Chinanews client, Beijing, February 4th (Zuo Yukun) When masks have been with us for a year, the makeup still remains a problem.
You buy one less lipstick, and I less buy a bottle of foundation. This little bit of accumulation makes the "beauty industry" that is bright and beautiful in the sun a lot of color.
And their hope of "turning over" may all lie in China.
The picture shows a customer buying cosmetics at a duty-free shop in Haikou City.
Photo by Luo Yunfei
The "Hermes" in hand cream cannot pay rent in the United States
I believe that young people who know something about skin care are no strangers to L'OCCITANE.
In particular, their ace product hand cream is a must-have for many people in winter.
But accompany us through L’Occitane in winter, this winter is a bit difficult.
According to the New York Times, on January 26, local time, L’Occitane’s US branch filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court in order to reduce the increasingly difficult lease obligations after the new crown epidemic.
The main reason for the debt is rent.
Yann Tanini, regional general manager of L’Occitane, stated in court documents that as of the date of application, the company’s lease debt exceeded US$15 million and the landlord held more than US$500,000 in security deposits.
Like all retailers affected by the epidemic, L’Occitane’s physical store business has been greatly reduced.
Therefore, L’Occitane USA stated that applying for bankruptcy protection can carry out reorganization without suspending operations, including closing 23 unprofitable physical stores and adjusting the size of physical stores as a key step in the “store optimization plan”.
"L'Occitane's sales in physical stores in the United States have been declining, while the share of e-commerce revenue is increasing." Court documents pointed out.
Therefore, in the view of industry insiders, L’Occitane’s current bankruptcy is not a bankruptcy in the traditional sense that most people understand, but is closer to a retail transformation initiative.
At the same time, loyal customers in other regions, including China, can rest assured that the bankruptcy of L’Occitane’s US branch will not have any impact on the parent company, other global markets, and other brands under the group.
Moreover, L’Occitane will continue to vigorously cultivate the Chinese market in the future.
L'Occitane hand cream.
Image source: L’Occitane official flagship store
However, "L'Occitane U.S. branch filed for bankruptcy" is hung on the hot search, which is quite scary at first glance.
Netizens said: "As long as you are willing to discount, China can bring you back to life."
It really made everyone right.
According to the results of the third quarter of fiscal 2021 disclosed by L’Occitane, the company achieved net sales of 573 million euros during the reporting period, a year-on-year increase of 4.3%. During the period, all major brands achieved growth.
While "going into bankruptcy" while "growth against the trend", the Chinese market has contributed the most to the company's sales performance, achieving a year-on-year growth of 28.9%.
Revlon lipsticks, which were rumored to prepare for bankruptcy, were bought out. Later, they had their own efforts to reverse L'Occitane's "sales universe". Netizens who were about to move their wallets now have only one simple expectation: L'Occitane, are you discounting it?
Beauty giant Shiseido "survive with broken arm"
L'Occitane is not the only beauty brand in the days when masks cover their faces.
Recently, Japanese beauty giant Shiseido (Shiseido) will sell the news of personal care business.
According to Japanese media reports, this time Shiseido is considering selling various daily necessities including shampoo and skin care products, which are mainly sold to drug stores and other channels, including hair care brand Tsubaki (Tsubaki), male skin care brand UNO, skin care brand SENKA, hair care brand Aquair, etc.
The main reason why Shiseido considers selling its daily necessities business is because its performance has deteriorated significantly under the epidemic.
In fiscal 2020, Shiseido is expected to lose 30 billion yen, or about 1.9 billion yuan, which is the first time since fiscal 2012.
Compared with the high-end cosmetics business, which has a profit margin of more than 20%, although daily necessities have considerable popularity, their profit margin is only 5-10%.
In order to save the performance, Shiseido had to consider selling the daily necessities business with relatively weak profitability, so as to concentrate its operating resources on high-end cosmetics.
Shiseido's high-end brands include SHISEIDO, bareMinerals, CL DE PEAU BEAUT, IPSA, NARS, etc.
According to an announcement issued by Shiseido Group on January 22, the transaction may be completed in mid-2021, but the group has not yet made a final decision.
Shiseido, which has a big business and a big business, is also "breaking arms to survive", and many "old fans" can't help but feel a little bit emotional.
After all, who has not used one or two Shiseido Cleansing Facial Cleanser when he was young?
Shiseido Cleansing Facial Cleanser.
Image source: Shanke official flagship store
But in fact, Shiseido's "high-end" strategy has been pondering for more than one day or two.
"Shiseido has many high-end and low-end brands at the same time, which makes product positioning ambiguous, consumers do not have enough high-end recognition and brand influence." Xu Xiongjun, founder of Jiude positioning consulting company, believes that selling low-end business and fully developing high-end. It is conducive to the shaping of Shiseido's awareness of its high-end brand influence, and it is also the most effective way to save performance.
The performance of the Chinese market has given Shiseido confidence.
According to the financial report, the retail sales of Shiseido's mainland China in the third quarter increased by 8% year-on-year, of which the overall retail sales of high-end cosmetics increased by more than 35% year-on-year, and the e-commerce channel of high-end cosmetics increased by more than 40%.
"By 2030, Shiseido will become the world's No. 1 cosmetics company with high-end skin beauty as its core business." Shiseido Group's global president and CEO Masahiko Uoya, who has always been known for its low-key, rarely spoke with confidence.
Can you overtake on a curve?
It is no longer a new thing for major brands to rely on the Chinese market to "counter-attack", and the Chinese market itself is also silently nurturing its own brands.
The "parity route" that Chinese cosmetics is best at has caused a great impact on Shiseido's low-end business.
As more and more young consumers favor domestic beauty products, the "lights of domestic products" with the labels of "conscience" and "low price" are becoming powerful substitutes for the "Shiseido".
In stark contrast to the large number of overseas beauty brands that have suffered from the pandemic, capital's confidence in the domestic beauty track has risen instead of falling.
According to the data of the cow, from the perspective of the investment and financing proportions of each track in the consumer field in 2020, beauty and skin care is the track with the largest year-on-year increase in addition to food and health products.
The monitoring data of the BrandQ index in November 2020 also shows that the "domestic beauty first share" Perfect Diary has become the second largest beauty sales brand after L'Oréal, and the only domestic brand in the beauty industry that has squeezed into the top five sales. .
In addition, Pechoin, Huaxizi, Prolya, and Kazilan have also entered the top ten sales camps, which means that domestic brands in the top ten sales account for half of the country.
The sales of Perfect Diary Master's products are very impressive.
Screenshot source: Perfect Diary official flagship store
Companies get listed together and domestic brands rise.
The year 2020 that has just passed has been regarded as a great year for domestic beauty products.
However, it cannot be ignored that in the global cosmetics arena, my country's cosmetics industry is still in a weak position compared with overseas beauty brands due to its weak foundation and late start.
According to data from the China Business Industry Research Institute, from January to November 2020, my country’s beauty and cosmetics import and export trade balance is huge, and the export value is equivalent to a quarter of the import value.
"Domestic brands are more competitive in the low-end market by virtue of their high cost performance and channel sinking. European and American brands rely on brand marketing power to occupy a dominant position in the high-end market." BrandQ also pointed out that the lack of competitiveness of domestic high-end brands has led to The consumption of high-end products appears "external prosperity and internal decline". From July to November 2020, domestic brands accounted for less than 6% of the high-end consumer market.
It is also time to consider the "high-end road" for domestic beauty products that have made a fortune with "low-price brands".
BrandQ believes that in the context of increasingly obvious high-end consumer trends, domestic beauty brands should continue to increase marketing efforts and product research and development investment, enhance brand image and consumer awareness, enhance market competitiveness, and control product pricing power.
Do you stick to the "big bowl of parity" or gradually "to the high-end", which path do you prefer to take domestic beauty products?
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