Beauty cosmetics bottomed out in the first quarter, and the multi-brand layout of the US shares crossed the cycle

On April 26th, Shangmei, the first share of Hong Kong stock domestic beauty products, released its 2022 annual report. During the reporting period, the company achieved annual revenue of 2.675 billion yuan and net profit of 147 million yuan.

It is noteworthy that in the first quarter of this year, the company’s main brand, Kanshu, achieved a breakthrough in performance-the anti-aging and explosive product Kanshu Red Waist Gift Box was launched for 111 days, and the omni-channel sales exceeded 900,000 sets, and the flagship store in Tik Tok sold over 600,000 sets. According to the new shaking data, Tik Tok’s "Kans Official Flagship Store" has become Tik Tok with a GMV of over 100 million in a single month.natural seedingAs the beauty brand with the largest sales volume, the monthly market view of the flagship store rose from the lowest of 3.22 million to the highest of 26.07 million in the past year, and the monthly GMV was estimated to have exceeded 100 million yuan from 4.3 million yuan in April last year to March this year.

Judging from the performance in the reporting period and the first quarter of this year, Shanghai and the United States have fully demonstrated their business resilience. Since last year, faced with the impact of cold market consumption, channel changes and epidemic situation, the growth rate of beauty industry has slowed down. With the low base, the country expands domestic demand and promotesSales feeWith the successive introduction of policies, the cosmetics industry has shown a strong recovery trend with its fast-moving consumer goods characteristics and rapid response. The data shows that the total retail sales of cosmetics in the first quarter of this year was 104.3 billion yuan, up 5.9% year-on-year, outperforming the broader market. Among them, the retail sales of cosmetics in March was 39.3 billion yuan, up 9.6% year-on-year. It is expected that the industry and head brands will perform better this year.

As the leader of domestic beauty products for 20 years, in the face of the ever-changing external macro environment and the transformation of the beauty industry, Shangmei Co., Ltd. has also made keen changes with its long-term multi-brand layout, independent scientific research and supply chain blessing, and decades of channel experience, and has achieved excellent results in new brand building and new channel exploration.

Long-term strategy empowers new brands to build, and newpage has a sales volume of 25 million in seven months after listing.

Looking back at 2022, the cosmetics industry has experienced a downward trend since it entered that year. According to the National Bureau of Statistics, the total retail sales of the cosmetics industry declined by 4.5% year-on-year, with a total of 393.6 billion yuan.

Against the market, how do cosmetics enterprises, especially domestic cosmetics enterprises, cross the cycle and grow together?

In this regard, we can learn a thing or two from the development of international cosmetics head: compared with enterprises whose single brand accounts for almost all the company’s performance, international head cosmetics groups such as L ‘Oreal and Shiseido have always maintained long-term and steady development. It can be seen that the long-term multi-brand layout will constantly show the growth resilience and strong anti-risk ability of an enterprise. Shangmei Co., Ltd. is one of the few successful multi-brand enterprises in China cosmetics market, and has been pursuing this strategy since its establishment.

At present, Shangmei shares have three core brands, Kans, Yiye and Red Elephant, focusing on skin care and maternal and child track. Among them, Kans focused on meeting the anti-aging needs of Asian women. In 2022, Kans released a new series of blue copper peptides and series, and the red waist series won the "TOP1 of the annual gold list of facial care suits in Tik Tok". One leaf occupies the pure beauty track, focusing on plants and nature, while the red elephant provides popular maternal and child care products.

In addition to the above-mentioned three core products, Shangmei also incubates new brands such as newpage One Page, Amir, Polar Party, Yamada Farming, etc., and reuses good brand models to continuously find the second curve and the third curve of growth.

Among them, the newpage is a brand newly listed by Shangmei last year. In 2022, the sales revenue exceeded 25 million yuan. One page of newpage is the first brand of "medical research and co-creation" in the market, focusing on positioning the baby’s skin care brand focusing on baby’s sensitive muscles, which caters to the market’s demands for high-end children’s cosmetics.

Since the launch of Tmall in 2022, newpage has only used one page of baby cream for four months, and its monthly sales have exceeded 100,000, ranking high in the hot-selling list and praise list of Tmall baby cream. In addition to the online platform, newpage has entered 4,000 stores in Watsons nationwide, over 3,000 professional maternal and child products stores in 22 provinces, and sold in the high-end month club Santa Bella. In addition, it has also entered authoritative channels such as five 3A hospitals and Cui Yutao clinics.

Grasping the new trend of channels and traffic, Kans Tik Tok broadcasted itself to the top of TOP1.

In recent years, the proportion of online channel sales of beauty products has gradually increased. In the online channel, in addition to the traditional e-commerce platform, with the entry of many international beauty brands and the continuous efforts of new and old local brands, Tik Tok, which has been upgraded to a global interest e-commerce platform, has become another traffic position of beauty online channels, and the GMV (total turnover) scale of Tik Tok e-commerce beauty industry has also reached a new high.

According to Euromonitor data, among the main sales platforms of beauty products, Tik Tok’s share has jumped to the second place, increasing to 21%, except Taobao, which still occupies the largest share of 68%. From the perspective of growth rate, the beauty products of Tik Tok platform will still maintain double-digit growth in 2022, and the development trend is good.

Tik Tok, which has been upgraded to "global interest e-commerce", focuses on the central areas such as Tik Tok Mall and Search, and its billion-level traffic drives the generation of millions or even tens of millions of beauty products, and promotes the overall sales enthusiasm of beauty products.

Shangmei, which has a sensitive perception of channels, responded quickly, and with the help of Tik Tok’s own traffic growth bonus, it took its leading brand, Kanshu, as the "vanguard", which opened the road to the rapid rise of the platform in Tik Tok.

According to Feigua’s "2022 Beauty Short Video and Live E-commerce Report", during the double 11 Promotion in 2022, all skin care TOP3 products were skin care suits. Therefore, the layout of Kans platform in Tik Tok also took the lead in taking the skin care suit as a breakthrough, and adopted the combination strategy of large single product and self-broadcasting. The new magenta waistline series was listed for 111 days, and 600,000 sets were sold in Tik Tok, with GMV exceeding 200 million. The new white waistline series sold 25,000 sets only one month after its launch. In March of this year, Tik Tok’s "official flagship store of Kans" broke through 100 million yuan in GMV in a single month, becoming the number one beauty brand in Tik Tok. In the recent Tik Tok Big Brand Week, Kans won nearly 3 million total GMV by self-broadcasting within one hour of its launch.

In addition to the Tik Tok platform, the company also invited KOL and users to share products on well-known emerging media platforms such as Xiaohongshu, participate in sales activities organized by e-commerce platforms, and use online resources to establish KOL live matrix publicity.

The cooperation between Kans and emerging media platforms is undoubtedly a successful attempt, and this successful experience is expected to be applied to other new brands hatched by the company. Through the positive feedback of these incubating brands on e-commerce marketing platforms such as Tik Tok and Xiaohongshu, and the positive recommendation of platform experts, it will continuously provide new opportunities for the company.

In the era of efficacy, scientific research highlights the quality dividend, and the R&D expense ratio accounts for 4.1%, leading the industry.

According to Jost Sullivan’s report, China has the second largest cosmetics market in the world, with a market scale of CAGR of 12.0% in 2015-2021, but at the same time, China’s per capita cosmetics expenditure in 2021 is only 670 yuan, which is still five times lower than that in Europe, America, Japan and South Korea, and there is a broad space for long-term development.

Although the domestic beauty market has a large space, China’s cosmetic technology is low, and international beauty giants almost monopolize China’s high-end cosmetics market.

With the specialization of consumers and the acceleration of internationalization of China brands, China’s beauty industry needs to have its own "China Core" and grasp the right to speak on the development of local beauty with its strength.

As a company that has been deeply involved in the beauty industry for 20 years, Shangmei knows that only by attaching importance to research and development can we continue to empower product innovation and sustainable development.

In 2022, Shangmei Co., Ltd. continued to increase its R&D efforts under the pressure of the epidemic, and its R&D investment increased from 104 million yuan in 2021 to 110 million yuan in 2022, accounting for 4.1% of the annual revenue. In 2021, the company’s R&D expense rate ranked second among domestic cosmetics listed groups.

Since the establishment of the company in 2003, the company has laid out independent research and development, with a team of more than 200 scientific research talents, two research centers in China and Japan, more than 200 patents and three basic research achievements. In 2023, Shangmei continued to make efforts in independent raw material development, basic research and polishing product quality.

At a low base, with the rapid recovery of the beauty industry in the first quarter of 2023, the beauty market will show more bright growth in the new quarter. With the advantages of multi-brand strategy, new channel control and scientific research innovation, the growth of Shangmei will be highlighted rapidly.