During the epidemic, what is the biggest change in Chinese's daily consumption and shopping? One thing that is very noteworthy is that everyone is paying attention to domestic brands, especially makeup or facial care products. And just like that, those once big brands are becoming less and less popular.
Among these beauty brands, the most volatile must be Estee Lauder. She used to make a lot of money at home with her positioning, but for the whole of last year, her net profit fell by hundreds of dollars. Ninety-two points, what is the reason for such a situation?
Estee Lauder's profits continued to decline.
Estée Lauder once positioned itself as a women's product. Under the banner of anti-aging, a bottle of essence can be sold for thousands of dollars. However, according to the financial report released by Estee Lauder, it can be seen that the momentum was once strong. As it happens, Estee Lauder did suffer a Waterloo last year.
According to the financial report, the crisis encountered by Estee Lauder this time is unprecedentedly cruel. Estée Lauder has not been in such a serious situation since 1995. So why, in 2023, the year that the epidemic seems to have passed, has become the most frustrating year for Estee Lauder.
Estee Lauder believes that the main reason for this is that under the influence of the epidemic, everyone has their own ideas about beauty. Many people are reluctant to spend so much money on skincare and instead focus on more timely products. Enter the hedonistic thing.
However, if you look at other beauty products, you will see that Estee Lauder's rhetoric is nothing more than a placebo for itself. No matter how big the impact of the epidemic is, it will not bring businesses to the brink of bankruptcy. Not to mention Estee Lauder's competitors, whose products are still thriving.
Therefore, one of the main reasons why Estee Lauder failed so miserably is actually because Estee Lauder gradually lost the market in the Asia-Pacific region, especially the Chinese market. Many Chinese no longer buy Estee Lauder. China is the cake. If you can't eat it, it will naturally have an impact on the entire business.
Indeed, no matter what kind of enterprise it is, as long as it can develop in the Chinese market, it can truly realize China's interests. China's population base is too large, and there are many people who are willing to spend money. Many markets have unlimited potential, especially the beauty market.
Since the last century, Estee Lauder has entered the Chinese market. At that time, it was mainly famous in Shanghai. When Estée Lauder entered Shanghai, many companies in Shanghai also announced that they had to wear lipstick. Going to work allowed Estee Lauder to reach the top again.
Just like what was said in the TV series "Blossoming Flowers" directed by Wong Kar-wai, if people at that time could afford Estee Lauder lipstick, they must have the capital to show off to all the young ladies around them. Therefore, it can be seen that Estee Lauder's reputation in China at that time was still very good, and the market value was also very good.
However, in the next choice, Estée Lauder took the wrong step and removed China, a major consumer country, from its own table. Most obviously, Estee Lauder felt that the Chinese market was huge and was ready to build its own factories in the Asia-Pacific region.
Curiously, Estee Lauder did not choose China, which provided a lot of value for itself, but chose to spend billions of dollars to build a factory in Japan and then sell the products produced to China. Estee Lauder would never have thought of that. One day, Japan will discharge nuclear wastewater directly into the sea. China boycotts everything that Japan has, including, of course, their products.
Estee Lauder's own positioning is inaccurate.
In fact, Estee Lauder has always positioned itself as a very high-end, big-name product. The product she launched at that time was actually based on a brown bottle, and the advertising slogan was anti-aging, anti-aging. In fact, it can be seen from this positioning that Estee Lauder at that time hoped that its consumer group could be like the Shanghai girls back then.
Estee Lauder's positioning for herself is to hope that those girls who work hard at the top or on the front line, starting from the age of 25 and ending at the age of 35, not only have financial strength, but also have no pressure in life. I would buy their products because I wanted to take care of myself.
But that positioning is now creating a disparity among Chinese female consumers. After all, under the influence of the epidemic, many people do have money, but are not willing to spend such a large amount of money. They prefer to keep their money in the bank, or to satisfy immediate hedonism, rather than falling into a bubble attracted by capital.
In other words, it is true that everyone's consumption has become more rational, and they will not blindly pursue certain big brands, but pay more attention to ingredients. This means that brands can't charge premiums as recklessly as they normally do. At the same time, many of its own products also appear in China.
So it can be said that Estee Lauder has slowly lost the Chinese market and the hearts of Chinese consumers. In addition, in recent years, Estee Lauder has not launched any outstanding products other than small brown bottles. The pace of product updates has slowed down. There are fewer people, and fewer people are willing to try.
Perhaps Estee Lauder was also aware of her own problem, but at this stage, she made the wrong choice again. Estee Lauder may think that no one wants to buy its products because its ** is too high, so as long as the ** comes down, there will still be many customers.
Why is Estee Lauder's approach wrong? Because everyone has their own spending habits. Women who used to be willing to buy Estee Lauder products don't stop buying them because they've become expensive, but they didn't like them before. Even if Estee Lauder becomes cheaper, people will not buy products from this brand.
On the contrary, it is because of these price reductions that Estee Lauder has lowered its value. At first, the brown vial cost a few thousand dollars, but later it became four or five hundred dollars. It can be said that Estee Lauder made a fortune. Although the discount is more than half, it does not attract that many consumers.
Instead, it's the people who have been buying Estee Lauder. Part of the reason they are willing to buy Estee Lauder is because they feel that Estee Lauder is still a high-end and big-name skincare product anyway, and it is still decent to buy. But now the product's ** has declined. , which does not satisfy their ladylike mentality, so this group of people will also stop buying.
This kind of thing, to put it bluntly, means that consumers have a very serious crisis of trust in the brand. How much should this thing be? If it can reach 400 yuan, is it because the brand has been messing with prices before? , does it mean that the actual ingredients are not very good.
Fall from the altar.
Estee Lauder's situation this time is very funny, the products that are intertwined with her business are basically intact. Only Estee Lauder has suffered a **large**, and the rest of the aristocratic products such as Lamer, or affordable products such as Proya do not have this problem.
So what kind of skincare products do today's consumers prefer? In fact, today's consumers have higher demands for the efficacy and safety of skincare products, which has led to changes in the skincare market. Merchants need to be aware of these issues and then make adjustments.
First, efficient products. Today's consumers are more likely to choose high-performance products when it comes to skincare products. This is because they realize that nursing is not just a daily habit, but an investment that can help them stay healthy. Young, healthy**.
Due to the impact of the pandemic, consumers are increasingly concerned about chemical ingredients and preservatives. Therefore, natural and organic skincare products are becoming more and more popular among consumers. These products are usually chemical-free and made from natural ingredients. , which is more gentle on **.
In addition, with the continuous upgrading of personalized consumption, skin care products have also begun to move towards customization. For example, brands can provide consumers with customized skincare solutions based on factors such as consumers' skin type, age, and problems. A solution that meets the individual needs of consumers, this is a product that is more suitable for women.
Moreover, due to the impact of the epidemic, consumers have become more inconvenient to travel, so small package skin care products are becoming more and more favored by consumers. Almost a lot of merchants have launched such products, they are lighter, easier to carry, and ready to use. Meet your consumers' skincare needs anytime, anywhere.
Conclusion. Estee Lauder simply used its own operations to change its positioning from a high-end product for women to a money-losing product that no one cared about. In fact, there are many reasons for this, all of which are related to the official decision-making level of Estee Lauder. Now it's almost impossible for Estee Lauder to get back to where it was.