Health & Beauty

A few days ago, the country’s first commercialization platform for functional cosmetics was officially launched. It is necessary to help functional cosmetics brands develop offline markets outside of e-commerce channels.

It is reported that the platform was built by Qingdao Baiyang Pharmaceutical Co., Ltd. (hereinafter referred to as "Baiyang Pharmaceutical") to help functional cosmetics brands enter the market from the three dimensions of medical access standards, consumer experience upgrades, and precision marketing programs.

According to Li Zhenyu, general manager of Baiyang Pharmaceutical’s new retail business department, “Currently, functional cosmetics have a market scale of approximately RMB 17 billion in China, 90% of which are online. According to the experience of mature foreign markets, the future offline market and online The online channels should be evenly matched."

So, what are the opportunities for functional cosmetics? What are the problems with current development? What is the way to break the game? These are all issues worthy of attention.

The rising gold track

Regarding "functional" cosmetics, everyone must have heard of the Winona brand. This brand started on Tmall and focused on repairing sensitive skin. With the rise of live broadcast e-commerce and the younger generation's appreciation of "national products and national trends" Sought after, and with several star products such as Shumin Moisturizing Cream, Winona’s parent company Betteni has now exceeded 100 billion yuan in market value, making it the most valuable A-share beauty company.

In addition, the domestic "first share of hyaluronic acid" Huaxi Biology has also expanded its territory in the field of functional cosmetics, and invited Li Huiliang, who shaped Liushen, Megajing and Herborist, to lead the research and development, and successively launched "Run Baiyan" and "BM Muscle Life". "Mibeier", "Quadi" and many other brands have achieved outstanding results. The data shows that these functional skin care products have maintained rapid growth-among them, the GMV of Runbaiyan increased by more than 200% year-on-year, and the estimated growth of Quadi was more than 10 times year-on-year. Lushang Development, another major manufacturer of hyaluronic acid raw materials, has also incubated functional skin care brands such as Yilian.

At the same time, domestic brands such as HomefacialPro, a skin care brand based on ingredients and raw materials, and Yuze, a dermatological skin care brand, have achieved a strong outbreak in recent years. According to the data given by the Head Leopard Research Institute, the GMV of the HomefacialPro Tmall flagship store in 2020 is about 1.56 billion yuan.

The sudden emergence of this category may also mean that "functional cosmetics" is becoming the "golden track" of the cosmetics category.

In fact, there is no strict concept of "functional makeup" in the cosmetics field. However, according to the research report of Tianfeng Securities, dermatology-grade skin care products, functional skin care products and medical beauty "machine name" are all included in this track:

"Dermatology-grade skin care products" refer to the use of mild and scientific formulas, emphasizing product safety and efficacy, with the characteristics of "dermatologists participating in research and development", "following dermatological theoretical guidance" and "medical evidence-based", and are mainly suitable for skin Sensitive issues;

Functional skin care products are endorsed by professional research results, and single products are developed based on the principle of optimizing formula. Most products are named after product + function to strengthen the concept. The packaging of common dropper bottles and secondary packaging enhances the sense of professionalism.

Medical beauty "Machine Brand" products, that is, medical dressing/applied products, such as "Chuang Fukang" and "Fuerjia" under Chuanger Biological.

Note: Dermatological skin care products are close to the concept of "cosmeceuticals" recognized by the public, but according to regulatory requirements, the concept of "cosmeceuticals" is not allowed to be used in cosmetics promotion, so it is replaced with dermatological skin care products.

According to the data of the "2020 Functional Skin Care Products Consumption Insights" released by the Beauty Industry Research Institute, during the period from October 2019 to September 2020, only Taobao and Tmall platforms have sold functional skin care products. Reached 79.6 billion yuan, accounting for 66% of the market share of the entire skin care products.

In addition, public information shows that China's functional cosmetics account for no more than 20% of the overall share of cosmetics, while in Japan and Europe this data has exceeded 60%, and the market for functional cosmetics has huge room for growth.

Behind the explosion of the track, there are multiple factors driving:

First, Chinese consumers are more advocating dermatological-grade skin care products with natural ingredients and functional skin care products of the “Party of Ingredients”; second, young consumer groups have the fastest growth rate in the cosmetics consumption field, and their demand for beauty consumption is more detailed. Points; Third, brand stories of functional skin care products (medical research co-creation, ingredient stories) are more recognized among young consumer groups. At the same time, content marketing and live broadcast e-commerce have become brand "amplifiers", a batch of functional skin care products Brands are growing rapidly; fourth, the demand for functional skin care is rising.

Data show that more than 35% of women in my country belong to the sensitive muscle group, and the long-term wearing of masks brought about by the epidemic may further expand the range of sensitive muscle groups, all of which are boosting the growth of sub-sectors.

Blocking the way: the battle for public domain traffic

Risks and opportunities always go hand in hand.

On the one hand, as more and more domestic and foreign brands enter the Chinese market, there is a risk of increased competition between cosmetics brands and products; on the other hand, as the dividend effect of Internet traffic gradually weakens, customer acquisition costs may increase significantly in the future.

Product disputes are the inevitable outcome of the industry's maturity, but channel layout and customer acquisition may have solutions at the moment.

According to Li Zhenyu, a major challenge in the development of functional cosmetics is traffic. As traffic in the public domain rises, the dividend period for the development of e-commerce platforms is gradually disappearing. The KOL marketing strategy that various brands previously relied on has gradually failed in the past two years. In the past, everyone paid attention to brand stories, but now they pay more attention to ingredients and effects. For brands, this requires a re-examination of the traffic strategy.

Take Winona as an example. As online public domain traffic becomes more and more expensive, it has to pay more attention to offline and trap private domain traffic. For example, it plans to focus on developing self-operated counters in offline pharmacies, which will be managed by trained counters. BA is responsible for explaining products to consumers.

In addition, Li Zhenyu also pointed out that the reason why foreign functional cosmetics are more developed is that they have complete and professional drugstore channels, and the purchase scene is more secure and the experience is more professional. In China, functional cosmetics are at this stage. The sales are mainly online channels; in addition, there are many things that are worth learning in the international segmentation of professional KOLs, such as professional dermatologists. Through these professional endorsements and solid medical clinical data, it can also help functional cosmetics to grow rapidly .

Fu Gang, the chairman of Baiyang Pharmaceutical, added: The development of Japanese functional cosmetics is relatively leading. In addition to the leading product development and production scale, the sales channel-pharmacies must also have well-trained professional pharmacists and professional service capabilities. Strong, so "drug cosmetics" has formed a very mature format in Japan.

On the contrary, China's pharmaceutical retail industry is relatively fragmented and immature, with poor professional service capabilities, and has not formed a service form of "makeup for medicine", which restricts the development of the industry. "Before the functional cosmetics were not well done offline, but there is demand, there is no way to go online."

Fu Gang also said that from another point of view, China’s pharmaceutical retail industry has been rapidly iterative and upgraded in recent years-the most rapid development momentum is professional pharmacies and DTP pharmacies. A large number of prescription drugs are transferred from hospital channels to pharmacies, and even professional professional pharmacists Hospitals are shifting to retail, and the drug purchase scene has rapidly shifted from hospitals to retail. Pharmacies are also rapidly differentiated and professionalized. The development of "drug cosmetics" is a good direction.

Seek a way to break the game offline

In response to the above-mentioned problems, Baiyang Pharmaceutical and mainstream chain pharmacies have made a "shop-in-shop" brand Mengtuohui selection to help pharmacies set up functional cosmetics counters, and select hundreds of categories, supplemented by supply chain and training support. This combines the professional capabilities of pharmacies (connecting doctors and hospital prescriptions) with the experience of functional cosmetic treatment scenarios and the needs of professional guidance.

It is reported that the company has proposed three major strategies for achieving sustainable development of functional cosmetics, namely brand medicalization, marketing professionalization, and channel functionalization to help brands avoid problems such as excessive public domain traffic costs.

Platform medicalization: provide systematic medical solutions for cooperative brands, including clinical and doctor cooperation, release of clinical data, etc.;

Marketing specialization: equipped with professional marketing and offline experiential services and online community management (grafting with doctors);

Channel functionalization: Connect to skin clinics, and conveniently provide consumers with more functional experience about cosmetics, including testing, professional consultation and follow-up monitoring.

It is reported that the above-mentioned platform has now cooperated with more than 10,000 professional cosmetics chain stores, and it is expected that this year will cooperate with the core pharmacy chain to create 500 medicine + functional cosmetics stores.

At the same time, it is worth noting that the State Food and Drug Administration promulgated the "Standards for the Evaluation of Cosmetic Efficacy Claims" (hereinafter referred to as the "standards") last month, adding important variables to the industry.

The "Specifications" point out that starting from January 1, 2022, cosmetics registrants and recorders who apply for special cosmetics registration or general cosmetics registration shall evaluate the efficacy claims of cosmetics in accordance with the requirements of the "Specifications" and publish them on designated websites. Upload a summary of the basis for the product efficacy claim.

It can be said that the cosmetics industry will officially enter the era of management of functional cosmetics. That is to say, in the future, the effect of cosmetics is not written as you want. For the effect of the brand name, you need to provide corresponding test data as support.

You should know that many of the ingredients mentioned in the products that have been launched on the market are still in the laboratory stage and have not undergone strict medical demonstration. The "Specification" is equivalent to a reshuffle of the industry, and only truly effective products can stand out. Elements such as efficacy, ingredients, technology, and safety will become the core judgment indicators of the brand.