Beauty trend in 2023: functional skin care products will continue to stand up. How do domestic brands seize the control of C position?

Recently, the "2023 Beauty Personal Care Increase Track Report" was released to discuss the three major beauty personal care tracks with new increase. As one of the new tracks, the functional skin care track has increased from 6.9 billion yuan in 2016 to 28.3 billion yuan in 2021, showing its continuous vitality. It has made breakthroughs in breaking the monopoly of overseas brands, innovating growth opportunities, and digging deep into the moat of brands, which has brought positive signals to the overall declining cosmetics market in 2022 and expectations for the new consumption cycle.

The picture comes from the "Insight Report on the Trend of Functional Skin Care Products under the Empowerment of Science and Technology"

Breaking the monopoly of foreign domestic brands and attacking the high-end track

Functional skin care products can be roughly divided into three categories: functional skin care products, dermatological skin care products and medical dressings. Among them, the largest proportion of functional skin care products are skin care products that have been verified by experiments or clinics and have certain efficacy and safety. Dermatological skin care products are nursing products suitable for skin sensitivity and other issues, while medical dressings belong to the category of medical devices.

Looking back at the development of the domestic functional skin care products market, it is also a competition between domestic brands and overseas brands, which started from overseas brands and broke out in the breakthrough of domestic brands. In 1998, international brands such as Vichy and Yayang entered China, which opened the blue ocean market of functional skin care products in China. From 2016 to 2021, the functional skin care market increased from 6.9 billion yuan to 28.3 billion yuan.

According to the data of Toubao Research Institute, the market share of domestic functional skin care brands increased from 10.7% to 27.3% from 2014 to 2022. And since 2017, the market growth rate of functional skin care in China has always been higher than the overall market growth rate of skin care products, among which the rise of domestic brands has contributed greatly. Domestic brands are breaking the monopoly of overseas brands, and the functional skin care track shows a trend of localization.

In 2018, Huaxi Bio, which started with bioactive raw materials, announced that it would make every effort to build "functional skin care products". Under the strategic guidance of "multi-brand and multi-channel", it ran out four core brands, namely Runbaiyan, Quadi, Mibelle and BM Muscle Activity, and became the main player on the track of functional skin care products. Together with Betani, Polaiya, shanghai jahwa and other enterprises, it provoked the strength of the rise of domestic products.

Nowadays, domestic functional skin care products are no longer the "body double" of international brands, but are turning to the high-end track. In 2022, in the category of beauty and skin care of Tmall double 11, Polaiya, Winona, Quadi and Nature Hall were among the TOP20, and Runbaiyan was promoted to the Billion Club in the three major e-commerce channels of Tmall, Tik Tok and Aauto Quicker. Among them, Polaiya early C late A, Runbaiyan barrier conditioning secondary throwing, Quadi "blue throwing" essence, Winona special care essence, etc. have achieved a strong position in the high-end category track with a stronger sense of value, and consumers also realize that domestic products are advanced by strength.

According to the data of the General Administration of Customs, the cumulative import volume of beauty cosmetics and toiletries in the first 11 months of 2022 decreased by 11.2% compared with the same period of last year, which reflected consumers’ support for domestic skin care products, and domestic brands also gained consumers’ trust to a greater extent.

Heavy investment in scientific research provides sufficient kinetic energy for the development of domestic products

Because functional skin care has its own genes to enhance the efficacy of products, it emphasizes digging deep into scientific mechanism and pursuing safety and efficiency, so the research and development cycle and investment are higher than those of ordinary skin care products. At present, there is a trend of high concentration in the field of functional skin care products, and the strong are always strong. Observing the head enterprises such as Huaxi Bio, Betani and Polaiya, "technology" seems to be the main part of the involution.

The data shows that in the first three quarters of 2022, the R&D investment of Huaxi Bio, Betaine and Polaiya accounted for 6.42%, 4.37% and 2.41% respectively. The R&D expenditure of Huaxi Bio in the first three quarters reached 277 million yuan, up more than 40% year-on-year, Betaine was 126 million yuan, and Polaiya was 95 million yuan. The R&D expenditure of the three companies was in the forefront of the industry.

Heavy research and development, the scientific and technological strength of enterprises continues to consolidate. Taking Huaxi Bio as an example, following the enterprise development logic of "science → technology → product → brand", and strengthening investment in basic research and applied basic research, six R&D platforms and the world’s largest pilot transformation platform have been built to help transform scientific research achievements. Huaxi Bio-Shanghai Skin Care R&D Center has domestic leading technologies such as inspection, biology and efficacy evaluation. The first "Key Laboratory for Quality Control of Cosmetic Raw Materials" of the State Food and Drug Administration is located in Huaxi Bio. Huaxi Bio has also carried out medical research and co-creation with Shanghai Dermatology Hospital and other hospitals, participated in the compilation of expert consensus on the clinical application of hyaluronic acid in dermatology, and promoted the scientific selection and rational application of hyaluronic acid in dermatology.

Huaxi biological research and development personnel

Winona, a subsidiary of Betaine, carries out product research and development and technological innovation based on dermatology theory, with outstanding plant extraction technology. It has R&D centers in Kunming and Shanghai, Yunnan, and has a series of unique active star plant ingredients. Polaiya focuses on high-efficiency anti-oxidation and anti-wrinkle technology.

In the cutting-edge technology synthetic biology known as the "new energy" of national cosmetics, Huaxi Bio has been laid out as early as 2018. In the past two years, Shiseido and L ‘Oreal have also entered the market. At present, Huaxi Bio is the "only" synthetic bio-industrial chain enterprise in China, which integrates the three capabilities of bio-research and innovation, pilot and industrial transformation, and market transformation, and will provide strong support for the innovation of raw materials and end products. In 2022, Betani Synthetic Biology Center was established, and Polaiya participated in the B round of financing of Zhongke Xinyang, an innovative and intelligent synthetic biology enterprise. Synthetic biotechnology has made domestic brands and international brands stand at almost the same starting line, providing new opportunities for domestic brands to overtake international brands.

Innovating its own industrial chain from raw materials to end products to escort quality.

In addition to the "ballast stone" of science and technology, based on the advantages of China’s manufacturing industry, the efforts of domestic enterprises in the industrial chain provide a strong guarantee for the "efficacy and safety" of functional skin care products.

Take Huaxi Bio as an example, it has the ability to operate the whole chain from raw materials to consumer end products, and actively promotes the application of digital and intelligent systems in the total quality management system of cosmetics production. In September, 2022, Huaxi Bio won three awards, namely "National Leading Enterprise in Cosmetic Industry", "National Leading Brand in Cosmetic Industry" and "National Stable Qualified Product in Quality Inspection".

From the demand side, due to the constant changes in consumer demand, such as anti-aging, anti-wrinkle and skin repair, and the improvement of consumers’ access to information channels, the "component party", "efficacy party" and "technology party" were gradually born. Based on this, it is an important opportunity to further solve skin problems and highlight the raw materials, technology and efficacy of products.

The innovation ability of raw materials also determines the competitiveness of end products. Huaxi Bio independently developed and produced more than 100 SKUs of cosmetic grade raw materials such as hyaluronic acid, hydrocodone and ergothionine, which avoided being "stuck in the neck" by foreign countries and provided more space for product innovation. In 2022, Huaxi Bio-cosmetics had new raw materials, such as hydrolyzed zinc hyaluronate, hydrolyzed calcium hyaluronate and N- acetylceramide, which were put on record.

New hyaluronic acid raw materials of Huaxi Bio (part)

In terms of skin care technology, domestic enterprises are still constantly raising the scientific and technological level, such as Runbaiyan, which specializes in hyaluronic acid skin care. INFIHA? Yingfeizhi and hyaluronic acid technology pioneered by it have expanded the efficacy of hyaluronic acid from moisturizing in the past to anti-wrinkle and repair. More possibilities.

In addition, while building product strength, domestic products are constantly strengthening the shaping of brand strength, forming a unique brand culture and values recognized by consumers, thus establishing brand barriers. Run Baiyan, through the "Yan Value Bank Secondary Empty Pipe Recycling Plan", turned the recycled secondary empty pipe into an education fund, which helped rural aesthetic education and enriched the brand connotation of "focus on love"; Betani Public Welfare Fund implements Hope Project for young people in Yunnan Province from the fields of student assistance and biodiversity protection. Polaiya pays attention to the exploration and discussion of women’s issues, and attracts wide attention with a constructive brand attitude.

With the tightening of policy supervision, the constant standardization of production quality management of cosmetics, and the country’s goal of building a "high-end brand" in the cosmetics industry, enterprises in the functional skin care track should not only cash in their product strength with high-quality scientific research strength, but also provide consumers with positive emotional value, thus stabilizing the industry position, so as to establish a solid brand moat in the new consumption wave, enhance brand influence and competitiveness, and become the leading force of domestic products leading the world.

Article source: China Network