Health & Beauty

According to the observation report of Huacheng import and export data, with the continuous improvement of people's living standards and the increase of national disposable income, especially in the beauty industry, consumers' spending on beauty cosmetics is also rising. According to statistics, the domestic cosmetics market will exceed 500 billion in 2021, and is expected to maintain an annual double-digit growth momentum in the future. Domestic cosmetics companies have been established for a short time and started relatively late. However, in recent years, such enterprises as Pereya have also been born, and the cosmetics industry has unlimited prospects. In recent years, the scale of China's cosmetics market has grown rapidly, and the market scale has expanded rapidly. Under the environment of low consumption affected by the epidemic, it still maintained a high positive growth.

1. Industry space

Benefiting from the improvement of per capita consumption level, the cosmetics industry has an objective growth space. The growth rate of China's cosmetics market has accelerated since 2017. The CAGR (compound annual growth rate) of China's cosmetics market in 2016-2021 is 10.89%, and it will reach 568.6 billion yuan in 2021. Huacheng's import and export data observation report.

Euromonitor Consulting forecasts that the CAGR of China's cosmetics market is expected to be 7.54% from 2022 to 2026, and will grow to 817.7 billion yuan in 2026. From the perspective of growth rate, the growth rate of China's cosmetics market size consistently exceeds that of the United States, France, Japan and South Korea, and the market size is expected to catch up with that of the United States in the next few years.

2. Cosmetics industry chain

The cosmetics industry chain is divided into three parts:

Upstream raw material suppliers, mainly including glycerin, emulsifier, active agent, etc., represent enterprises in BASF, KOSI, HUAXI BIOLOGY, etc;

Midstream brands are responsible for product R&D and production. The production mode is divided into independent production and OEM production. International brands L'Oreal, Estee Lauder, Shiseido, and domestic brands Pereya, Bettany, Huaxi Biology, etc;

Downstream service providers and dealers are responsible for product sales, mainly through online e-commerce, offline supermarkets, department stores, etc.

Midstream brand owners have the right to speak, with the highest gross profit rate in the industrial chain. According to the financial statements of each company:

Upstream link: gross profit margin is 25% - 40%, and the gross profit margin of Huaxi Biomaterials, which has absolute advantages in the field of hyaluronic acid, can be as high as 70% or more;

OEM link: the markup rate is low, and the gross profit margin ranges from 25% to 30%;

Mid stream link: the gross profit rate and markup rate of the brand are both high, with the gross profit rate reaching 60% - 80%. The long-term accumulated brand power of products, channels, marketing and other aspects brings premium ability and pricing power to the cosmetics brand.

The core competitiveness of leading enterprises varies in different links of the industrial chain:

Upstream raw materials: production capacity, R&D technology and customer resources are the most important;

Midstream brand merchants: build a brand moat on the basis of building product strength. The comprehensive consideration of brand strength includes repurchase rate, pricing power, price raising ability, R&D ability, as well as the rapid response and omni channel operation ability of leading enterprises;

Downstream channel providers: traffic distribution of different channels, experience of diversified consumption scenarios, online and offline collaborative development, etc.

3. Domestic heroes compete: multiple brands show their heads

The history of the development of China's cosmetics brands has been in a steady rising state. Although the low-end phenomenon of counterfeiting and cheating still exists, the Chinese local brands still push the whole industry into a rising development period by virtue of constantly deepening research and development technology, profound consumption insight, and constantly optimizing brand construction.

Until today, the strength of some domestic cosmetics brands has gradually been basically improved, and the brand connotation has become increasingly rich, especially the rise of China-Chic, the improvement of national cultural self-confidence, and the new era of domestic cosmetics brands has also arrived.

With the transfer of global consumption center, China will become a new world-class cosmetics brand breeding center. From "Guangzhou Baiyun Meiwan", "China Beauty Town", to today's Oriental Beauty Valley in Fengxian District, Shanghai, it is the "Capital of Cosmetics in the World". Domestic cosmetics brands are constantly following the upgrading and transfer of the cosmetics industry base to revitalize. Especially in brand construction, the brand tonality of domestic cosmetics brands, such as Marubeni, Perfect Diary, Huaxizi, Pelaya, Winona, and Pianzihuang, is relatively clear. The construction of various sales channels and product lines have all come to the fore by virtue of the construction of differentiation. Huacheng's import and export data observation report.

Like the Baicaoji brand of Shanghai Jiahua, Chinese herbal medicine is the core concept of its products. With this concept and Baicaoji's unique positioning of healthy, fresh and natural image, as well as Baicaoji's brand marketing construction, it used to make use of activities with distinctive themes, as well as the "Chinese flavor" creativity of lotus, lotus leaf and plum flower in the line drawing technique of Chinese ink in advertisements, to enhance the Chinese people's favor of the brand.

There is also Yunnan Betaine Winona, which focuses on sensitive muscles and uses natural and non stimulating raw materials. In addition to accurate positioning, Winona's rise is mainly due to Amway, which used to be the front-line anchor of the live broadcast room, and the grass planting layout on various social platforms.

In recent years, the advertising copy of Pelaya is quite popular. I still remember the women's topic copy on March 8, which makes the brand image of Pelaya full of feelings again. In addition, many brands such as Marubeni's eye cream and Perfect Diary's famous brand Pingdi are rising with different marketing forms and brand tones.

If young people are the key words of consumption in recent years, the key word of cosmetics brand is upgrading. Especially in the short video era, a major new brand, white brand, and old brand cosmetics have been making efforts in Tiktok, among which skin care brands focusing on whitening, spot lightening, and wrinkle resistance have become live broadcast blockbusters, and the representative brands are Pereya, Osiman, and the new brand HBN. They have accumulated a large number of mainstream audiences in the Internet, and Huacheng Import and Export Data Observation Report.

In addition to the upgrading of consumer media, the number of "ingredient party" pursuers of cosmetics brands among the consumer population has increased, and people have become accustomed to making purchase decisions on social media platforms by Amway ingredients and comparing different brands. There are also some brand upgrades in terms of cultural confidence, which has become a new direction for cosmetics brands to break through.

In the context of the improvement of people's living standards, China's traditional culture has gradually become the carrier of people's self-confidence. The national style and China-Chic are the results of self-confidence. The classic products of Huaxizi are carved lipstick designed by Tongxin Lock and carved powder with strong national style. Of course, the marketing upgrade of Huaxizi is not only to integrate the design, color and other elements of traditional culture into the packaging, but also to adapt to the cultural self-confidence of consumers, to present the beauty of Chinese culture to the full, and to mobilize national feelings to complete the marketing.

The upgrade of cosmetics brand is also reflected in the rising trend of men's skin care market. More and more male consumers begin to pay attention to their appearance. The upgrading of men's skin care products, such as Dabao Men's Deep Skin Activating Lotion, Lark Antelope Men's Autumn and Winter lotion Moisturizing Cream, Runbaiyan Men's Amino Acid foam Facial Cleanser, all reflect the upgrading potential of cosmetics brands, and also inject more creative soul into the future multi-level marketing, becoming a new marketing blue ocean. Huacheng Import and Export Data Observation Report.