In China's skincare market, foreign brands used to be unbeatable hegemons. However, in this seemingly unbreakable mid-to-high-end skin care market, which has been occupied by foreign brands for a long time, a domestic company has successfully broken this inherent pattern with excellent technology and perseverance. She is Proya, a domestic cosmetics giant that has undergone three transformations in the past 20 years and has been successfully created by Fang Yuyou.
Looking back at the history of China's cosmetics industry, we can see a distinct phenomenon: before 2013, as long as a domestic brand emerged slightly, it would be easily acquired and "hidden" by foreign brands with abundant funds and large volumes, so as to maintain their market share. However, with its firm stance and excellent technical strength, Proya has successfully resisted the offensive of this wave of foreign brands, and found opportunities for its own development in it.
In 2012, the China Enterprise Mergers and Acquisitions Research Center of Beijing Jiaotong University published an article saying that "foreign companies have established a complete voice and channel advantage in the daily chemical industry, so as to have the pricing power of the entire category." ”
But there's no denying that these mergers and acquisitions are very mature decisions. When the online shopping platform and logistics infrastructure are not yet mature, the value of the channel is often higher than the brand or product itself. M&A can help consumer goods companies save time, which is especially valuable in a fast-changing consumer industry.
In 2013, with the approval of the first 4G license, the era of mobile Internet began, and the logic of "selling goods" in the Chinese market really underwent structural changes.
While this ushered in a new round of opportunities for emerging brands, the online marketing model of e-commerce quickly left these young Chinese companies anxious and lost in the flood of traffic and aimless growth, and thus lost sight of long-term value.
What's even more fatal is that in the prisoner's dilemma where low prices are king, the entrants have no time to care about losses. According to Forbes China, there are at least 20 new cosmetics brands that have collapsed in Series B and since 2019 from 2019 to 2022.
The above are the two touchstones to verify whether Chinese consumer goods companies can build a long-lasting business, but fortunately, Proya led by Fang Yuyou passed the test. To some extent, his choices at each stage are a textbook interpretation of a new technology, channel, brand and market philosophical relationship.
The cover of the October-November issue of Forbes Chinese magazine is Fang Yuyou.
It is worth mentioning that Proya recently released the third generation of ruby cream, which uses the first exclusive patented new cyclic peptide raw material in Chinese beauty - cyclic peptide-161, which breaks through the application problems of poor stability, weak permeability and low affinity of traditional peptide raw materials in the past hundred years.
The release of this product represents the time window for Proya to usher in the time window from R&D follow-up to R&D transcendence.
In 2008, Proya built its own domestic R&D and innovation centerIn 2021, the International Academy of Science was successfully established. Proya has explored more than one in the fields of basic research, applied research, raw material research, and efficacy clinical research.
This year, Proya continued to increase its investment in basic research and showed a stronger sense of "hunger" for technology. From the official opening of the Shanghai R&D center to the completion of the Hangzhou Longwu R&D center at the end of the year, Proya understands that the moment is coming for China to achieve global leadership in skincare products.
The lessons of the past have also reminded Fang Yuyou: the market will always only believe in the first place, and will not believe in the second place.
Twenty years to reshape three times Proya's path to rebirth
Since the 90s of the 20th century, the cosmetics industry has gone through the era of wholesale, channel and new brands. Fang Yuyou is deeply involved and feels the changes in every moment, and has achieved good results at every critical stage. At the turn of the century, a number of foreign cosmetics brands poured into the Chinese market, accelerating local expansion, and the market reshuffle began.
At the end of 2003, Xiao** was acquired by L'Oreal;Forty-five days later, Yue Sai also fell under L'OréalDing Jiayi was acquired by Coty Group, the fifth largest cosmetics company in the world;Johnson & Johnson of the United States acquired Beijing Dabao for 2.3 billion yuan**.
At that time, Fang Yuyou, who held more than 20 cosmetics brands**, put the solution in his own brand. In 2003, Proya was founded. The transformation from a first-class business to a brand owner is Fang Yuyou's first attempt in the face of change.
Channels are the most obvious feature of Proya's early days. Under the logic of "channel wins", Proya cut from franchise stores in third- and fourth-tier cities to department store counters. As of 2017, there are more than 20,000 offline outlets.
Proya and consumer goods 20 years of development are vaguely reflected, and the rapid growth of the stage is only a product of the times. Fang Yuyou mentioned: "To make consumer goods, we need to have such an awareness, and face different things at different stages. Consumer demand is getting faster and technology is changing faster. ”
2017 was a watershed year for Proya. This year, Proya was listed on the Shanghai ** Stock Exchange, and the reorganization of the e-commerce team was the second attempt made by Proya to transfer from offline to online.
The adjustment of marketing strategy is only a few words, but the implementation is a long process.
Proya has spent more than 10 years cultivating its brand in third- and fourth-tier cities, with more than 20,000 outlets and 3,400 first-class distributors. But seeing the annual growth rate of online sales exceeding 100%, and seeing peers and new brands entering the game one after another, Proya had to shift its strategy. Fang Yuyou recalled.
Online is a competition for traffic, and brands often break out of the encirclement with low prices and explosive products.
Proya gave up the box set and launched the Black Sea Salt Bubble**, which was launched and promoted with Douyin as the main position. The sales volume exceeded 1 million boxes that month, and it won the first place in many lists such as Douyin beauty and skin care list, Tmall** monthly sales list, etc.
But the pomp and circumstance did not last. Popular products are popular products, which grow fast, gain popularity, and drop faster. Fang Yuyou realized that a single product without core technology is not a long-term solution after all, and Proya soon launched a functional skin care product - niacinamide whitening product glow bottle.
We invested a lot in marketing at that time, but the response from Tmall was always lacking. Fang Yuyou said frankly that the luminous bottle intends to benchmark the olay small white bottle, "When it comes to niacinamide, everyone will think of the small white bottle." However, our investment has increased the sales of our competitors, because the market will always only believe in the first place, and will not believe in the second place. ”
Either a breakthrough success or a failure. Fang Yuyou learned from the two attempts that Proya wanted to create its own products and make a single product that the brand wanted to do but didn't make. Don't chase the outlet, go and create the next outlet.
At this time, Fang Yuyou noticed the upstart of the anti-aging track - peptides. As a result, Proya abandoned the brand's original concept of hydration and hydration, and invested almost all its resources in longer-lasting products, betting heavily on anti-aging.
Proya's third attempt was like a fateful gamble that required the courage of a strong man to break his wrist. "To be honest, if I don't work out, I don't know what to do next. It's hard to come up with innovative ideas, and after a few attempts, I ran out of ideas in my head. Fang Yuyou said.
In 2020, Proya Ruby Essence will be launched, and the "20% hexapeptide solution" will be compounded with A alcohol at the same time, one can improve dynamic lines, and the other can fade static lines, which will seize the pain points of the market at once. "When the underlying logic is opened, everything goes smoothly. Ruby Essence's business model has proven to be workable and replicable. ”
Ruby essence is an innovation in the direction of Proya's products, and it also helps the brand to reposition. Since 2020, Proya has begun to develop differentiation and transform into a mid-to-high-end skin care track with higher technical threshold and greater growth space. From 2020 to 2022, Proya's revenue growth rate will remain above 20%.
Proya provides an excellent advanced template for domestic cosmetics. But for the brand itself, in the process of self-transformation again and again, Proya reshaped Proya, and finally Proya saved Proya.
Focus on each problem and deeply cultivate differentiated scientific and technological barriers
We have a downward foundation, and more upward space comes from technology. Fang Yuyou said that behind the large single products of cosmetics are R&D barriers, and the underlying logic of medical technology is used to create product differentiation.
Since 2021, Proya has successively cooperated with top scientific research institutions and raw material manufacturers at home and abroad to jointly conduct basic research and obtain customized raw materials.
The partners include Spain Lipotrue Laboratory (peptide), Zhejiang Paipei (peptide), Shenzhen Zhongke Xinyang (synthetic biology), Institute of Microbiology, Chinese Academy of Sciences, etc. The company has made equity investments in some institutions to form a deeper binding on the raw material side.
On the evening of October 23, 2023, Proya released its third quarterly report. As of Q3, the company achieved operating income of 524.9 billion yuan, a year-on-year increase of 3247%；Net profit attributable to shareholders of listed companies74.6 billion yuan, a year-on-year increase of 506%。As a result, Proya is expected to become the largest cosmetics company in China in terms of revenue and profit. ”
Looking at marketing in the short term, R&D in the medium term, and brand in the long term, it is almost equal to the strategy of large single products in the practice of mid-to-high-end cosmetics and skin care products, which is also a key step for Proya to enter the product to shape the brand.
Before Proya's "Ruby Essence" large-scale product exploded, the large-scale single-product strategy had already been used by international first-line brands. Make each ** problem into a brand, and the multi-brand matrix can also resist risks and find possibilities from certainty.
Fang Yuyou believes that large single products are expected to achieve a longer life cycle based on continuous innovation and iteration based on effectiveness and scientific and technological strength.
In 2020, Proya officially launched the strategy of large single products, entering the market with two large single products: ruby essence and double anti-serum essence. The concept of "morning C and evening A" shapes the entry-level anti-aging skincare products preferred by novices, and completes the product layout from a single product to a series matrix by expanding categories and building sets.
Mojing data shows that during the "Double 11" period in 2022, Proya's Tmall sales accounted for more than 20% of the "morning C and evening A" products, and the top five products accounted for nearly 75%. "Proya is not the first brand to do 'early C and late A', but it is the existence of the education market and the leading market. Fang Yuyou said proudly.
In terms of building the company's brand matrix, Proya horizontally covers different categories such as skin care, makeup, washing and care, and functional skin care on the one hand, and on the other hand, expands the target age customers, from 25-35 years old to 18-24 years old.
Professional makeup artist, makeup brand Caitang, scalp health expert OFF&RELAX, and oily skin care expert Yue Fuyuan are becoming the second growth curve.
A younger "L'Oréal China" is slowly unfolding.
The ideal is eternal and down-to-earth
After 20 years of entrepreneurship, the dividends of the times have swept through all walks of life, and opportunities have made the myth of wealth a reality. In a period that may be the outlet, Fang Yuyou and Proya have always focused on the cosmetics industry. Fang Yuyou often said: "Understand one thing". In fact, this is the most basic and difficult thing to do.
Today, Fang Yuyou is willing to attribute the success of Proya to the multiple roles of resources, manpower and time. In the "race for 20 years", a little relief can be predicted, and difficult times must be passed with bated breath.
The following is an excerpt from the conversation with the editors of Forbes China:
Q: Please tell us about Proya's unique brand strategy
A: Multi-brand is something that many companies are doing, not just cosmetics companies.
L'Oréal has always been our benchmark brand, with 43 global brands covering makeup, skincare, fragrance, cosmeceuticals, hairdressing and other fields, each with its own large single product. We are also laying out star products and brand matrix. But if you want to really compete with L'Oréal, then the product must be independent.
When it comes to product R&D innovation. Ruby Essence 1The raw material of 0 hexapeptides comes from LipoTrue, a Spanish international peptide family founded by Dr. Jose Maria Garcia Anton.
In 2018, we went to the Spanish laboratory for the first time, and there was actually a two-year preparation period between 2020 and the launch of the product. Because it's what Proya is looking for, and it's really better at solving consumers' skin problems, but there's no flooding of ingredients on the market.
Proya's innovation ecosystem is systematic, and the company continues to accelerate the construction of R&D talent echelon, and the number of R&D personnel will more than double in the future.
Proya treats every problem as a brand, empowers and incubates "different" brands that meet the "different" needs of "different" consumers, and opens up the whole link of brand development through basic research to product development, to content production and organizational structure.
This is what we are doing now, and it has been demonstrated to be effective and replicable.
Q: What do you think of Proya's content marketing?What kind of brand image and vision do you want to output?
A: Ye Wei (CMO joined at the end of 2018), we were discussing how those foreign beauty brands with a history of 100 years were successful.
Marketing, especially content marketing, is indeed a very important thing for cosmetics, the competition is saturated, and the wine is afraid of deep alleys.
We believe that marketing is not just about advertising, it needs to express the attributes of the product and the values of the brand as accurately as possible, and maintain unity in all communication links, so that consumers can accurately understand and ultimately like our brand.
In recent years, Proya has its own theme promotional video to convey brand values, from the four themes of "gender equality", "love and intimacy", "mental health", "youth and growth" long-term output, and in-depth dialogue with people of all ages.
In the past, girls pursued a few Chanel sticks in their makeup bags. Now, a large part of them will naturally take out domestic lipsticks to touch up their makeup. We'd love to see that change. There are international brands and domestic products in the makeup bag, which actually conveys consumers' recognition of domestic products.
Consumer goods brands want to convey an idea that comes from the product, is higher than the product. Consumers use your product, and they feel good from the bottom of their hearts, and I think that's the character of the brand.
In fact, it is difficult to tell the story of Chinese brands, Proya is currently laying out mid-to-high-end brands, but we always hope to build a cosmetics company with feelings and warmth for the public.
When asked, "Proya has been established for 20 years, what has kept you and your team focused to this day?".Fang Yuyou said that in the fast-changing consumer goods industry, Proya has gone through 20 challenging years with its continuous focus and unremitting efforts. Along the way, they have never stopped, and have always maintained a keen insight into market changes and a deep understanding of consumer needs. Whether it is the transition from offline to online, or the adjustment of the focus of operations to products, or the in-depth research of functional skin care products, Proya has always maintained focus and sobriety.
As Fang Yuyou said, "A little relief can foresee the results." "This dedication and perseverance are the key factors in Proya's success today. At the same time, he emphasized that the founding team, as the leader, needs to always stay sober and guide the team in the right direction. Although novelty is attractive, it is most valuable to be able to focus on one thing, maintain passion, and not blindly follow the trend.
It can be seen that Proya's achievements in the past 20 years are not accidental, but the inevitable result of the multiple effects of resources, manpower and time. They have proved with practical actions that only by sticking to the original intention, focusing on moving forward, and constantly innovating can they be invincible in the fiercely competitive market.