Last week, Yixian e-commerce, known as the "first share of domestic beauty makeup" among Chinese concept stocks, successfully landed on the New York Stock Exchange.
As a company that has only been established for four years, behind its rapid development is the rapid rise of the consumption power of the younger generation in China.
These people are called "Generation Z", that is, the generation born between 1995-2010 and greatly influenced by the Internet.
Domestic beauty brands such as Perfect Diary, Huaxizi, and Kolaqi, which have only been established for a few years, have all accelerated.
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"Generation Z" Consumer Power Rise, Domestic Beauty Makes Out of Acceleration
In an offline store in Beijing selling domestic beauty makeup, the reporter met 18-year-old Xiao Lu.
She came to buy the first set of beauty products in her life today.
Xiaolu's basket contained more than a dozen makeup products of different brands, priced at 819 yuan.
Calculated, the price of each makeup product is less than 100 yuan.
Xiaolu told reporters that the purchase of these domestic brands was because of the low price and the recommendation of his friend Xiao Chen.
Beijing consumer Xiao Chen: I personally prefer exaggerated or colorful eye shadows. The big-name colors upstairs in the mall may be more suitable for more mature women.
I especially like to buy national brand eye shadows.
According to data from market research institutions, as of October this year, about half of the top ten beauty brands that have received the most attention from users are domestic brands.
Brands such as Huaxizi and Perfect Diary have surpassed international big names such as Estee Lauder in terms of user attention indicators.
Young women like Xiao Lu and Xiao Chen are the main consumers of domestic beauty products.
Sun Lei, Chief Marketing Officer of Yixian E-commerce: Statistics show that "Generation Z" and millennials account for 29% of China's total population, and this group of people account for 29% of China's total population of cosmetics consumption. At 59%, we can see that the penetration rate of beauty products among young people will be higher.
Lan Fei, co-founder of Xi Muyuan: We found that to impress female consumers born in the 90s, the real material of the product, the high value of the packaging, and the value for money of the product are crucial.
E-commerce platform data shows that domestic cutting-edge beauty brands are welcoming rapid growth.
This year's "Double Eleven", Perfect Diary ranked No. 1 in cosmetics sales, followed by Huaxizi.
The sales of domestic brands such as Xiaoaoting and Kolaqi exceeded 100 million in two hours.
And behind this, affordable prices and exquisite packaging are the main factors that attract consumers.
Beauty blog advocates Mo Fan: For example, this product uses Cupid's design, and the carvings are particularly delicate, which caters to the girlish hearts of Chinese girls.
People are a little bit reluctant to use it.
Consumers in Guangzhou: The same lipstick and eye shadow, cheaper products may be better.
Why don't I buy more products for less money?
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Fight endorsements, fight products, fight for creativity, domestic beauty brands become popular
Many domestic beauty brands also use celebrity endorsements, online celebrities to bring goods, sharing with talents, etc., and use social platforms to further amplify the brand's influence.
If you search for "perfect diary" on the Xiaohongshu platform, you will see more than 300,000 related notes.
During the interview, the reporter found that many consumers would come to physical stores to find corresponding products with pictures or video clips.
Li Xue is a consumer who is often planted. She spends three to four hundred yuan on beauty products every month. Most of the purchases come from the recommendation of Internet celebrity bloggers.
Chen Chao, CEO of Beijing Guishi Information Technology Co., Ltd.: There will be a "1990" model in the industry, that is, 1% of leading celebrities and opinion leaders, 9% of professional opinion leaders and 90% of amateur bloggers .
Young consumers spend more than 6 hours on the Internet every day. This determines that if young beauty brands want to attract this segment of consumers, the Internet is definitely a necessary channel.
In addition, anchors bring goods, celebrity endorsements and co-branded products are also common methods of domestic beauty brands.
Just the eyeshadow palette, Perfect Diary has co-branded with the British Museum, Discovery Channel, and China National Geographic.
Among them, the joint animal puppy plate sold short 300,000 plates on the day it went online.
The "Doraemon" co-branded beauty product launched by another brand, Kolaqi, has sold more than one million pieces.
Wang Xiwen, head of the new line of Tmall Beauty: The supply chain of the new brand responds quickly, so it will use co-branding, IP, cross-border and other methods, which is more fun and is a way for the brand to quickly win the attention of consumers.
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Going offline and moving towards high-end domestic cosmetics still need to work hard
In the field of Chinese consumption, the beauty industry is one of the big tracks, with a large market and still growing at a high speed.
However, 80% of the Chinese cosmetics market is still occupied by overseas brands, and domestic brands are mainly concentrated in the low-end market.
In the future, how much potential does domestic beauty have?
What more needs to be done?
This 180-square-meter store is located in Zhongguancun, Beijing and opened in May this year.
The reporter saw that the store attracted many young people who came to try makeup.
Some popular products have been sold out, and even the trial packs have been used up.
An Jun, Manager of Perfect Diary Beijing Oumeihui Store: We have a countertop that allows customers to try their own makeup, about 50 square meters, so that customers can choose their favorite makeup.
There are now 200 stores nationwide.
According to the plan, the financing after the listing of Perfect Diary will be used for offline layout, and its total number of stores will exceed 600 in 2022.
However, at present, the offline penetration rate of domestic cutting-edge brands is still very low.
In addition, the low R&D investment has also kept the prices of domestic brands at low prices.
According to the prospectus, the research and development expenses of Yixian E-commerce in 2018 and 2019 accounted for less than 1% of the total net income in the same period.
Compared with the 3.3% R&D investment of international beauty giant L'Oréal in 2019, there is still a big gap.
According to data from the National Bureau of Statistics, China's cosmetics retail sales reached 299.2 billion yuan in 2019, of which the growth rate of cosmetics retail sales reached 12.6%, the fastest growth among all statistical categories.
In the capital market, the domestic beauty industry is also accelerating IPO financing.
Betteni, which owns the makeup brand Winona, has just passed the GEM, and Pien Tze Huang, the leader of Chinese medicine, also plans to spin off its cosmetics business.
Wang Tianshi, managing partner of Hony Ventures: The market share of head beauty groups in Japan and South Korea is about 20%.
China takes Perfect Diary as an example. In the cosmetics industry, the current market share of its single brand may be 5% and 6%, so there is still a lot of space here.
Fan Junhao, Chief Analyst of CICC Daily Cosmetics Industry: We believe that domestic products are expected to achieve faster than the industry average growth rate in the fields of cosmetics, functional skin care products and medical beauty. This is mainly based on the faster growth of domestic brands. The speed of new product development and the positive changes in IP content marketing innovation.