to investing in innovative beauty technology. Carita CARIDAE, a French luxury cinema brand owned by L ‘Oreal, also officially entered the China market in August.
Overseas brands are still eyeing the mid-to-high-end layout, and it remains to be seen whether all kinds of domestic beauty cosmetics can move from "online celebrity sales" to "long sales".