As beauty brands have successively released2022Judging from the annual financial report,2022The year is undoubtedly a difficult one, with a widespread phenomenon of declining income or slowing growth rates. According to data from the National Bureau of Statistics,2022Total retail sales of cosmetics3,936100 million yuan, a year-on-year decrease4.5%.
2022Annual beauty and cosmetics companies generally face significant development pressures. Overall, most companies have seen a year-on-year decline in revenue or a slowdown in growth rate, and retail sales have also seen a year-on-year decrease in the market as a whole. What are the main reasons for this?2023Will the year continue? Domestic brands in2023What are the key factors for achieving rapid development in the year ahead? Many brands are seeking a second growth curve by creating new brands and strengthening existing niche brands. Is the multi-brand strategy an effective method for expanding new revenue? Which types of enterprises are suitable for this strategy, and what are the difficulties and challenges? Frost & SullivanFrost & SullivanFrost & Sullivan, hereinafter referred to as 'Frost & Sullivan' Liu Danni, Executive Director of Greater China, was interviewed by Modern consumption Interview, jointly discussing the development of beauty business enterprises.
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Modern consumption
Q
2022Annual beauty and cosmetics companies generally face significant development pressures. Overall, most companies have seen a year-on-year decline in revenue or a slowdown in growth rate, with the retail sales market also experiencing a year-on-year decrease. What are the main reasons for this?2023Will the trend continue in the coming year? In your opinion, domestic brands in2023What are the key factors for achieving rapid development in the year ahead?
2022Reasons for the slowdown in annual growth rate:
1,2022Affected by the pandemic lockdown, domestic beauty product consumption has continued to be sluggish. Due to repeated outbreaks in Shanghai, Beijing and other places, supply chain logistics have been hindered, compounded by the closure of offline stores.2022The rhythm of the whole year is 'start, stop, start, stop': retail stores in the city can reopen, but factories are shut down, and when factories can resume operations, logistics is then notified that they cannot be shipped.
2Decline in beauty consumption power: Consumers are more inclined to purchase necessities such as food and basic household care products, placing them above beauty and personal care products. During difficult times, beauty products are no longer the top priority. Consumers may downgrade their consumption to cheaper items, lower the priority of non-essential goods, choose to use up previous stockpiles, or even stop purchasing.
2023Annual Outlook:2022year12As the start of the year saw gradual adjustments to epidemic prevention and control policies, it is expected that physical retail will gradually resume normal operations. At the same time, the resumption of work and production coupled with relaxed policies for entering and leaving public places are expected to accelerate consumption recovery. Since the beginning of this year, local governments have introduced corresponding policies to promote consumer spending, exceeding20Cities across the country have issued a large number of shopping vouchers. With continuous strengthening of consumption promotion policies in many regions across the country, residents' willingness to consume is expected to gradually enter a recovery phase, and offline businesses are expected to see a remarkable rebound.
Key factors: Domestic brands need to increase R&D investment and empower the creation of big products from multiple aspects such as raw materials and formulas. The industry has basically moved beyond the stage of winning with the number of new products and is more suitable for a focused product strategy. Precisely combining with consumer trends, creating core products can gradually establish connections between consumers and brands, thereby empowering brand value. In terms of sales proportion, domestic brands rank first3A big product can contribute more than40%Sales volume.
Q
As the growth rate of the main brands slows down, finding new growth has become a common challenge faced by domestic beauty brands. Many brands are seeking a second growth curve by creating new brands or strengthening existing sub-brands. In your opinion, is the multi-brand strategy an effective method for expanding new growth? What kind of companies are suitable for this strategy, and what are the difficulties and challenges? Are there any cases of beauty companies that you think are doing well in multi-branding that you would like to share?
Cosmetics, as optional consumer goods, are specific to certain brands and target specific demographics. This means that a single brand has its limits. In the future, for companies to grow and become stronger, they must go global. Local companies need to develop through multiple brands, product categories, or even mergers to comprehensively enhance their competitiveness and compete on an equal footing with international cosmetics companies.
The biggest challenge faced by multi-brand strategy is the balance between resources and risks. With limited resources, strategic choices and priorities need to be made. For group companies, multi-branding means significant investment and high risk, but not every brand can succeed. How the company coordinates with its existing management team after acquiring sub-brands is a significant challenge. Secondly, due to the need for multi-brand group development, new brands need to deal with the issues of development and adjustment after internal resources are diluted.
Case Study: Furuaida Biotech Co., Ltd. has internally proposed “4+NBrand development strategy focuses on building four main brands. The investment in marketing and technical resources will be evaluated based on the development stage of each brand and the maturity of the market. Those brands that grow faster will receive more resources, with everything oriented towards the market.
*This interview was published in Modern consumption ", the reporter for Hu Fangjie Original title is "The After seizing the dressing table, there are hidden concerns about Perrera >> .
