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GMV lagged behind the competitive products for two months in a row.
Tmall cosmetic first desire offline
Huang Zhuang, Haidian, Beijing is not only a holy place for offline education, but also many beauty brands. The first store in Beijing is located on the first floor of European and American shopping malls. Two walls in the store are glass windows facing the street, and five or six counters are filled with eye shadow trays, liquid foundation, lipstick and other makeup.
It is said that there is an activity of "reducing 299 100". A girl asked, "Why is it so cheap? I used to buy it online. " The shopping guide explained that there are many offline activities, and the flow of people has been quite large since it opened in May, especially the makeup, eye shadow and brushes are selling well.
Figure/vision china
As the head domestic brand of Tmall Makeup, Perfect Diary plunged into the offline business. According to the official introduction, as of August, 1 1 has opened 160 stores, including 120 new stores this year, with a target of 200 by the end of the year and more than 600 stores in 2022.
The perfect diary has deep pockets. On August 17, the science and technology media "Information" reported that Perfect Diary was looking for a new round of financing of1-200 million US dollars, with a successful valuation of 4 billion US dollars. At the beginning of March this year, Perfect Diary just completed the financing of 1 billion USD, with a post-investment valuation of about 2 billion USD. For the latest financing rumors, Perfect Diary expressed "no response" to AI Finance.
According to insiders of Intime Department Store, Perfect Diary is communicating with shopping malls to lay a large number of counters, and other make-up brands such as Mao Geping have also begun to settle in offline shopping malls. In addition to the beauty brands opening their own stores, many brands of pure channel beauty collection stores are also casting nets. The colorist of the collection store under KK Group, which just got financing, copied nearly 100 stores within two months after the epidemic was controlled. It is estimated that 200 stores will be opened by the end of August.
Chen Jianyi, founder of Venus Marble, a make-up brand, found that this year, domestic make-up began to exert its strength offline, but due to the epidemic, various companies only concentrated their efforts in recent months. "The perfect diary is the ceiling of net makeup. They earned 3 billion last year, but the online is basically saturated. "
Perfect Diary used to be the first brand of Tmall domestic makeup. When I participated in "Shuang 1 1" for the second time in 20 19, the total turnover exceeded that of international brands such as MAC, making it the first domestic brand to top the makeup list of Tmall's "Shuang 1 1". Some insiders of L 'Oré al have revealed to AI Finance and Economics that Korean Amore has been excluded from their research list and a perfect diary has been added.
But this year, the perfect diary has gradually faded. According to the data given by Huachuang Securities Trading Group, in online sales, in May, the perfect diary was 202 million yuan, which was 3 million yuan behind the peers in China; June perfect diary GMV 654.38+0.98 billion yuan, 37 million yuan behind Huaxi Zi.
AI Finance and Economics asked the two companies for the authenticity of this set of data, and neither party responded. The founder of another make-up brand said, "The data is true".
The slowdown in online growth and the increase in customer acquisition costs have given online celebrity brands the impetus to extend offline.
Bai, a cosmetics industry management expert, told ai Finance and Economics that the traffic algorithm of most social media has changed from customer acquisition to input-output ratio. Originally, it was only how much traffic to buy. Now it is necessary to calculate the actual order rate after drainage. "Online consumers are saturated and the cost of obtaining customers is already high. Most brands can get 1.2 yuan, 1.5 yuan and even 2 yuan have a good sales effect, and the top brands can achieve 65438.
This has a great influence on the perfect diary. Mainly rely on the early stage when the traffic cost is not high, and rely on new channels to grow. The black box Growthbox counts the history of the perfect diary:1.40,000 little red book notes,1.30,000 Taobao live broadcasts, nearly 10,000 information stream advertising materials, and thousands of videos of Tik Tok, Bi Li, and Aauto Quicker.
Sue, an entrepreneur of a cosmetics brand, talked about the perfect diary. "MCN's system has been perfected and it continues to buy without bargaining. MCN will think that the high price of makeup directly affects the waist brand. The current purchase price is more than five times that of 20 18. " He revealed that the price of Tik Tok reds with more than 2 million fans who can bring goods slightly has risen to more than 500,000 yuan.
This directly affects the gross profit level of the perfect diary. According to Time Weekly's report in May this year, the public relations department of Perfect Diary said that the gross profit of the company is lower than the industry level at present, and it is even reported that the marketing expenses of Perfect Diary alone account for 40%-50% of the income.
The perfect diary has not yet responded to the verification of AI Finance, and Su recognizes the statement that the perfect Maori industry is at the bottom. According to his understanding, the gross profit of Perfect Diary should be less than 10%, while the gross profit of channel stores of his brand exceeds 30%, and that of Tmall stores reaches 48%-49%. "Marketing expenses account for about 30% of income, which is healthy." The gross profit margin of international brands is generally above 70%. Take L 'Oré al, the target of the perfect diary, for example, its sales expenses in 20 19 years accounted for only 20.3%.
The cost of offline traffic is actually lower than online traffic-this is the conclusion of the founder of Noisy Beauty, Mai. His cosmetics collection store includes cosmetic brands dominated by national trends and skin care brands dominated by Europe, America and Japan. "We have calculated that the online loss of the brand is very large, and the traffic cost accounts for 40%-50% or even higher of the sales, while offline naturally likes to help the brand maintain its own price system, and I don't want you to reduce the price, because offline pays attention to efficiency and pays great attention to the customer unit price."
In a larger sense, offline has been given the ambition to walk out of Tmall with a perfect diary. It decided to leave like countless Taobao brands, not willing to be the first in Tmall beauty. So, can offline help the perfect diary usher in the second spring?
How difficult is it to break through offline?
"If Taobao brand wants to get ahead, offline is relatively reliable, but this road is not easy for a single brand." Investor Xiao Yun thinks so.
He believes that the perfect diary has two shortcomings: first, the brand loyalty of makeup users is not high, and the main picture looks good, instead of paying attention to ingredients and dependence like skin care products; Second, there are few SKUs in a single brand, and the two-phase effect will lead to no comparison among users in the store, which will affect the sales in a single store and make the investment uneconomical.
Figure/vision china
Qian Kun, a partner of Wuyue Capital, believes that many single brands in the retail industry can't open stores independently, especially those with pre-packaged products. Xiaoyun further analyzed and said, "What you can play is either ready-made and sold, and there are services to experience, such as tea, Starbucks and other catering; Either clothing, shoes and hats and other categories with higher customer price, but makeup accounts for a small proportion in retail plates, especially single brands, so it is not easy to open a store independently. "
Most international brands are mainly counters, supplemented by single-brand stores. For example, L 'Oré al Paris, a subsidiary of L 'Oré al Group, left the department store counter on 20 17 and opened three single-brand stores in China. Even as an offline channel for counters and single-brand stores, the pace is very cautious. For example, after Lancome, a subsidiary of L 'Oré al, entered China for 2 1 year, there were only 272 terminal channels; Estee Lauder Group, which pays attention to channels, has only nearly 1,000 stores and counters since it entered China for 27 years, which is equivalent to opening more than 30 stores every year.
"Large-scale offline store opening is essentially not what the brand wants, but what the capital wants, just for encouragement." In Bai's view, retail is a system that needs time and operation to enhance its competitiveness. Only relying on the rapid expansion of capital, there are almost no successful cases. He is not even optimistic about the offline transformation of online brands by opening stores separately.
"The reason lies in different genes, different channel management strategies and profit distribution models, and there will be contradictions in price control." Bai added, "The operating cost and difficulty of offline is much higher than that of online, and the essence is to B business, while online is good at to C business, and it is more difficult to go from toC to TO B." Bai made an even pessimistic conclusion-it is almost impossible for online brands to go offline if they use traditional business methods.
Sue also thinks it's more about burning money. "Offline physical stores are the best way to build a brand, but whether you can help Perfect Diary find the second growth curve, frankly speaking, I am not very optimistic, because users have to compare (products), but perfect products are no different."
Wheat is optimistic about the adjustment of the perfect diary. "Omni-channel is the standard gameplay of the brand. Tmall is the amount of play and the speed of play, but the brand is still offline. Perfect team strength, growth speed and financing strength can support offline layout. "
However, Maizi also admits that brands with annual sales of over 100 million yuan can afford offline stores, but they may not operate well. "If you don't open 30, 50 or even 100 stores, you can't cover the cost at all."
Wheat has been ordered. Taking a 200-square-meter shop as an example, we spend 6.5438+0.00 million yuan on decoration, 6.5438+0.5 million yuan on deposit, 67 million yuan on stocking, 20,000-20,000 yuan on monthly rent and 6.5438+0.00 million yuan on start-up funds. He runs a noisy beauty collection shop with an average area of 80- 150 square meters. It takes millions to start, and it will be back in six months.
Perfect Diary Store only sells its own products, and the largest Chengdu store has 1000 square meters. The person in charge of Perfect Diary told AI Finance & Economics that its standard store is around 100 square meters, and it will choose a business body that young users love to visit. At present, it is mainly a shopping center.
In addition to the high cost of opening a store, offline management is not difficult. "How to keep working efficiently every day in a loose state is the biggest challenge." Mai himself even learned from the military theory when he was a soldier and adopted the "iron triangle" management mode: the political commissar was responsible for unifying thoughts, the chief of staff made suggestions, and the commander of the military region unified management and coordination, ensuring that special personnel were dedicated to it, and decomposing complex execution into standardized modules.
In the skinny reality, many emerging domestic cosmetics choose to enter makeup collection stores instead of opening their own stores. The perfect diary has money and naturally has the ability to open a shop, but the management and efficiency after opening a shop are still a big question mark.
Where is the moat of domestic makeup?
Since offline is hard to be a chip for the perfect diary to flop again, is there any other way out? This seems to be the same doubt of domestic makeup brands-where is the real moat of domestic makeup represented by perfect diary, which is out of the aura of marketing success?
Figure/vision china
The perfect diary was born on 20 17, when domestic make-up was popular. Qian Kun found that short videos broke out in Xiaohongshu, Aauto Quicker and Tik Tok in the following years, which greatly lowered the threshold of makeup teaching; Short video users are mostly young people such as students, and domestic products are cheaper, directly raising the makeup crowd from 25-40 years old to 15-40 years old, so the whole plate of 20 18 is twice as fast as that of 20 17.
Chen Jianyi still remembers the rising trend when he started his business: the Sadr incident affected the trade between China and South Korea, and the Korean cosmetics business was blocked, giving domestic products opportunities. His marble eye shadow was launched in August, 20 17, and GMV exceeded 60 million yuan four months later. 20 18, six SKUs got nearly 300 million yuan GMV.
This is unimaginable in domestic makeup in the past. Bai, who has studied the cosmetics industry for many years, told ai Finance and Economics that there are three stages in the development of local cosmetics brands in China: 1995-20 15, focusing on the low-end channels of cosmetics stores in third-and fourth-tier cities, and using channel marketing to drive high retail prices, such as brands such as Polaiya, Kazilan and Nature Hall.
The period from 2065438 to 2005 is the second stage. The mobile Internet has broken the information asymmetry, users' purchase has become rational, the advantages of traditional channels have been weakened, and brands have begun to break through online, paying more attention to quality and cost performance.
Nowadays, domestic make-up has encountered a new bottleneck, and Baiyun Tiger has pointed its direction to the third stage, that is, the future stage. "China brand to long-term, need two breakthroughs. The first is product quality, increasing scientific research investment and original formula innovation, and the second is to build brand awareness. " He added that many local brands in China couldn't survive in the first life cycle (12-20 years) because they didn't pay attention to brand and quality, but put the cart before the horse and paid attention to channel marketing and unreasonable cost performance.
Bai pointed out that international brands generally spend 3%-5% of their income on scientific research, and domestic brands with a relatively high proportion, such as Polaiya, also have about 2%, but the income base is different and there is a big gap. For example, L 'Oré al's R&D investment in 20 19 is as high as 985 million euros, and there are nearly 4,000 R&D personnel in 20 R&D centers around the world, with an average of nearly 500 patents applied each year.
Perfect diary is also working hard. In March this year, it announced a joint venture with the OEM company Cosme Shi Mei, investing 700 million yuan to establish a research and development and production base. It is expected to be put into production in 2022, and the future output value will reach 2 billion yuan. Cosmes is one of the best foundries in the world, and has cooperated with Dior, L 'Oreal and Chanel.
Bai Huyun thinks that Cosme's scientific research is competitive, and the investment in product formula is also quite large, but it is not necessarily top-notch. It is also in line with the development demands of this stage to make such a choice at present.
"You look good today," Gigi, chief formulator of App, revealed that OEM R&D pays more attention to market trends, and the innovation speed is faster, while brand R&D pays attention to brand tonality. Xiao K, the formulator, added that the formulator of the foundry is tired of dealing with customer needs and product imitation every day, and it is difficult to sink down and polish the best formula products like the formulator of the brand.
Gigi and K worked in L 'Oreal and Johnson & Johnson respectively. They revealed that the product development cycle of large companies is often as long as two or three years, one of the reasons is that the testing is relatively perfect. Xiao K told AI Finance and Economics that the R&D center of multinational companies is generally divided into two parts: pure formula development and front-end (basic) research. The former studies the regional formula according to the consumption preference of the regional market, and these products often need to undergo several months of stability test, microbial test, irritation test and efficacy evaluation, while the latter focuses on the cutting-edge technologies that may break out after 5- 10 years.
In the field of cosmetics, skin care products pay attention to ingredients, have stronger efficacy and high research and development requirements. But whether R&D is also a moat of make-up has been controversial in the industry.
Qian Kun revealed that one of the core reasons why he didn't invest in cosmetics brands was that there was no essential difference in product level. He believes that when the product differentiation is not strong and there are many brand choices, the channel value will be highlighted. According to this logic, his organization has invested in a palette in a makeup collection shop.
Gigi believes that in the field of makeup, in addition to foundation products such as liquid foundation, research and development requirements are high, and the requirements for eye shadow, blush and lipstick are not high, and more are trend-oriented. "The focus of makeup is to keep up with the trend. Generally, the product stability of large companies is no problem. They prefer to detonate hot spots. To put it bluntly, the core is marketing. " Little K added.
In the process, consumers are also more susceptible to marketing. At the same time, the new demands of consumers will eventually be fed back to the R&D terminal, and then the latter will design products that meet the new demands of consumers, such as letting formulators choose raw materials that consumers prefer, which is one of the reasons why many "component party" consumers appear in the market.
This means that in addition to the perfect diary online store, the follow-up research and development is also difficult.
Of course, the perfect diary has not stopped tossing, and the multi-brand strategy extending from makeup to skin care has become another way out. 20 19 Perfect Diary has launched a variety of skin care products. In March of this year, the brand-new brand "Wan Zi Xin Xuan" settled in Tmall, covering skin care, make-up, beauty equipment, personal care, accessories, cosmetic contact lenses and other categories. In April, there were rumors that it acquired the nail polish brand "Little Odin".
Baiyun Lake is not optimistic about this extension. "The success of local brands is basically about making products. When a certain category is well done, but the brand has not been infiltrated, it will extend to other categories, and consumers may not recognize it. "
Tmall stores show that in addition to the mask endorsed by Yibo, the monthly sales of other products are concentrated in one or two hundred. In the Perfect Diary Store, there are 30 models with monthly sales exceeding 10,000.
Undeniably, as a domestic make-up brand, Perfect Diary opened a precedent for social marketing to win, and killed a bloody road for domestic make-up. However, after the outbreak of popularity and the bottleneck of growth, whether it is offline channels, factory research and development, or multi-brand strategy, finding the second spring has become a new problem.
After the capital boost, how to keep the initial heart of the brand and get out of the curse of the life cycle of local brands in China is also the answer of time to the perfect diary.
(At the request of the interviewee, Su and Xiao Yun are pseudonyms)