Text / Yangcheng Evening News reporter Ding Ling Xu Zhangchao Tu / Yangcheng Evening News reporter Xu Zhangchao
Perfect Diary's performance is "imperfect", and the halo of "the first domestic beauty makeup company" surrounding its parent company, Yixian E-commerce, is gradually fading.
In just over a year, why did Perfect Diary "fall out of favor" and its performance suffered a roller coaster decline?
A reporter from the Yangcheng Evening News recently visited the offline store of Perfect Diary and interviewed industry professionals to find out.
The total loss last year is still not small
Recently, Yixian E-commerce, the parent company of Perfect Diary, released an unaudited performance report for last year.
Financial data shows that the annual revenue in 2021 will be 5.84 billion yuan, an increase of 11.60% compared with the revenue of 5.23 billion yuan in 2020. In comparison, its revenue growth rate in 2019 and 2020 is 337% and 72.65%, respectively. ; In 2021, the gross profit margin increased by 2.5 percentage points year-on-year to 66.8%, the net loss was 1.547 billion yuan, and the loss decreased by 42.45% year-on-year.
It is not difficult to see that in terms of revenue, the growth rate of Yixian e-commerce has slowed down significantly, and although the loss is shrinking year-on-year, the total loss is still not small.
What's more unfortunate is that on the day of the financial report announcement, it was catching up with the collective plummet of Chinese concept stocks, and the share price of Yixian E-commerce plummeted 39%, falling below the red line of $1.
As early as the beginning of last year, the share price of Yixian e-commerce has fallen from a high of 25 US dollars to the current US$0.97 (closing price on March 18, EST), with a market value of about US$613 million, higher than the highest point. Evaporated more than 15 billion US dollars, a cumulative decline of 96.12%.
Can you go far by relying on star cooperation?
"Wow, perfect diary!" In front of the perfect diary store in Guangzhou Poly Plaza, two young women said in a surprised tone, pointing sideways and excitedly at the store. In the store, there are young girls of the same age who choose from time to time. product trial.
A reporter from the Yangcheng Evening News learned that they came into contact with the brand because of Zhou Xun's endorsement.
In October 2020, the Perfect Diary official announced Zhou Xun as its first global spokesperson.
Various promotional and marketing activities have allowed Perfect Diary to have many young girls users.
During the interview, the reporter learned from Ms. Huang, who had purchased products related to Perfect Diary, that she had seen various promotional videos on Douyin when Perfect Diary first launched the lipsticks.
"Xiaoxiao invited a lot of Internet celebrities at that time, and used that overwhelming publicity to let you know about this thing." Ms. Huang said.
In fact, the cooperation with celebrities in turn, coupled with a large number of KOLs (net celebrities, opinion leaders) experience notes and grass-planting marketing, is very effective for the early perfect diary to obtain customers, and it once achieved corner overtaking and became a domestic beauty makeup. Top brand.
On Tmall Double 11 in 2018, among the makeup brands, Perfect Diary’s sales exceeded 100 million yuan for the first time; on Double 11 in 2019, Perfect Diary directly won the first place in Tmall’s makeup sales…
According to its prospectus, as of September 30, 2020, Yixian E-commerce has cooperated with nearly 15,000 KOLs of different popularity.
The reporter's inquiry learned that as of March 10 this year, there were more than 240,000 notes related to the "perfect diary" on Xiaohongshu.
In terms of star cooperation, according to the reporter's incomplete statistics, since Wang Luping became his brand fashion ambassador in April 2018, a total of 14 stars including Zhu Zhengting, Lai Guanlin, Luo Yunxi and Zhou Xun have endorsed Perfect Diary.
Marketing seems to be lacking
However, as the freshness of products and brands to young consumers decreases, Perfect Diary's way of relying on past marketing to gain customer flow appears to be lacking in stamina.
At the same time, the importance of a solid product foundation comes into play.
On the one hand, the information on the Black Cat Complaint Platform shows that in February this year, consumers complained that the use of Perfect Diary Loose Powder after receiving the goods caused skin irritation, redness, swelling, and allergies.
On platforms such as Xiaohongshu and Zhihu, there are many cases of eyebrow pencil caking, liquid foundation sticking powder, mascara smearing, etc. It is not uncommon for cases of allergies to occur due to the use of Perfect Diary products; at the same time, International big names that have not been able to enjoy the dividends of social e-commerce development are also catching up.
Zhang Yi, CEO and chief analyst of iiMedia Research, said in an interview with a reporter from the Yangcheng Evening News that binding with online celebrities and KOLs to obtain traffic through social e-commerce, live broadcast, etc. has hardly formed its own brand "moat". ”, traditional brands are also easy to copy, as long as you invest money.
"For some old and strong brands, they used to rely mainly on offline stores to expand their customer base, but now they find that the e-commerce model and grass-growing culture can have huge energy. They use the same method for marketing, plus It has technical IP and a large number of users with spending power and high loyalty. If the product quality of emerging brands is not solid, it will be difficult to compete with them.” Zhang Yi said.
Data shows that in the first half of last year, Estee Lauder posted the largest volume on Xiaohongshu, with a total of 2,854 articles, followed by L’Oreal and Lancome. International brands that failed to harvest Xiaohongshu’s early traffic dividends are catching up ; In terms of celebrity endorsements, Huaxizi chose to cooperate with Times Youth League and Liu Shishi, while the spokespersons of L'Oreal and Estee Lauder's product lines are more diverse.
Competition in the skincare track is fierce
It is worth noting that the perfect diary of "out of the circle" with makeup is now trying to tell the story of skin care products.
Financial data shows that in 2020, Yixian e-commerce's skin care product revenue tripled to 740 million yuan.
In 2021, the revenue of the skin care sector will increase by more than 360% year-on-year, and the proportion of total revenue will increase to 21.30%, which is about 1.24 billion yuan.
The highly profitable skin care business has boosted the overall gross profit margin of Yixian e-commerce.
Its gross profit margin will increase by 2.5% YoY to 66.8% in 2021.
Yixian e-commerce also lost less, with a net loss of 1.55 billion yuan in 2021, a year-on-year decrease of 42.50%.
A young brand started with make-up, why is the revenue of skin care products growing so fast?
From the perspective of its skin care brands, in addition to the affordable brand Wanzixinxuan hatched in 2020, there are also Kelanli, Dalfu, and Eve Lom that have been acquired successively.
The latter three have become important forces supporting the revenue of Yixian e-commerce skin care products.
According to a reporter from Yangcheng Evening News who visited the store, they found that in the two product display areas in the store, the products on the shelves are mainly lipsticks, eye shadows, liquid foundations and other makeup products, while skin care products such as facial masks and facial cleansers account for a relatively small proportion.
So, how should an emerging brand that was established in 2017 start to acquire foreign brands to enter the field of skin care products when the moat of color cosmetics products has not yet been established?
In this regard, Zhang Yi told a reporter from the Yangcheng Evening News that there are two main reasons for this: First, Yixian E-commerce realizes that it is not easy to dig deep into the makeup track, so it is eager to enter the capital layout through the acquisition of brands. In the field of skin care, it also reflects the anxious attitude of Yixian e-commerce in operation to a certain extent; the second is to get rid of the "stereotype" of the low-end color cosmetics category in consumers' minds through this acquisition of high-end brands.
Take Eve Lom as an example, it is called "Hermes in the field of makeup remover", and the price of 50ml of classic cleansing cream and makeup remover reaches 490 yuan.
However, Zhang Yi said that for the entire Yixian e-commerce, the skin care category still has a long way to go if it wants to become the main force.
After all, the competition on the skin care product track is equally fierce: in addition to international brands such as La Prairie, La Prairie, Guerlain, etc. firmly occupying the high-end skin care market, there are also Winona, which focuses on sensitive skin, and Huaxi, which focuses on hyaluronic acid. Biology, and Mao Ge Ping, who also started to enter the field of skin care products for make-up.
Journalist's Notes
Quality is the brand "moat"
It should be said that relying on the grass-growing culture and the "strong push" of Internet celebrities to quickly get out of the circle and open up popularity is the key to the success of Perfect Diary in the early stage.
However, with the gradual exposure of problems such as insufficient product features and lack of memory points, the heat generated by marketing has dissipated.
After all, competitive products are the foundation, and marketing is just the icing on the cake. For consumers with real spending power and loyalty, quality is what they value most.
For the current Yixian e-commerce, whether it is makeup or skin care, in addition to focusing on product marketing, the most important thing is to calm down and make products to enhance the competitiveness of the products themselves.
The first is to continuously improve the technical content of products to form consumers' memory points, highlight the cost-effectiveness advantage, become a real "big brand replacement", and enhance the consumption stickiness of young users; the second is to form differentiation between products to ensure that products Has a stable market segment.
Judging from the financial data this time, Yixian E-commerce has also realized the importance of strengthening its own R&D system construction and increased R&D investment.
Last year, the research and development expenses of Yixian e-commerce were 142 million yuan, a year-on-year increase of 113.62%, accounting for 2.43% of the total revenue, while the revenue in 2020 and 2019 accounted for 1.27% and 0.78%.
Although there is still some distance between the R&D rate and the absolute value of the international brands, the gap is narrowing.
According to CICC's research report, in 2020, L'Oreal and Shiseido's R&D expenses will account for 3.40% and 2.90% of their revenue, respectively.
(Ding Ling)