Produced by Smell.
Written by Zhao Xiaojiao.
Beauty "nuclear anxiety".
The second round of nuclear sewage discharge into the sea began.
Since the first round of nuclear sewage discharge in Japan in August this year, more than two months, the once popular Japanese cosmetics in Asia have been strongly resisted, and on social platforms such as Douyin and Xiaohongshu, the beauty area has been attacked by a large number of content seeking to replace, and the beauty "nuclear anxiety" has boiled.
Some people say that this pouring wealth is finally the turn of domestic products.
can take a closer look at those posts seeking substitution, among the various recommendations in the comment area, there are European and American brands that are more expensive than gold, there are old domestic brands that are so cheap that they are sold by the pound, and even dig out the Nordic niche brands that have never gone out of the local area in their lives.
However, there are few new domestic brands that represent the strength of products.
The keywords of domestic beauty are either "affordable bowl", "supporting domestic products", or "xx recommendation".
When domestic automobiles and domestic mobile phones have already gained a firm foothold in the domestic and international markets by virtue of their well-known product hard power.
Domestic beauty products still can't get rid of the narrative logic of patriotism and low prices, still can't break the doubt that "money is spent on marketing and promotion", and still can't really rely on products to get a share of the mid-to-high-end market.
In a field that you think is the easiest to get out of a far leading brand through your own support, there is also a bottomless bottleneck.
According to the "Investment and Financing Data Report on the Beauty Track in the Past Ten Years" released by the Qichacha Data Research Institute, in the past 10 years, a total of 538 investment and financing cases have occurred in China's beauty track, with a total investment and financing amount of more than 35.6 billion yuan. At present, there are more than 210,000 beauty companies in the country.
According to the recent research report released by Galaxy**, the top 7 in the top 10 list of China's cosmetics market share in 2022 are from international cosmetics companies, among which L'Oreal and Procter & Gamble are respectively. Ranked first with a market share of 3%.
1. The second place, far exceeding other companies; Among the local companies, the market share levels of Pechoin, Jialan Group, and Proya are respectively. 5%, which is ranked first.
The above-mentioned research report also said that groups with higher incomes often use overseas travel and ** to buy international brand cosmetics, and this part of the sales is not included in the domestic cosmetics market, so from the perspective of real market consumption, the real proportion of domestic cosmetics will be lower.
With tens of billions of venture capital in ten years, why can't the beauty industry create a powerful new domestic product?
Domestic beauty "stuck neck".
Nowadays, when young people talk about "new domestic products", the three representative industries closest to them come to mind, namely mobile phones, automobiles, and beauty.
The beauty market, which seems to be low-tech and low-priced, may be much bigger and more complex than you think.
According to the National Bureau of Statistics, China's total retail sales of cosmetics have exceeded 400 billion yuan in 2021, and China has been the world's second largest consumer of cosmetics for many years.
What is the concept of 400 billion?
According to the China Association (CAAM), the overall market size of China's new energy vehicles in 2021 will only be 600 billion yuan.
In any market that is so large and still growing rapidly, the rise of domestic products is often accompanied by blood and applause, while domestic beauty products are always accompanied by doubts and dislike.
In fact, the beginning and problems faced by domestic beauty are no different from those of domestic mobile phones and domestic cars.
In terms of time, the development of China's cosmetics market lags behind the United States by nearly 100 years.
As early as the second half of the 19th century, the American cosmetics industry had already started and crossed the stage of brand accumulation, group mergers and acquisitions, and rapid expansion. It was not until the 90s of the 20th century that China's local cosmetics brands officially started, and they were in a weak position for a long time under the suppression of foreign brands, until the rise of the Internet and e-commerce to break through the development.
From the perspective of the industry, domestic beauty products are also facing a severe "stuck neck" problem on the way to catch up with development.
The first is the raw materials.
Due to the lack of natural resources such as coconut oil and palm oil, China's cosmetics are less competitive in basic raw materials, and weaker in fine raw materials with smaller production and higher requirements for technical equipment.
According to public information, there are currently more than 40,000 kinds of cosmetic raw materials available in the world. The EU's updated raw material catalogue in 2022 already contains 30,070 kinds, and the cosmetic raw materials available in the United States also exceed 29,000 kinds, while China's "Catalogue of Used Cosmetic Raw Materials (2021 Edition)" only includes 8,972 kinds of raw materials.
Raw materials, equivalent to the "chips" of cosmetics, largely determine the quality, efficacy, and core competitiveness of cosmetics.
For example, the main ingredient "seaweed extract" in the American brand Lamer cream, the main ingredient "pitera" in the Japanese brand skii***, and the main ingredient "bosonine" in the L'Oreal Group's entire line of brands.
At present, the first echelon of global cosmetics raw material manufacturers is mainly American and European businesses with relatively advanced technology and production level, such as Ashland, Lubrizol, etc.; The second echelon is mainly Japanese merchants, such as Nissin Oliyo, Nikko Chemical, etc.
China's leading raw material suppliers are in the third echelon, representing companies such as Covestro and Bloomage Biotechnology, but they are generally concentrated in the field of low-end raw materials, and are relatively backward in terms of R&D technology, testing and inspection systems and industrial cognitive capabilities, with low added value and a low market share of domestic enterprises.
The second is precision technology and equipment.
Due to the earlier and more mature development of developed countries such as Europe, the United States, and Japan in the fields of fine chemicals, life sciences, genetic engineering, etc., there is an objective gap between China and the international level in terms of emulsification and preparation technology, production equipment, and human testing required for the production of cosmetics industry.
Precision technology, which is equivalent to the "engine" of cosmetics, largely determines the state, use feeling and actual effect of cosmetics.
For example, potential allergens in plant extracts may cause irritation** allergies, vitamin C is unstable in its compositional properties, easy to oxidize and deteriorate, and different carrier forms of some active ingredients can affect the transdermal absorption rate.
The shortcomings of production technology, reflected in the products, have become the shortcomings of many domestic beauty products that have been criticized: poor skin feel, poor absorption, and ineffective effect.
If you get stuck in the neck, you will be stuck in the money, and you will be stuck in the heavy.
When the key raw materials are in the hands of international raw material suppliers, and the key production links are delivered to international foundries, domestic cosmetics manufacturers have to face the dilemma of high cost and risk, low market competitiveness and low profits.
What's more fatal is that after the outbreak of beauty nuclear anxiety, Japanese brands were boycotted, and European, American and domestic brands that used Japanese raw materials and were produced in Japanese factories were also included in the "blacklist".
Who played dead packaging marketing.
In the years when capital is still abundant, willing to throw money at the beauty industry, and consumers are willing to support domestic products, what efforts has the industry made to break through the bottleneck?
In the venture capital circle, there is a marketing strategy called PR First, that is, PR first.
In recent years, new domestic beauty products have fully implemented this strategy, and some brands have even practiced PR First, almost practicing PR only.
Although there are objective shortcomings in domestic beauty in terms of raw materials and precision technology, taking advantage of the wind of Internet e-commerce, the new domestic beauty has naturally unlocked another pair of wings - extremely fast replication production capacity and Internet promotion ability.
Each pair of wings will take you to different places, products and marketing, what you choose to fly by, will fly to different places.
Brands that spend money on marketing to create dreams have burned out of money and woken up from their dreams.
For example, the domestic makeup brands Fomomy and Colorpedia, which have recently announced their closures and store closures respectively, have all been on social media, have been on the big live broadcast room, and have entered the sales charts of Tmall and Douyin.
For example, IT'Small national fashion beauty brands such as S Focus, 3000 Colors, and CROXX have ushered in death before they are remembered by the market because of blindly following the marketing war.
It's not wrong to break through with marketing, but relying on marketing alone will break through and go back to the same place.
For example, Perfect Diary, which spent more than 3 billion yuan in advertising a year, ushered in both performance and stock price after the money-burning marketing war, and the revenue level fell back to 2019, and even pushed the parent company to the brink of delisting.
In terms of marketing rates, L'Oréal and Estee Lauder have maintained their marketing expense ratios at 25% to 30% in recent years. In contrast, in order to compete for market volume, many domestic beauty companies have sales expense ratios exceeding 40%, and the sales expense rate of Yatsen e-commerce, the parent company of Perfect Diary, is as high as 62%.
In terms of R&D rates, the R&D expense rates of L'Oreal Group and Shiseido Group remain above 3% all year round, while the R&D rates of domestic beauty companies are generally around 3%. The proportion is the same, but the amount is a huge gap between 7.9 billion US dollars and 100 million yuan.
You must know that this is in the case that foreign brands have built product moats, and domestic products not only have a late start of products, but also have little R&D investment.
What's more, this 3% R&D investment may have turned around again and developed into product packaging.
For example, Hua Xizi, who was "milked" by Li Jiaqi, was attacked before the "weaning period".
According to the company's data, Huaxizi's parent company, Zhejiang Yige Enterprise Management, has 111 valid patents, of which 79 are appearance patents, accounting for 70%.
Hua Xizi, who relied on exquisite packaging to raise the premium and brush her sense of existence, was also labeled as "flashy".
Some netizens ridiculed, "The girl's collapse when she received Hua Xizi is like buying a luxury car for 300,000 yuan, the core is actually 50,000 yuan Wuling Hongguang, and the big head is all packaging." ”
This is a bit excessive, after all, Wuling Hongguang is cheap and the quality is also leveraged, don't come to the side.
The emphasis on marketing and light on R&D also means high gross profit and low net profit.
At present, among the domestic beauty companies, nearly 8 percent of the company's sales gross profit margin is higher than 50%, and even a considerable number of companies have a sales gross profit margin of more than 75%, while the sales net profit margin of industry companies is generally lower than 20%, and more than half of the company's sales net profit margin is less than 10%.
The money is spent, the money is less, and the scolding is still being scolded, what are you trying to do?
When the packaging and marketing work is getting more and more intense, the aesthetic fatigue of consumers will come faster and faster, superimposed on the debuff of product homogenization and declining consumption power, and the values of 79 yuan eyebrow pencil are comparable to the best values, which will be deeply rooted in the hearts of the people.
Some people say that cosmetics are selling and selling, which is a regression of the industry, but this is also a consumption shift that the market has to take place in the context of the decline in consumption power.
In the past, the grass copywriting was: the money to buy a big-brand lipstick can buy five domestic lipsticks. What a good deal, why not try more for the same money?
The current grass copywriting is: The money to buy five domestic lipsticks is enough to buy a big-name lipstick. What a waste, why not buy a classic model for the same money?
Times have changed. In the past, there was a budget of bold trial and error, but now there is no more, and the conservative attitude of only buying big-name products that will not go wrong is essentially because consumers' budgets have plummeted.
Today's consumers are more inclined to spend every penny and not pay for nihilistic concepts and fancy packaging.
When the marketing clothes are stripped away, the brands supported by the product power still have a way to live, and the brands that are kidnapped by the marketing power are only screwed.
In 2016, the Ministry of Finance issued a "Notice on Adjusting the Consumption Tax Policy for Cosmetics", which had a definition of high-end cosmetics:
High-end beauty, grooming cosmetics and high-end skin care cosmetics refer to beauty, grooming cosmetics and skin care cosmetics that are sold (duty-paid) in the production (import) link (excluding VAT) at 10 yuan (g) or 15 yuan (sheets) or more.
According to this standard, how many domestic products can sit on the title of "big brand replacement"? How many domestic products are worthy of the quality of "high-end cosmetics"?
When a brand is immersed in the narrative of "I'm difficult" for a long time, it is self-moved and uses "packaging marketing" as a competitive self-paralysis, and as a result, even the last fig leaf called "domestic product" will be torn off.
The correct posture for the rise of domestic products.
There are clouds in the Analects, first the words, and then follow them.
To put it simply, you have to make something awesome before you have bragging material.
This is a deep-rooted cultural concept in the hearts of Chinese, and it is also a widely acquiesced consumption concept.
To become the light of domestic products, there are domestic cars and domestic mobile phones, and domestic beauty should also wake up after the defeat of the marketing war:
To rise, it is not only the packaging that rises, but also the product.
Do the hard but right thing.
Domestic automobiles, from the research of parts to the study of engines, from manual assembly to large-scale production, from imitation assembly to independent research and development, every step is difficult, but every step has come through.
This is why BYD, which is now sitting firmly in the top spot of new energy with its strength, Chang'an Geely, which has won a reputation by leaps and bounds in technology, and Chery Wuling, which has found the market positioning with its solid resistance and low cost.
Domestic mobile phones, from copycat foundry to independent self-development, from rough to fine, from low-end to high-end, from domestic to international, each stage has spent money and energy in the most spent.
This is the Huawei Glory, which is steadily moving towards the mid-to-high-end, OPPO and vivo, which focus on the breakthrough of young groups, and Xiaomi Meizu, which takes advantage of the Internet to focus on cost performance.
The same is true for domestic beauty.
If the basic research of automobiles is the engine, and the basic research of mobile phones is chips, then the basic research of beauty is raw materials and technology.
Basic research is difficult, but there are also brands in the domestic beauty industry that have made achievements on this road. Because only by doing the difficult but right thing can you gain a firm foothold in the industry.
For example, Proya has made a trump card product through the research and development of hexapeptide, tretinol, ergothioneine, astaxanthin and other raw materialsWinona, through purslane, green thorn fruit and other plant raw materials to sit firmly on the position of sensitive skin care;Quadi, backed by the IP of Bloomage Biotech's "world's largest hyaluronic acid manufacturer", has won the market position of hyaluronic acid ingredient.
In the list of the top 100 global beauty companies in 2022 announced by WWD BeautyInc in April this year, Proya, Bloomage Biotech, Shanghai Jahwa, Shuiyang Co., Ltd., and Jialan Group, which are good at products, are all ranked higher than Yatsen E-commerce, Shangmei Co., Ltd., Marubeni, etc., which are good at marketing.
From cars to mobile phones to beauty, those companies that are truly worthy of the "light of domestic products" all follow the development path of "classic products-classic brands-brand matrix":
Establish brand positioning with classic products, establish corporate tonality with brand, and use perfect brand matrix as a shield for enterprises to continue to grow through the cycle.
There is still an objective gap between domestic beauty and "far ahead", but the most important thing is to choose the right path first, and leave the rest to the market and time.
After all, consumers will never call you the light of domestic products because you sell national feelings.
From the consumer's point of view, the truth is very simple:
I know it's hard for you, but it's not easy for me either.
I treat you as a brother, but you can't take me for a fool.