In the past two years, the beauty market has fallen into a long-term downturn due to the sudden new crown epidemic in 2019. Even in a period when the entire market is in decline, the world's leading laboratory skincare brand Dermafirm has gained a firm foothold in the highly competitive Chinese beauty market in just 5 years. So, what's the secret of Dermafirm's success?
According to Euromonitor, China's skincare market will grow by 30% annually in 2022, making it the world's largest skincare beauty market with a scale of 32.9 billion RMB. Dermafirm officially entered the Chinese market in 2018, from the **B2B model to Tmall, Douyin and other major e-commerce platforms leading the Chinese beauty market, leaping into the ranks of first-line brands and successfully opening the Chinese market. In 2022, the transaction volume exceeded 7400 million RMB, won the love of the young generation of the post-95 generation, who have high requirements for cosmetics.
That is, in 2020, Dermafirm will grow rapidly with an average annual growth of about 60%, and during China's largest shopping celebration "Double 11" in 2022, the brand swept the skin care and beauty rankings on major platforms, with sales increasing by more than 3 times year-on-year, and total sales of up to 1100 million RMB, quickly growing into a Korean skincare brand representing K-Beauty. Not only that, according to Alibaba's annual transaction volume last year, Dermafirm ranked 7th among Korean brands and 12th among global medical skin care brands. During this year's "Double 11", Defei (dermafirm) ended with 1Sales of 2.4 billion yuan reached a new high, thus once again proving the strength of the brand that is steadily growing in the Chinese market.
So, how did Dermafirm achieve such remarkable results in the Chinese market compared to other brands?
Solid infrastructure with R&D competitiveness in five core technologies
Solid infrastructure and R&D competitiveness with five core technologies are one of the reasons for the brand's success.
Since its establishment in 2002, Dermafirm has developed high-performance skin care products based on excellent R&D strength, with R&D personnel as the core. At present, the brand has expanded its business in more than 30 countries around the world, including Japan, the United States, and Southeast Asia, with a focus on Korea and China.
Over the past three years, Dermafirm has invested 4% of its average sales in R&D and has invested in technology and technology partnerships with a number of foreign biotech companies. At present, 24% of all employees are dedicated to product research and development.
Dermafirm has three self-owned research institutes, and is committed to the research and development of cosmetics based on the core technologies of five brands, including plant exosomes, liposomes, peptides, microbiota, and lipid nanoparticle delivery technology (LNP technology). Derma Science Lab is responsible for the research of liposomes, LNP and other active ingredient delivery technologies and new morphological researchPeptide Lab focuses on the research and development of high-purity peptides produced in-houseThe Medical Device Lab focuses on the research and development of special products for medical institutions such as fillers and skin enhancers. At present, 10 patents have been obtained for these three research institutes alone, and 4 additional applications are pending.
In addition, Dermafirm's smart factory in Wonju, Gangwon Province, South Korea, enables one-stop services from raw material production to product packaging. Adhering to the brand skincare concept of "skin life, from care", Dermafirm will continue to launch high-quality skincare products formulated with high-purity raw materials with the best ingredient content.
Recently, Dermafirm has upgraded the best-selling series "Defei Perilla Soothing R4 Series" and launched the "Defei Soothing and Repairing Perilla R4 Series", which has attracted much attention from consumers as soon as it was launched. The second generation of the Soothing Series retains the strengths of the previous series of soothing skin, but also adds the benefits of enhancing the skin's self-healing power and stabilizing the skin barrier. The upgraded soothing and repairing series combines the cutting-edge R&D technology of peptides, liposomes, plant exosomes and other brands, and will also become the best-selling products of the new generation of Dermafirm.
Optimize the localization product strategy and expand the diversified distribution platform
Optimizing the localization product layout strategy and actively expanding the diversified distribution platform are the second reasons for success. Just as low-irritation, high-performance products for sensitive skin are attracting attention in the Korean skincare market, skincare products that use high-quality ingredients and have excellent efficacy are very popular in the Chinese market. Therefore, Dermafirm uses high-efficacy toners, lotions, cleansers and other basic skin care products made from high-purity raw materials as its main products.
In addition, with the increasing demand of Chinese consumers for daily sun protection, the brand is also focusing on the research and development of sun protection series, actively supporting the all-round marketing strategy. At the same time, since last year, Dermafirm has joined hands with the powerful actor Lee Dong Wook as the exclusive spokesperson, which can better highlight the brand charm and obtain good visual marketing results.
It is worth mentioning that dermafirm has a strong focus on strengthening its local business capabilities in China. In the second half of last year, through the independent operation of Tmall and Douyin, it hit about 5Substantial sales of RMB 800 million, EBITDA exceeded 1400 million RMB. This year, with the goal of a growth rate 50% higher than last year, we will go all out to carry out marketing strategies to help the brand grow.
Make full use of big data to accurately analyze consumer demand
In order to meet the diversified needs of consumers, dermafirm has set up a new data statistics expert group and built its own intelligent big data analysis platform. Through the platform, it is possible to analyze not only keywords and consumption patterns from major search engines, but also detailed consumer feedback on the company's products and those of competing companies. In order to gain insight into the development trend of the beauty market, the brand has also built an intelligent system that can be flexibly reflected in product development. Through a systematic team of data and statistics, Dermafirm will not only develop brand R&D technology, but also further strengthen its product competitiveness as a global leading laboratory skin care brand.
Go to the global market and become the world's No. 1 cutting-edge laboratory skincare brand
The rapid growth of Dermafirm is not only in China and South Korea, but also in the global market. In the past two years, the average annual growth rate of Dermafirm in the Korean and overseas markets has reached 80%. In particular, in Japan, the U.S., and other countries, the company has expanded its distribution network to B2C channels such as Qoo10, Rakuten** (Japan), Amazon, and Yamibuy (U.S.), focusing on the existing B2B business model, and has accelerated the pace of capturing local consumers. In addition, Dermafirm will also plan to join Southeast Asian platforms such as Shopee and Lazada, and the future global development is even more exciting.
Han Yunzai, founder and CEO of Dermafirm, said: "This is the result of our in-depth research and unremitting efforts on the brand concept, which has truly resonated with Chinese consumers. In the future, we will continue to focus on R&D technology and create high-performance cosmetics that meet the needs of consumers through a systematic big data analysis platform, and make further efforts to gain global consumer recognition. ”