Will the economy get better in 2024? Will the beauty industry get better? ”
After 2023, which has experienced a high start and a low walk, standing at the starting point of the new year, more people are questioning.
The economic environment that is in the critical period of the transformation of old and new kinetic energy, more incomprehensible consumer demand and consumption decisions, and the white-hot industry competition of stock grabbing and multi-dimensional involution are all increasing the challenges and uncertainties of the cosmetics industry in 2024.
In such an era, it is more urgent for brands and enterprises looking for a certain future to recognize the situation and essence, grasp the trend and direction, and seek stability, breakthrough and establishment.
1.Slow. According to the National Bureau of Statistics, China's GDP will increase by 5% year-on-year in 20232%, which is the target set during the two sessions. However, under the development pattern of internal and external troubles, the realization of this data is not smooth, and the driving force of the "troika" is still insufficient. Looking forward to 2024, most international organizations and commercial institutions will account for China's economic growth rate in 2024 at 45% to 48%, some domestic economists and economic research institutes are more optimistic, giving 5% expectations.
In line with the overall economic slowdown, the cosmetics industry is also in a period of shift and deceleration. According to the National Bureau of Statistics, the total retail sales of cosmetics in China will reach 414.2 billion yuan in 2023, a year-on-year increase of 51%, compared to 2022**, this growth is not easy, but it is only back to the growth rate of a decade ago.
In 2024, when consumption and confidence still need to be restored, the cosmetics industry is likely to remain in a slow stage.
2.High-quality development is the last word. Whether it is the first economic work conference at the end of last year or the first meeting of the year in various provinces and cities in recent days, they are closely focusing on the main line of high-quality development. The Guangdong Provincial High-quality Development Conference proposed to "work together with enterprises", and the first meetings of the Spring Festival in Shanghai, Anhui, Jilin, and Fujian will focus on optimizing the business environment and supporting the development of private enterprises.
There is no doubt that those cosmetics companies that have always resonated with high-quality development are ushering in a new era of more favorable policies and business environment.
3.Sing the "big play" of scientific and technological innovation in an all-round way. On the main line of economic development at the national, provincial and municipal levels, the high-frequency keyword closely linked to high-quality development is scientific and technological innovation. For example, the first economic work conference pointed out that this year's economic work should lead the construction of a modern industrial system with scientific and technological innovation; Guangdong Province's economic work pointed out that promoting industrial scientific and technological innovation and developing new quality productivity is Guangdong's strategic move and long-term strategy, and it is necessary to fully support enterprises to be the protagonists of innovation, promote the gathering of innovation resources to high-quality enterprises, and work together to overcome the "stuck neck" technology, forge the "trump card" technology, and develop more "root technology", so that enterprises can stand up their waists.
Judging from the development trend of the cosmetics industry in the past two years, scientific and technological innovation has become a compulsory course for brands and enterprises in the industry, covering all aspects of raw materials, formulas, production process manufacturing, basic research and application, especially local brands and enterprises, which have made full efforts to innovate independently and create their own unique scientific research moat.
Scientific research and innovation will continue to be the highlight of the cosmetics industry in 2024.
4.The competition pattern of national brand vs foreign capital has ushered in an important turning point. In 2023, a number of foreign beauty giants will feel pressure in the Chinese market, including Estee Lauder, Shiseido, LG Lifestyle Healthcare, Amorepacific, Kao, etc., all of which will experience negative growth in the Chinese market. A number of national brands such as Proya, Winona, Marubeni, and Nature Hall are ushering in the spring of their rise, performing well in a number of major promotion activities, and their performance has also achieved double-digit high growth.
However, it should be noted that with the rebound of cosmetics consumption, international brands have further adapted to the trend changes in the Chinese market and channels, as well as the further adjustment of market strategies in China.
For local brands, they must not only face the increasingly intensified "involution", but also have to compete with foreign brands, and 2024 will also be a critical period for "moving forward with a heavy load".
5.The old and new national brands are in a scuffle. In the past year, the presence of cutting-edge national brands that once reached the top with traffic play has been repeatedly reduced. According to big data from the Beauty Industry Yan Research Institute, among the top 10 domestic brands in terms of sales volume of facial care brands on the Tao platform in 2023, domestic classic brands will catch up with and surpass domestic cutting-edge brands with a sales advantage of 82.64 million+. However, the cutting-edge people who have lost the traffic dividend have not stopped, but have focused on cultivating the internal strength of the brand, or increasing scientific research, or deepening product strength to increase brand precipitation. Next, the classic national brands that have been successfully transformed and the new talents who are improving their basic skills will also usher in a more fierce competition pattern.
6.Value for money, value for money, or value for money. In the face of 2024, there will still be many people who choose to "hold their wallets" and consume prudently. Mintel's 2024 Global Consumer Trends Report also mentions that consumers are becoming more realistic in their pursuit of value as budget pressures force consumers to make stricter trade-offs. This also means that whether the value of the product is equal is a key factor affecting the flow of consumption. However, rational consumption is not not not consumption, but to use "good steel on the blade", and the demand for high-quality life will drive "low quality and low price" to continue to be favored by consumers. The consumption concept of "you can buy expensive, but you can't buy expensive" will continue to exist. At the same time, under such a consumption trend, ** will also be the "keyword" of the fierce battle of major e-commerce platforms in 2024.
7.It is also necessary to have a heart-to-heart price ratio. In 2023, dopamine, Maillard, City Walk, Village Super, Camping, Hitchhike, Zibo Barbecue and other popular events or trends around emotional value will emerge frequently, and more and more young consumers are willing to pay a premium for the use value of products and "feelings and experiences" beyond the brand. In Mintel's report on consumers, "relaxed living" is one of the key trends impacting the global consumer market over the next five years. Behind the pursuit of relaxation and self-pleasing is the need for emotional value. For brands, while pursuing the ultimate cost performance, consumers will also pay for the "warm price" and the social and emotional value of the product and brand. By 2024, this trend will also be even more pronounced.
8.AI is a game-changer. At the beginning of 2023, OpenAI released GPT-40 Triggered people's unprecedented discussion on artificial intelligence AI, a flower leads to a hundred flowers to bloom in a similar situation, at the beginning of this year, openAI launched the first Wensheng ** model - SORA, its deep understanding of language, accurate grasp and performance of complex scenes, rich emotions, etc., once again subverted people's perception of the development level of artificial intelligence. It is foreseeable that with the rapid progress of science and technology, AI will change the rules of the game in many industries, including cosmetics, from basic research, market and consumer insights, to product research and development, marketing innovation, etc., artificial intelligence will bring more personalized, efficient and effective solutions, and become a powerful tool to increase the core competitiveness of brands and enterprises.
9.Although Douyin is good, it can't be "greedy". The rapid growth of the beauty sector on the Douyin platform in 2023 is obvious to all, and with the dual blessing of algorithms and content, many brands have also tasted the sweetness, and even directly shifted their marketing focus from Tao to Douyin. But the increase in sales corresponds to high traffic and marketing expenses, while the profits are pitiful. More importantly, just as the Tao Department continued to inject fresh blood into itself by supporting Tao brands, traditional brands, cutting-edge brands, and international brands respectively, Douyin's traffic is not only distributed to brands, but also tends to "white labels" with more considerable income and high compatibility with Douyin's content attributes and consumer groups. Everyone understands the truth that there are more monks and less porridge, for brands that want to fight their way out of Douyin, it is inevitable to continue to burn money if they want traffic, but without profit support, how long can the money be burned?
10.Since the overtaking anchor overturned, the halo of the live broadcast room of the head anchor has also dimmed, replaced by an increasingly prosperous brand self-broadcast and vertical field broadcast ecology. Nowadays, whether it is brushing**, JD.com, Douyin, or even Xiaohongshu, you can find a direct contact point to the brand's self-broadcast room, and it is expected that in 2024, this ecology will also continue to diversify. In addition, in 2023, the scale of the short drama market will grow rapidly, and a number of local brands such as Han Shu, Proya, Gu Yu, etc., will achieve good growth with the help of short drama content marketing. At the beginning of 2024, short dramas will once again set off a climax, and in the future, more cosmetics brands should use micro-short dramas for product and brand marketing.
11.From camping to city walk, to "special forces" tourism and "Erbin" revitalization, all kinds of phenomenal crazes are promoting the recovery of the offline economy and the creation of new consumption scenarios. 2024 has been designated by the Ministry of Commerce as the "Year of Consumption Promotion", and the policy of encouraging the creation of new consumption scenarios will undoubtedly further promote consumption growth. As the home of consumption, offline physical retail will undoubtedly usher in more possibilities.
12.From the perspective of skin care products, around the high-end skin care efficacy, there are unique scientific and technological independent ingredients, scientific formulas and technical systems, content, and quality of large single product strategies will continue to bring dividends to major domestic and foreign brands for a long period of time. This can also be seen from the fact that major mainstream brands have invariably taken large single products as an important part of their development strategies in 2024.
13.The improvement of consumption power, the thirst for high-end efficacy, and the pursuit of cost-effectiveness have also made the more professional and efficient light medical beauty and beauty track continue to be hot**. According to incomplete statistics, among the 9 beauty-related companies that have been successfully listed in 2023, 5 are related to medical beauty and beauty. The layout of light medical beauty and beauty-related products may also be a good direction.
14.Focusing on makeup, in the extremely low-cost involution, base makeup is leading new growth. According to Mojing Insight data, the online market size of facial makeup will reach 449 in 2023900 million yuan, a year-on-year increase of 199%。Among them, the subcategory of base makeup not only achieved rapid growth on the major mainstream platforms, but also achieved high sales growth in the lower channels. As one of the most challenging formulas and technologies, the most sticky and the most repurchased category in makeup, as Chinese consumers continue to awaken their awareness of makeup and pay more attention to skin health, base makeup, especially skin care base makeup, will further release its potential.
15.At the same frequency as the improvement of emotional value, there is also a fierce competition in the perfume market. In 2023, a large number of international fragrance brands will enter the Chinese market, and at the same time, a number of domestic perfume brands will also rise rapidly. According to the Prospective Industry Research Institute**, China's fragrance market will exceed 20 billion yuan in 2023 and is expected to exceed 53.9 billion yuan by 2028. China's perfume market is currently in the stage of low penetration, high growth and high premium space, but it is not easy to eat the cake.
As an "entry-level" product for luxury, it must not only have a brand story that can be deeply rooted in people's hearts, but also highlight social class and cultural tastes, and be able to meet high-order needs such as emotional value, socialization, respect and self-fulfillment. In this regard, international brands and luxury giants are good players, while local brands that started late are more than enough. However, it is worth noting that Chinese fragrances with oriental cultural colors and niche fragrance tracks have run out of the "dark horse", which also means that the opportunity point of local brands is in the soil of local culture.
16.Silver cosmetics are on the rise. In January 2024, the General Office issued an opinion on developing a silver economy to improve the well-being of the elderly, which is also the first "silver economy" policy in China. In the opinions, it is clearly proposed to cultivate the main body of the silver economy, promote the development of brands, encourage the development and application of age-appropriate daily products, develop the anti-aging industry, encourage the deepening of research on the mechanism of aging, human aging models, and human hair health, and strengthen the research and development and application of gene technology, regenerative medicine, and laser radio frequency in the field of anti-aging. Promote the research and development of cosmetic raw materials, formula and production process design and development, etc.
Data shows that by 2023, the number of elderly people in China will be about 300 million, and experts speculate that this data will remain constant at 3-400 million, about twice the number of newborns. The trend of aging is irreversible, and the huge demand of the elderly population involves a wide range, a long industrial chain, diversified business formats, and huge potential, which cannot be ignored.
The introduction of the first "silver economy" policy, especially the encouragement of the development of cosmetics and anti-aging industries suitable for the silver group, has also driven the layout of relevant brands and enterprises in the industry to a certain extent.
Uncertainty and high uncertainty have become the norm today, and in times like this, all plans cannot keep up with change, and all judgments can be reversed against the wind.
But, as Charles Darwin argued, "the species that survive are not the strongest or the smartest, but those that respond quickly to change."