Insight into the development trend of beauty industry in 2020

Under the general trend of economic downturn, the scale of the beauty industry has remained stable, and online e-commerce, especially social e-commerce channels, has developed rapidly. From the perspective of sub-population, the consumption potential of beauty in Z generation, male and sinking market is huge.

Directory:

  • General situation of beauty industry;
  • Consumption trend of beauty cosmetics crowd;
  • Beauty marketing model and case analysis;
  • Have a good insight into beauty data;
  • Thoughts and suggestions on beauty industry.

In 2019, the retail sales of cosmetics industry in China (above designated size) reached 299.2 billion yuan, with an annual cumulative growth rate of 12.6%.

From 2012 to 2019, the cosmetic market in China showed a steady growth trend, with an annual compound growth rate of 8.0%. In 2019, the cosmetic market in China is expected to reach 425.6 billion yuan.

In 2019, the proportion of skin care products was 53.5%, and the category of cosmetics was slightly higher than that in 2018, accounting for 9.9%.

In 2019, influenced by online shopping and social new retail, the online channels of niche makeup brands rose rapidly. Online, big-name makeup accounts for 34%, and minority makeup accounts for 66%; Online, big-name makeup accounts for 49%, and minority makeup accounts for 51%.

E-commerce channels have risen rapidly, accounting for 27.4% in 2018, surpassing KA (supermarkets) and department stores to become the largest sales channel for cosmetics.

Take Polaiya, a domestic beauty head enterprise, as an example. In recent years, online e-commerce channels have achieved rapid growth, and the proportion of 2019H1 has increased to 46%.

In terms of sub-channels, offline specialty stores (CS stores) and online e-commerce are the main business channels of Polaiya.

With the development of social e-commerce, KOL’s influence has increased, and online celebrity brands such as Perfect Diary and Meimo Elmer have become popular through social planting and word-of-mouth communication.

In 2018, the brand share of cosmetics CR10 in China was 20.0%. Compared with 2012, in 2018, the number and share of domestic brands in T-10 brand have increased. Take skin care products as an example: in 2018, the top 2 skin care brands accounted for 44.6%, including 9 local brands, with a market share of 20.6%.

From 2012 to 2018, the total market share of domestic cosmetic companies ranked among the top 20 increased from 7.6% to 14.1%, with an obvious rising trend.

In 2019, the turnover of 589 domestic beauty brands in Tmall 618 exceeded 100% year-on-year, and the turnover of 183 domestic beauty brands exceeded 1000% year-on-year. Among them, the turnover rate of new brands such as Hollis, Huaxizi, Bingxili and dreamtimes. Perfect Diary reached more than 10 times.

In the beauty crowd, generation Z has the fastest consumption speed, and is more willing to spend on beauty. In 2018, the annual expenditure per capita on beauty products was 1,713 yuan, higher than other age groups.

Compared with the post-90 s, the post-95 s prefer cosmetics, and the consumption of cosmetics accounts for 35%; After 90, it is more focused on skin care products, and skin care consumption accounts for 50%.

  • From 2016 to 2019, the average annual growth rate of men’s cosmetics retail in China reached 13.5%. In 2019, the scale of men’s cosmetics market in China reached 19 billion yuan, accounting for 4.5% of the market share of cosmetics in China.
  • In 2018, the consumption rate of Tmall male beauty cosmetics was faster, and the rate of male-only brands exceeded 50% for two consecutive years. The fastest growth rate was men’s emulsion cream and men’s makeup.
  • Basic cleansing and facial cream are the main skin care products consumed by men, and they remain stable. Men’s make-up is a long category, with a year-on-year growth rate of 89% in 2018.

  • In recent years, the trend of high-end cosmetics in China has risen, and the growth rate of high-end cosmetics is obviously faster than that of mass cosmetics.
  • Driven by the upgrading of consumption and brand awareness, the post-1995 generation has become a potential group of high-end beauty consumption. From March 2018 to March 2019, Tmall had more than 50 million post-90s cosmetics, and luxury beauty products such as MAC, Estee Lauder, YSL, Givenchy and Hailan Mystery became the favorite high-end brands for post-90s.

In 2019, the online consumer groups of cosmetics in China are growing day by day. The main groups of online consumers come from second-tier cities, and the number of cities in the fourth-tier and below has expanded significantly.

In 2019, Tmall 618 data showed that nearly half of the orders for more than 100 million items came from third-to sixth-tier cities. Two days before 618, the sales of Jugoshen beauty products from cities below the third tier increased by 143% year-on-year. In 2019, the online consumption speed of young people’s beauty care in small towns reached 38%, far exceeding the speed of 16% in online cities.

In 2018, the number of brands of skin care products and make-up products increased by more than 20% compared with 2016.

Consumers spend more and more money on beauty products, and the frequency of purchasing cosmetics and the number of brands continue to rise every year.

Consumers began to pay attention to the ingredients and efficacy behind the products, and the brand targeted the development of ingredient products and marketing promotion, which caused widespread discussion in social media.

The number of products named after the whitening ingredient "nicotinamide" grew the fastest, with an increase of 752.63% in 2018 compared with 2017.

The traffic entrance of cosmetics marketing in China has been switched from CCTV-TV-Taobao-social platform in turn. The rise of social platforms has made marketing from centralized content production to "crowdsourcing creativity", and brands have achieved a new round of growth through cross-platform, cross-circle and cross-border marketing layout.

More and more consumers get information about beauty products through social media to make better content planting and shopping decisions.

Platforms such as short video/live broadcast not only provide a more direct interactive form for beauty KOL, but also provide consumers with a convenient experience of watching and buying.

More and more beauty brands put on WeChat social advertisements. In 2016-2017, the average frequency of putting on friends circle advertisements in the beauty industry increased by 81%. At the same time, more than 61% of beauty brands will continue to put on WeChat WeChat official account advertisements throughout the year to maintain brand exposure.

Personal beauty care is the most KOL category in Tik Tok/Aauto Quicker platform. KOL marketing game of short beauty video mainly includes planting grass to bring goods, buying while watching, and offline experience, which brings different experiences to fans, such as early adopters, makeup artist, and evaluating the drying list.

  • Perfect Diary creates explosions through high-density innovative social marketing, and sales have exploded since 2019.
  • The marketing channel of Perfect Diary is mainly Xiaohongshu, and the marketing strategy is to focus on small and medium-sized KOL, and focus on promoting 1-2 products in each period to create explosive products.

With short vibrato videos as the breakthrough point, Polaiya cooperated with a large number of KOL to spread and bring goods, and at the same time, combined with the promotion on content platforms such as Xiaohongshu and Weibo, the volume of products was rapidly enlarged. In July 2019, the sales volume of Polaiya’s "bubble mask" ranked first among Tmall mask products in July.

In the Tik Tok account cooperated by Polaiya, the best communication effect is to shake a good thing, and male KOL’s exaggerated video commentary has more visual impact and communication.

Half an acre of flower fields has been put into cooperation with a large number of talents and MCN institutions, and brand-related topics on the vibrato platform have received hundreds of millions of broadcasts.

The content is mainly about product evaluation, celebrities with the same style and talented people planting grass, which quickly gained a large number of young users in Weibo and Xiaohongshu.

Cross-border co-branding is the preferred marketing method of beauty brands. Guochao Cosmetics captures consumers’ hearts by creating high-value products with artistic and cultural connotations through co-branding.

Pan-IP co-branding directly broadens the brand’s consumer groups, and creative cross-border collision can trigger extensive discussion and dissemination in social media, further strengthen consumers’ awareness of brands and products, and increase product sales.

The store has added professional intelligent equipment to provide consumers with beauty services such as skin testing, facial/hand care, eyebrow trimming and makeup trial.

Service and experience are the core competitiveness of offline stores. The upgrading of experience space and service items attracts consumers to try in depth in the store, prolongs the consumption experience time and enhances the user experience and stickiness.

Shopping guide is the key contact point for enterprises to connect with consumers. BA has professional knowledge and rich sales experience, and its personal charm brings its own online celebrity temperament to transform customers.

Merrill Lynch Beauty, a chain brand of cosmetics collection, launched a live shopping guide by using the live broadcast. In two months, the live broadcast room rose by over 90,000 yuan, and the monthly sales increased by nearly 20%. The related orders generated by the live broadcast orders were nearly dry.

The COVID-19 epidemic at the end of 2019 disrupted the production order and sales rhythm of China’s beauty industry, and both physical retail and online retail were greatly impacted.

Under the epidemic situation, live broadcast and private domain traffic have become "quick-acting rescue pills" and online opening tools for many enterprises, such as Afu Essential Oil Single Brand Store and Yintai Department Store Group.

After tasting the "sweetness", Hu B Jinmeng cosmetics chain and other enterprises regard it as their new long point and the second curve to start their business.

Afu Essential Oil, a leading brand of essential oil and beauty cosmetics in China, has more than 50 counters nationwide, and only 15 stores have opened due to the epidemic.

During the epidemic, Afu essential oil mobilized more than 400 shopping guides and trainers to broadcast live at home. On Valentine’s Day, Afu essential oil sold 80,000+in one-hour live broadcast through the live broadcast tool, and the conversion rate was as high as 12%.

During the epidemic period, the special activities of Yintai’s major brands were announced and drained to Miaojie APP through BA’s circle of friends to precipitate private domain traffic. Among them, BA can get a 1% commission for sharing Miaojie goods and reaching a deal. The 24-hour "non-snoring" Miaojie APP provides online traffic for merchants to help them ease inventory pressure.

From February 7th, Yintai invited nearly famous BA to return to work at home through Taobao live broadcast and Miaojie. The sales generated by a BA live broadcast is equivalent to working in a store for a week.

Jinmeng Cosmetics Store, one of the top 100 beauty chain stores in Hubei, is mainly located in the hardest hit areas such as Hubei and Jiangxi. In a difficult situation, it readjusted its strategy, temporarily set up a live broadcast project team, and mobilized the store to broadcast live at home for 12 hours for eight days.

According to statistics, during the Valentine’s Day activities, the cumulative drainage of Jinmeng makeup live room reached 100,000 person-times, and the total sales exceeded 880,000, which reached 95% of the sales of its offline stores in just three days.

Since Q1, 2018, the sales of Zanzan Beauty Cosmetics have maintained rapid growth, which is much faster than the retail sales of cosmetics.

The number of users and the per capita purchase frequency of Zanzan Beauty Cosmetics continue to grow, which is the main driving force for the rapid growth of Zanzan Beauty Cosmetics sales.

There is an obvious sinking trend of consumers who like beauty cosmetics, and the proportion of users in third-tier and below cities has increased significantly.

Zanzan distribution platform helps beauty merchants to connect with media, small B shopkeepers and other channels, and expand sales channels through WeChat social communication, and sales continue to grow.

From the sales category of Zan distribution market, the sales of skin care account for the highest proportion, but the sales of cosmetics are fast.

Since 2019, more and more beauty businesses have sold goods through live broadcast, and there are praises for the GMV high-speed broadcast business, and the conversion rate of live broadcast transactions is higher than that of the broader market.

The proportion of cities with four-tier and below users placing orders for beauty live broadcast is significantly higher than that of beauty overall, and the Top5 provinces with the most orders are Hebei, Shandong, Guangdong, Liaoning and Henan.

Under the general trend of economic downturn, the scale of the beauty industry has remained stable, and online e-commerce, especially social e-commerce channels, has developed rapidly. From the perspective of sub-population, the consumption potential of beauty in Z generation, male and sinking market is huge.

Thanks to the diversification of consumers’ choice of beauty brands, and social media has gradually become an important channel for users to obtain information, we attach importance to the rise of domestic products and cutting-edge beauty brands operated by social channels.

With the rapid rise of traffic portals on social platforms, the KOL marketing model of social delivery, graphic/short video has emerged. More and more beauty brands make explosions and release new products through short video/live broadcast platforms.

The epidemic has significantly accelerated the online and offline integration of beauty physical stores. It is suggested that beauty shops should pay more attention to online social e-commerce channels, and use shopping guide distribution, live selling, and social channels to strengthen connections with customers, which will bring performance.

 

Author: E-commerce operation little prince, WeChat WeChat official account: E-commerce operation little prince.

This article was originally published by @ e-commerce operation little prince. Everyone is a product manager. Reprinting is prohibited without permission.

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