The scale of China’s beauty market continues to enlarge. Under the torrent, consumption is driving the transformation of beauty retail industry.
According to the data released by the National Bureau of Statistics, in the first half of 2023, the total retail sales of social consumer goods was 22,758.8 billion yuan, up 8.2% year-on-year, of which the retail sales of cosmetics products was 207.1 billion yuan, up 8.6% year-on-year. In the first half of this year, the total retail sales of cosmetics exceeded 200 billion yuan for the first time, the highest level in history.
"The beauty market has shown a strong resilience, and there is still a lot of room for growth in the market, which may break the 400 billion mark this year. However, from a competitive point of view, the beauty competition is increasingly entering the deep water area. Full scene and digitalization have become the key words in recent years. Some enterprises rushed out, but some enterprises obviously lacked stamina. " Insiders said.
The beauty market is still in the growth stage. Of course, the digital evolution in the beauty field is also very prominent, and online and offline digitalization is a mainstream. We have seen that the digital evolution of beauty has entered a new era of "following the needs of customers".
Let me talk about it firstL’Oreal.
According to the data released by L ‘Oré al China, its overall performance increased by 5.5% against the trend in 2022, exceeding the market average by 11 percentage points, and it will continue to lead the market in the first quarter of 2023.
"In particular, we actively embraced China’s leading digital ecology and achieved double-digit growth in e-commerce channels." Fabry, President of L ‘Oré al North Asia and CEO of China, said that the use, acceptance and professional ability of digital tools in China are far higher than those in other parts of the world.
In fact, L ‘Oré al started digital construction very early. In 2017, L ‘Oré al began to build a beauty data lake. L ‘Oré al China stepped up the development of online channels in 2020, connecting with consumers through a brand-new social e-commerce model, so that they can feel all kinds of online and offline services.
At the same time, L ‘Oré al began to lay out the future AI artificial intelligence engine, from "digitalization" to "digital intelligence".
In recent years, we have also seen its achievements. For example, the latest Lancome smart hand-held high-precision makeup equipment HAPTA is designed to meet the beauty needs of people with dyskinesia; Detection and guidance tools, such as la roche-posay’s skin detection application SPOTSCAN, Armani Beauty’s skin detection equipment Metaprofiler and Karshi’s scalp and hair analysis equipment K-Scan; Personalized beauty technology solutions, such as Shu Uemura’s exclusive eyebrow makeup to achieve professional eyebrow makeup at home, COLORSONIC, a home dyeing magic wand for L ‘Oré al Paris to solve the problem of hair dyeing at home, and Maybelline’s virtual beauty application; And sustainable beauty technology solutions, such as L ‘Oré al Pro’s water-saving hair care artifact WATER SAVER, which has saved more than 42 million liters of water so far.
Today, L ‘Oré al China has entered the second stage of digital transformation-bringing better experience to consumers and multidimensional insight to business with data. From online and offline (O+O), upgrade to a new consumption scene that integrates online, offline and chain (O+O, online+offline+on-chain).
For example, in terms of consumer insight, L ‘Oré al is collecting a large amount of consumer data from the bottom up and opening up online and offline data islands, making big data analysis an essential ability for consumer insight. The discussion of beauty preferences and the evaluation of products can use big data and AI capabilities to provide brands, products, services and experiences that they are interested in.
With the development of the industry, the competition of beauty track is becoming more and more fierce, and the rising of domestic beauty brands is the obvious trend of current market development.
The digitalization of domestic brands is also radical, and we takeshanghai jahwa corporationFor example.
Shanghai jahwa, as the head enterprise of domestic beauty industry, owns many well-known brands, such as Six Gods, Meijiajing and Gough. In terms of digital transformation, a series of efforts have been made. Of course, the result of digital transformation is also reflected in good performance.
In fact, Pan Qiusheng, the helm of shanghai jahwa, put forward the "123 Management Policy" with consumers as the center, channel advancement and brand innovation as the basic point, and culture, system and digitalization as the boosters.
Behind digitalization, the production of beauty companies will be driven by data. Big data and artificial intelligence will significantly improve the decision-making level and productivity of enterprises, and enterprises will operate the market to serve consumers with brand-new logic.
We have observed that shanghai jahwa’s digital transformation has opened up online and offline through digital empowerment. So far, more than hundreds of "cloud stores" have been established in shanghai jahwa, and the sales efficiency of "cloud stores" has been greatly improved. Next, shanghai jahwa returned home to build more "online cloud stores" and create its own digital industrial chain.
For different stages of consumer demand insight, it builds a development methodology of track identification, concept optimization, formula optimization and system optimization with data empowerment, and undergoes big data analysis, consumer research and test feedback at each key node. For example, shanghai jahwa has signed an in-depth cooperation contract with Tmall New Product Innovation Center (TMIC), which can promote R&D and product innovation with TMIC’s comprehensive consumer big data and industry insight.
Moreover, in artificial intelligence, shanghai jahwa is also ahead. It is understood that shanghai jahwa has created an AI skin detection program based on tens of millions of face data. Through the skin measurement of key points of face, combined with the background AI big data calculation and analysis, an analysis model of skin state of Chinese people in all dimensions is established, which is more suitable for customized detection and analysis of China people.
By building a data system around consumers, promoting product innovation based on consumer demand and creating new channels in combination with consumer changes, shanghai jahwa’s digital infrastructure can be said to be very stable.
Look at the channel brand of beauty cosmetics again.beautiful.
It is understood that in the past year, AFIONA Yanli opened 56 new stores, and the number of main stores exceeded 200. Stores have newly entered 12 cities, at the same time, 60 stores have been renewed, and their profitability has also been greatly improved.
Wu Tao, CEO of Yanli Group, said at the Supplier Summit in 2023 that AFIONA Yanli will continue to promote digital construction, and carry out digital cultivation from the dimensions of enterprise planning management, commodity efficiency management, digital fine operation of stores and precise marketing of members. At the same time, we will build a high-standard digital team dedicated to AFIONA Yanli.
In the past, it was the most difficult thing for cosmetics enterprises to make decisions by looking at the data, and then improve the efficiency of product turnover, and the online digital system made the data timely and effective. At present, Yanli Group can calculate all the complete business data indicators every 12 minutes, including about 300 business indicators, such as gross profit margin, commodity turnover, membership change and repurchase rate of new and old members.
From the marketing side. In the marketing department, front-line employees can accurately group members and reach them in various ways through CDP and other users’ operation of digital tools, and quickly recover the effect so as to optimize and adjust the marketing strategy. Among them, the digital tool divides Yanli users into 500+ users, and there are about 451 crowd tags. By tagging, the products are combined and matched, so as to find out the functional products that match the users, and make accurate portraits of users in the process of mutual integration. At the same time, at present, the one-to-one information push in the circle of friends and small programs relies on background marketing and big data systems to analyze and predict the crowd-based and accurate portraits.
For the beauty industry, the bigger difficulty is how to make digital decisions.
It is reported that the global operating data of Yanli Group can be provided not only to senior decision makers, but also to front-line employees such as regions, communities and store managers. This is because when making decisions, not only the top management, but also the front-line business colleagues need to know the actual situation of store business data in real time, including inventory sales, inventory structure, best-selling products and unsalable products. It is helpful for front-line business colleagues to master more specific data information and help decision-makers to obtain more detailed data reference in strategic choice.
According to the Retail Business Review, both the brand side and the channel side of the beauty industry put digitalization at the top of their strategic position. Digital transformation is the first-hand project, and at the same time it should penetrate into all links of the front, middle and back end. So it must be a long-term investment.
The domestic middle class continues to grow, and more and more consumers in China begin to change from practical consumption to enjoyment consumption. The 2023 McKinsey China Consumer Report: Resilience Times pointed out that the middle class will continue to grow, and by 2025, 71 million families will enter this higher income range, which shows the great potential of China’s consumer market.
At the same time, according to the forward-looking forecast, the scale of China’s cosmetics market will reach 937.4 billion yuan by 2028, and the average annual growth rate will reach 7.11% from 2023 to 2028. In the next five years, China’s cosmetics market, especially the mid-to high-end market, will continue to maintain its leading position in the global cosmetics industry.
China’s consumption upgrade is opening a "new golden age" of beauty cosmetics.
So for brands and retailers, how to compete in the market in the "new golden age" of beauty? We believe that we need to think from the "digital evolution" of the consumption environment.
First, consumer changes.Consumers are not only in the physical environment, but also in the virtual environment. They are the mainstream in the field of social discourse.
Second, the online and offline scenes are accelerated.Behind this is the integration of online and offline traffic, data, marketing, organization and supply chain.
For example, digital selection, especially for new product development. Now using big data and algorithm tools, we can get the demand of consumer market in time, and gain insight into the market sales of other competing products through data, and also create explosive products for consumer hobbies, so that the probability of success of new products will be greatly improved.
Thirdly, digitalization has become the key to get through the second pulse of "people and goods yard".The relationship between people and goods yard has been completely reconstructed, and the digitalization of people will be the most important. The front-end stores are digitized, covering the whole process of users’ shopping. It is also a prerequisite for the full realization of C2B in the future.
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