Analysis on the Reasons for the Rapid Rise of China’s Newly-Emerged Cosmetic Brands

China Information Center of Daily Chemical Industry,China

China’s leading cosmetic brands,such as CHANDO,Proya,Marubi,Herborist,etc.,have mostly been established in the first decade of the 21st century and in development since then.These brands take nearly 20 years to arrive at their current revenue scale.However,the author noticed that in recent years some new prominent brands have successively emerged in China’s domestic cosmetics industry,for example,HFP,Perfect Diary,Florasis,Judydoll,ZEESEA,MEIKING,etc.,whose revenue scales have caught up with the aforementioned leading brands in merely 3 to 4 years.Perfect Dairy,in particular,which is about to go public in the United States,is expected to obtain a revenue of over 4 billion yuan in 2020,just 4 years since its establishment.Such revenue scale is surprising in that it reaches its current amount within such a brief time.Rapid rising and large revenue scales have become the two major labels of these newly-emerged domestic brands.It seems that the new generation of cosmetic brands only take 3 to 4 years to achieve what their predecessors achieved in 10 to 20 years’time.What are the reasons behind this phenomenon?The author believes that the main reasons for the rapid rise of newly-emerged brands are the changes in people,market and industrial chains.

On December 27,2019 CEC Capital issued a research paper on China’s consumer industry,stating that the speedy rise of brands in China’s consumer market results from two underlying changes.The first change comes from people,or to be exact,consumers.The change in people is mainly reflected in two aspects; one is the change of shopping habits among the main purchasers of cosmetics,and the other is the change of consumers’ own consumption preferences.The second change stems from transforms of the market.Firstly,the online shopping population in China continues to expand.Sales of cosmetics through online platforms has accounted for more than one third,making it the largest channel for sales of cosmetics in China.Secondly,China’s delivery network and supply chain designed to service online shopping have greatly improved their efficiency.Thirdly,the rise of social network marketing,community marketing,short videos,and online influencers’ livestreaming,has completely changed the modes of brand promotion and marketing.

First,let’s look at the changes in people.According to statistical analysis,it can be concluded that the main consumer groups in China’s cosmetics market are mainly people born in the 1980s and 1990s.In 2019,people of these two generations account for 63% of the whole population in China,and this group of people is also the main force of online shoppers in China.In addition,the proportion of cosmetics consumption by people of the post-00’s generation,i.e.the Generation Z,is increasing every year,and this group of Generation Z people are the generation who grew up surrounded by the Internet.Elements like self-expression,empathy,novelty,and the faith that “appearance is power,” are typical labels of the Generation Z consumers.Therefore,it is not surprising that most of the aforementioned newly-emerged brands in recent years are popular online brands.

A general observation at this new generation consumers of the post ’90s and ’00s indicates that firstly they pay more attention to appearance.A practical product is not enough for them,since they have higher aesthetical criteria for the appearance and design of the product,and they care more about the sense of quality.

Secondly,they are willing to pay for their sentiments.If a product can cause emotional resonance and mental satisfaction,they tend to buy it without hesitation.For example,more and more people are now willing to support national brands in China.

Finally,they tend to spend money because of the“personality” of the brand.They will choose a brand if it can convey the values and lifestyles that are acknowledged by them.

Correspondingly,newly-emerged make-up brands like Perfect Diary and Florasis win the market by their appearance.Various collaborative designs and Chinese national styles attract consumers through the power of appearance.The new generation of consumers like expressing themselves; once they fall in love with a certain product that is attractive in appearance,they will share pictures or videos of it through WeChat Moments or various short video platforms,which automatically provides the brands with a lot of exposure and promotion opportunities.

Another method is to arouse the emotional resonance of consumers by telling a unique brand story,coupled with various forms of content marketing,short videos and different interactive activities to communicate with consumers and obtain their empathy.Most of the newly-emerged categories of products learn from Xiaomi’s fan marketing method,that is,letting fans participate in product invention,conducting various tests among fans before the product is finalized,and then improving and optimizing products based on the opinions of fans.This approach makes it easy to create hit products that are highly sought after by consumers,especially fans.In addition,based on the development of patriotism in recent years,these new brands discern and effectively follow the trend of “the rise of new national brands.” For example,Perfect Diary and Florasis avoid employing Japanese and Korean elements like traditional make-up brands do.Instead,they thoroughly display their Chinese genes,making it much easier to capture the hearts of consumers.Florasis,in particular,relies on traditional Chinese style and Chinese fashion style to win the market,and have harvested huge profits in the rise of “new national brands.”

After attracting consumers to each brand’s own official account,these new brands will do everything possible to carry out more in-depth content marketing,so that the new generation of consumers will think these brands are tailor-made for them,and that this is the very product of their generation.Once the brands transforms consumers into their fans,it is a natural outcome that they will be enthusiastically sought after by consumers.

Then let’s take a look at the changes in market.Today’s society is witnessing an era of self-media.Based on the logic that mobile phones are self-media and that everyone can be self-media,the interaction path between brands and consumers has been greatly shortened.The emergence of social media and smart algorithms has distracted people.Therefore,in this era,the decision making process of consumers are no longer dominated by brands,but instead shows a tendency towards diversification.For example,in Tmall,what makes the decision for consumers is in essence the algorithms of Alibaba.In the ecology of online influencer livestreaming,the influencers themselves can affect the shopping decision of consumers.In the new marketing era where every person can be their own media,these newly-emerged brands in general do not advertise on traditional media,but choose to promote their products through new channels such as online influencers in Bilibili,Weibo,RED,WeChat,and short video platforms like TikTok and Kuaishou.The advantage is that these new channels greatly shorten the path that connects brands with the target consumers.Once a product is recommended by online influencers,consumers will buy it immediately,write down their experience after using it,and recommend it to more people,so that the closed-loop consumption can be completed faster.Therefore,this fast-speed promotion,different from traditional communication,has greatly accelerated the rise of newly-emerged brands.

In recent years the rise of influencer livestreaming has radically changed the modes of brand promotion and marketing.A noticeable instance is a top cosmetics influencer Li Jiaqi,nicknamed “Lipstick King”,who cooperates with newly-emerged domestic brands in the development of his career.Both Perfect Diary and Florasis has accelerated the success of their brands by establishing deeply-connected cooperation with Li.The reason why top livestreaming influencers like him can greatly assist the success of newlyemerged brands lies in their genuineness,that is,unlike the distant superstars,they are ordinary people who speaks from the bottom of their heart when they share the using experience of a product with the audience.For example,the Taobao live-streamer Wei Ya has tried every product for herself before she recommends them to the audience.One of the crucial reasons for Li Jiaqi’s popularity is that he tries on the lipstick products for himself.He once created a record of trying on hundreds of lipsticks within one livestreaming show.

On short video platforms like TikTok and Kuaishou,many bloggers make use of the so-called“old friend economy,” which means they position themselves as an old friend of the consumers.When users of TikTok and Kuaishou follows a blogger,the most common automatic response they receive is“Now that you follows me,you are a family member.”Such “old friend” marketing method easily gains the trust of consumers.The result of this method is that consumers have gradually formed a people-driven mentality; they become dependent on the bloggers’recommendation in purchasing products.As long as it is recommended by the bloggers,the sales of unknown brands may exceed the sales of big brands.The influence of brands on consumer decision-making is gradually being weakened,while the personal influence of livestreaming influencers is increasing.

Moreover,in recent years the major e-commerce platforms in China have all invested large amount of funds into improving the efficiency and speed of delivery network,to bridge the gap of “the last kilometer,” so as to bring online shopping to innumerable households.Consumers in first- and second-tier cities can receive their products within 24 to 48 hours after they place an order online.Such speedy shopping experience has largely driven the rise of newly-emerged brands.

Certainly the rapid advances of product research and development and production ability in China’s domestic cosmetics industry in recent years has also provided strong supply-chain support for the rise of new brands and powerful guarantee for the core competence these newly-emerged brands attempt to forge,that is,superhigh performance-price ratio.

Behind the rapid rise of these newly-emerged brands is another factor that cannot be ignored,the participation of capital.China has a huge makeup market,and its growth rate has remained twice the rate of skin-care market.China is expected to become world’s No.1 make-up market in the future,therefore attracting a lot of capital to this battlefield.Thanks to the assistance of capital,the whole chain of resources of the new newly-emerged brands has been optimized,so that these brands can invest more resources to enable and accelerate the processes of upgrading products,creating hit products,marketing products,and constructing channels.

To conclude,based on changes in people and market,the empowerment of capital,improvement of delivery speed,and the overall progress of the cosmetic product chain in China,the newly-emerged brands that are good at snatching opportunities have achieved the so-called “overtaking in the corner.”With the help of the above-mentioned factors concerning time,location,and people,China will produce more and more new rising cosmetic brands and usher in a period of prosperous development,and more unicorn enterprises or even leading national cosmetic brands are likely to develop from these newly-emerged brands.