Produced by One View Business.
Written by Li Yan.
Edited by Wooden Fish.
Now it seems that every year has become a harder year, and this year's market ** is even worse, our communications budget has been cut in half. A beauty industry practitioner responded.
This year, a number of domestic beauty brands that seized the opportunity stood in front of the stage, such as Han Shu took off with a short ** outlet, and Proya won the Double 11 Grand Slam with brand ingredient mentality. However, even though the "rise of domestic products" has become a new trend recognized by everyone, we still have to admit that China's beauty industry is going through a severe winter.
One View Business has counted the industry's store closures, financing, listing and other multi-faceted data since the beginning of this year, trying to summarize from it, who has left the beauty industry this year?Who is favored by capital again?What is the future of the beauty market?
The survival rate of cosmetics companies is less than one year
According to data from the National Bureau of Statistics, from January to November 2023, the total retail sales of consumer goods 427945 billion yuan, a year-on-year increase of 72%。Among them, the total retail sales of cosmetics were 384.3 billion yuan, a year-on-year increase of 47%；The total retail sales of cosmetics in November were 54.8 billion yuan, down 3% year-on-year5%, the growth rate is lower than **.
In parallel with the slow growth of total retail sales of cosmetics, there are a large number of store closures.
A search by the keyword "beauty" found that there were 5,328 cosmetics companies that had been established for less than one year and that their registration status was abnormal, including "cancellation, revocation, revocation, suspension of business, closure of business, liquidation and order to close".
In other words, there are more than 5,000 cosmetics companies with a survival cycle of less than one year.
Just this month, two well-known cosmetics companies are facing bankruptcy liquidation. One is Shanghai Huayimei Cosmetics, the parent company of Zeping, a skin care brand that has generated sales of 100 million yuan, and the other is Hangzhou Naturalist Brand Management, the parent company of the beauty collection store Only Write
According to incomplete statistics from One View Commerce, 11 well-known domestic cosmetics brands have announced the closure of stores this year. 11 well-known overseas brands have announced their closure*** withdrawal from the Chinese market.
In general, makeup is the most affected category in the entire beauty industry. A total of 5 domestic makeup brands ceased operations, and 7 overseas makeup brands withdrew from the Chinese market.
According to blue-eye intelligence data, the size of the makeup market in the first half of 2023 will be 7664.7 billion yuan, a year-on-year increase of 104%, but the recovering market is being snatched up by a large number of new brands. Tao and JD.com, where international makeup brands gather, saw a year-on-year decline in GMV of 61% and 221%, which is evident in the weakness.
However, in contrast to some domestic cutting-edge cosmetics with dismal business, on this year's Double 11 Tmall makeup list, domestic makeup brands including Caitang, Hua Xizi, Mao Geping, and Hua Zhizhi ranked among the top 20 in terms of turnover. In the world of makeup, the siphon effect of the top brands is starting to appear.
Since the beginning of this year, many Japanese and Korean brands have also eaten "closed-door" in the Chinese market. In this statistics, 7 Japanese and Korean brands announced their withdrawal from the Chinese market this year, of which 5 are makeup brands.
One View Business Observation found that the beauty brands that closed their stores this year are all taking the affordable route. According to Yuan Shuai, deputy secretary-general of the Zhongguancun Internet of Things Industry Alliance and executive director of the high-quality development promotion project of specialized and special new enterprises, the beauty market is already fiercely competitive, and brands need to form their own characteristics in order to differentiate competition, and also need to have innovation and technological content, otherwise it will be difficult to survive. Affordable makeup is a track with a lower threshold, and its ability to resist risks will be relatively weak.
Money is pouring into efficacy
As of press time, according to incomplete statistics from Yilan Business, including beauty brands, raw material manufacturers, beauty platforms and ** merchants, a total of 49 financings will occur in the domestic beauty industry in 2023. Among them, nearly 40 financing went to raw material manufacturers.
Obviously, synthetic biology has become the most favored track in the beauty industry this year, with 17 financings related to synthetic biology. At the same time, among the 49 financings this year, nearly 10 financing of nearly 100 million yuan and more than 100 million yuan were carried out around synthetic biology companies.
In fact, there are many synthetic biology-related companies that have been established for less than 3 years. For example, Wuhan Hopson Technology, Yiru Technology, Yuanyi Biotechnology, and Zhisan Biotechnology, which were established in 2021, and Weixin Biotechnology, Enokike, etc., which were established in 2022.
Several R&D personnel of beauty companies told Yilan Business that this is because, on the one hand, the existing cosmetic raw materials have pain points such as large differences between batches, difficult extraction of animals and plants, and low yield, and synthetic biotechnology can effectively improve production, reduce costs, and increase the stability of product batches. On the other hand, synthetic biology meets the current needs of social environmental protection and sustainable development, and the national policy level has given greater support to synthetic biology.
In the view of Guo Henghua, chairman of Huaheng Biotechnology, "the future of the synthetic biology industry is infinitely vibrant, and the current industry has just begun." ”
Under synthetic biotechnology, it is the recombinant collagen track enterprise that is at the forefront of the tuyere. According to Frost & Sullivan data, it is expected that by 2027, the overall market size of collagen in China will reach 173.8 billion yuan, of which the market size of recombinant collagen products will be 108.3 billion yuan, accounting for 623%。
On November 4, 2022, the "first share of recombinant collagen" Juzi Bio was listed on the Hong Kong Stock Exchange, and its brand Kefumei once became a hot item, ranking TOP1 in sales of many sub-categories on Tmall and JD.com.
International beauty giants and domestic leading beauty groups are also increasing their deployment of recombinant collagen. For example, L'Oréal recently released the new Little Honey Pot 20 cream, the main recombinant collagen of Jinbo Biology;At the 2023 Recombinant Collagen Technology Summit, Freda also officially announced its entry into the collagen medical beauty track.
However, there are also some beauty R&D personnel who still have conservative opinions on this technology, in their opinion, the biosynthesis technology of hyaluronic acid is mature enough, although there is a lot of technical imagination space for recombinant collagen, but it will take a certain period of time to transform it into real revenue and profit of the enterprise.
In addition to the field of synthetic biotechnology, medical beauty skin care brands and a very small number of pure makeup skin care brands have also received different amounts of financing, and overall, the financing trend in 2023 is still efficacy-oriented.
Going public is tough
In 2023, the beauty industry will face the problem of "difficulty in listing".
Up to now, a total of 7 beauty and personal care companies have been successfully listed this year, including 2 listed on the Shenzhen Stock Exchange, 2 listed on the Beijing Stock Exchange, 1 listed on the Shanghai Stock Exchange, and 1 each listed in Hong Kong and U.S. stocks. Compared with 12 in 2021 and 7 in 2022, the number of listed beauty companies this year has decreased but not increased, and the IPO form is still severe.
The companies that have been successfully listed on the A-share market include Fuerjia, which is well-known to consumers as "medical beauty**", Dengkang Dental, the parent company of Lengshuling, Jinbo Biotech, which has the only three types of medical device products for recombinant collagen injection in China and is favored by L'Oreal, Runben Biotech, which is the first stock of baby care and mosquito repellent, and Wuxi Jinghai, the first stock of amino acid raw materials.
Taking Fuerjia and Dengkang Dental as examples, the prospectus of Fuerjia shows that from 2018 to 2022, Fuerjia's revenue will increase from 37.3 billion yuan increased to 176.9 billion yuan, with a cumulative revenue of more than 6.7 billion yuan in 5 years. While growing rapidly, its gross profit margin has almost always remained at a high level of about 80%.
Dengkang Dental has a good record in the field of toothpaste segmentation. Only in the offline sales channels of toothpaste, in 2021, Dengkang Dental accounted for 6 percent of the market share in retail sales83%, sales market share accounted for 995%, ranking first in the industry.
Fourth, the second local brand. In 2022, Dengkang Dental will continue its previous steady growth trend, achieving operating income and net profit of 131.3 billion and 13.5 billion yuan, a year-on-year increase of 1495% and 1325%。
In the same year, six companies, including Mao Geping, Misf, Huanya, the parent company of Franlinka, Ba Wei Co., Ltd., a beauty OEM company, Lalami, a beauty agency operator, and Pai Peptide Biotechnology, a raw material company, suspended their IPOs before and after.
Among them, according to the previous analysis of Yilan Commerce, Mao Geping, as an IPO nail household, may lack competitiveness because he relies too much on the Maogeping brand and has low R&D investment, and does not have a self-built cosmetics production lineUniasia Technology is too dependent on offline channels such as Watsons, and it is difficult to guarantee the continuous growth of the company's future revenue, and there are still problems such as a long construction period for online channels. In general, several companies that have suspended IPOs still have obvious shortcomings.
According to Pan Jun, director of global commodity strategy consulting at Bain & Company, the lack of R&D and innovation capabilities of beauty companies and the single profit model may be the reason why it is difficult to go public.
Of course, the tightening of relevant policies is also a major factor in the difficulty of listing beauty companies. On August 27 this year, China's ** Regulatory Commission announced that it would tighten the pace of IPOs in stages according to the recent market conditions to promote the dynamic balance of investment and financingIt is strictly required that the funds raised by listed companies should be invested in the main business, and diversified investment is strictly restricted. Obviously, in order to successfully go public, beauty companies need to establish deeper core technical barriers.
Overall, the increase in store closures and reduced financing reflect that the beauty industry is still going through a cold winter. But even so, the subdivision track represented by synthetic biotechnology is still bucking the trend, and efficacy and sustainability will create more imagination and possibilities in the future. At the same time, low-tech enterprises will still be eliminated in large numbers.