/PRZWT/In the first half of 2023, the retail sales of cosmetics products reached 207.1 billion yuan, an increase of 8.6% year-on-year and a record high. According to the analysis of multiple data agencies, the total retail sales of cosmetics in China will approach 600 billion yuan in 2025.
The cosmetics industry has always been a fiercely competitive and innovative industry, especially in recent years. The unsalable inventory, the fragmentation of online and offline mall data, and the emergence of new brands have caused a surge in competitive pressure in the beauty industry. Under the torrent, digitalization is driving the business transformation of the beauty industry.
Beauty is not just a noun, but also a verb.
At present, there are "people who want what they want", and they need "goods at their fingertips" and "ubiquitous markets". The beauty market is still in the growth stage. Beauty companies hope to change the business status quo through digitalization, reduce costs and increase efficiency, expand sales revenue, and promote business model innovation.
However, different categories of beauty brands have different focuses in the process of digital transformation, forming their own unique digital development paths. Established domestic products focus on omni-channel commodity management; cutting-edge domestic products pursue innovation and breakthroughs; international big brands focus on digital upgrading of brand perception; beauty chains pay more attention to online and offline omni-channel integration and supply chain management...
From this, we can see that established domestic products, cutting-edge domestic products, international big brands and beauty chains have each shown their unique digital strategies. Next, we will explore the practices and challenges of these four types of beauty companies on the road to digitalization, and reveal the trends and opportunities of industry development.
1. Veteran domestic beauty: Deeply cultivating channel changes and "coming out of the circle" against the trend
According to the "2023 China Cosmetics Yearbook" released by Glaucoma Intelligence, the annual sales of domestic beauty products in 2023 increased by 9.96% year-on-year, and the market share reached 50.4%.
The rise of domestic beauty is an indisputable fact.
Especially in recent years, as consumers pay more attention to product quality, brand culture and cost performance, domestic beauty brands have gradually won the favor of the market. Veteran domestic beauty brands such as Nature Hall and Huanya have used digital technology to not only give new vitality, but also stabilize their position in the fierce market competition.
For established domestic beauty brands, most of the core orders still come from traditional channels, but with the rapid changes in the market environment, the business model changes brought about by channel changes have become the core focus of these established domestic beauty brands. In particular, how to better empower the small b-end, increase the number of small b-end and improve their stickiness has become the focus of competition among brands.
As a leading brand in established domestic beauty products, Nature Hall Group has more than 40,000 offline sales outlets in various cities across the country. Before the rise of Internet shopping, the extensive establishment of traditional distribution channels was one of the reasons for the success of Nature Hall Group - both to reach consumers and to achieve a win-win situation with distributors.
However, with the change of the market environment, offline outlets are no longer the only retail window for brands and consumers to connect, the huge channel network is very bloated, and due to the uneven service level of retail end points in various regions, it is difficult for consumers to obtain a consistent service experience.
Nature Hall Group was keenly aware of this change, and in cooperation with Yunyi, it took the lead in initiating the "one-stock" model change.
By building sub-warehouses across the country, unified inventory management is realized. This way, the group reduces the intermediate inventory in the channel, avoids problems such as pressure and smuggling, and also digitally manages all processes, allowing it to independently complete intelligent replenishment and intelligent transfer.
In addition, the one-stock cloud warehouse system, order system and policy system established by Nature Hall, as well as the dealer order system, can provide dealers with an efficient and easy-to-use performance delivery platform in one store.
Through the support of the "one inventory" system, the dealer's business activities are fully online, and the responsibility is gradually shifted to serving dealers, and then more focused on serving consumers.
On the whole, through the "one-stock" reform, Nature Hall Group achieved a 13% year-on-year increase in group-wide sales, a 92.4% increase in led sales, a 49.7% increase in digital revenue, and a 60.3% decrease in channel inventory.
Second, cutting-edge domestic beauty: strong kicking, multi-channel efforts to "new" rise
The future of China's cosmetics industry depends on the continuous rise of cutting-edge brands.
Compared with traditional and established domestic beauty brands, the main battlefield and genetic capabilities of cutting-edge domestic beauty brands are significantly different. Traditional brands are more rooted in offline channels, while cutting-edge domestic beauty brands have rapidly emerged in the online market with the help of the Internet and digital technology. Such as Hua Xizi, Ximuyuan, etc.
After rapidly accumulating user resources through online platforms and building brand influence, for cutting-edge domestic brands, "online multi-channel development and offline multi-point layout" is one of their important future directions.
However, due to the limitations of the original OMS system, cutting-edge domestic brands urgently need to strengthen their full touchpoint capabilities and strengthen the unified operation and settlement management of multiple channels to ensure the smooth progress and sustainable growth of their business.
Founded in 2019, "Super Nova" Ximuyuan, GMV reached an amazing 2.30 billion in 2023, and in just over three years, it has been comparable to some beauty brands that have been established for more than 20 years.
Channel strategy and operation are the accelerators for Ximuyuan's brand growth.
In addition to online platforms such as Tmall and Douyin, Ximuyuan has also increased its offline presence. By the end of 2023, it has opened up 31 core merchants, entered more than 8,000 stores across the country, and established in-depth cooperative relationships with WOWCOLOUR, Mingchuang Youpin, Fat Donglai, and RT-Mart.
Of course, the rapid growth of online and offline distribution channels has also put forward higher requirements for Ximuyuan's multi-channel operation capabilities. Previously, Ximuyuan reached a cooperation with Yunyi based on the supply chain mid-platform project to pull through multi-channel inventory & reconciliation settlement, and is gradually realizing refined supply chain management and improving operational efficiency.
International beauty brands: integration scenarios, multi-channel business integration up the ante digital
In the eyes of the outside world, international big-name beauty always seems to achieve good sales, but the truth behind it is far from the truth. In fact, digital layout has long been a key direction for the transformation of international beauty giants up the ante, and beauty giants all hope to achieve greater "fruit" by promoting the digital development of enterprises.
But the international beauty big brand business brand line is numerous and independent, brand power and commodity power gradually reached the peak, marketing methods and activities are industry-class, so the future business direction should focus on the internal, to integrate the scene trend layout, internal collaboration and multi-brand multi-channel business integration as a breakthrough point to explore, looking for new growth points.
Based on the above business needs, many international beauty brands have started the accelerated process of digital transformation.
As an important partner in the digital growth of enterprises, Cloud Migration Technology aims at the pain points of an international big-name beauty in the business. By building a Mini Program mall and building a Mini Program private mall based on the mid-platform, it realizes a trend diary and makeup circle similar to Xiaohongshu. The clerk is transformed into a cloud store owner, and the customer becomes a delivery person. From the public domain to the private domain, it completes the refined operation of consumers and increases online sales revenue.
Beauty chain brands: online and offline integration, two-way drainage empowered
For traditional beauty collection stores, its core business has long been rooted in the operation of offline brick and mortar stores. With the change of the market and the change of consumer behavior, relying solely on the offline store model has become inadequate, while the online and offline combination model has shown great potential in empowering two-way drainage and deeply linking consumers.
A beauty chain brand was established in 2008 and originated from Taobao e-commerce. It opened its first offline store in Shanghai in 2018. It is understood that the beauty chain brand has nearly 10,000 SKUs, covering more than 400 brands at home and abroad.
Focusing on the future digital growth layout, the beauty chain brand partnered with Yunji to achieve inventory sharing and unified control based on the one-stock model, achieve fast performance of omni-channel transactions through OMS, and realize online business operations through the construction of digital channels.
In the omni-channel transaction scenario, the beauty chain brand is committed to achieving fast connection of low-cost new channels. Through the order routing function of the multiplexing platform, it fully covers all transaction channels. This function can intelligently identify the source of the order, and automatically select the best inventory point and delivery method according to the preset rules and algorithms, ensuring that the order can be delivered to consumers quickly and accurately.
Obviously, whether it is an established domestic beauty brand, a cutting-edge domestic brand, or an international beauty brand or a beauty chain giant, in today's increasingly fierce market competition, in order to stand out, it is necessary to deeply understand and meet the core needs of the F-B-B-C full-link business operation of beauty industry enterprises.
In this full-link operation, the integrated operation scenario of bC is regarded as the core goal. This means that the brand needs to be closely connected with consumers, achieve two-way interaction and deep communication, and force the full-link scenario of DTC (direct-to-consumer) to upgrade and transform, and pay attention to the quality and efficiency of traditional business links and the structural innovation of end point channel business.
Whoever can play this game well may be able to seize the opportunity in the future development of the beauty market.
