Dilemma For The Domestic Beauty Makeup Market and The Way Out
“Vicious circle” of brand power and low brand premium
With a low brand power, it is hard for domestic brands to gain high brand premium. As a result, they have to keep the price at as middle and low level. To take up a larger market share with cost effective products, the domestic brands are willing to sell at a low price. Inevitably, these brands are deemed as middle and low-end ones by the consumers, leading to lower brand power.
In addition, the foreign brands keep developing the Chinese market and the penetration of foreign brands is accelerated by the overseas shopping platforms. Overseas shopping platforms facilitate the purchasing and delivery process for the consumers, virtually enhancing the consumers’ aware of the international brands, even those that are still unavailable in China.
The way out: diversified marketing approaches
Without substantial improvement in product competitiveness, diversified marketing approaches will be a way out for domestic brands. Changes in marketing strategy include:
Offer joint products with some other brands with similar style and arousing topics (e.g. joint products of Maxam and White Rabbit Creamy Candy)
Cater to market preferences, look for some stars who help efficiently promote the products and strengthen interaction with followers (e.g. those who have shared the microblog over 10,000 times may get postcards sign by the stars)
Customized products (Chinese style external package)
Beauty Evolution: From Query of Ingredients to Consumption Decision
The growth of content sharing platforms like Little Red Book, smzdm.com in recent years shows that users are affected by the more factors when making consumption decisions and more demand for consumption information. Currently, it has become daily habits for the new generation of consumers to view the ratings on Dianping when selecting restaurants, to view the ratings on Little Red Book before online shopping and to inquire ingredients on Beauty Evolution before buying skin care and makeup products.
With the growth of “users caring about ingredients”, many players providing vertical content information emerged, including information services platforms like Beauty Evolution, JIMI, Meijijia, etc. focusing on product ingredients and skin types of the users and helping users making decisions. Relying their professional knowledge, such vertical makeup information platforms help the users to learn about the products and play a essential role in the decision making process of the consumers.
Relying on the data accumulated, algorithm and recommendations, such platforms influence the decisions of the consumers and have their observation and insights into the decision-making process of the consumers. like Dianping.com, they rely on a huge product library and high-quality ratings and support the basic structure of the business. Though compared with Dianpin.com, Beauty Evolution and similar platforms have a smaller audience and fewer consumption scenarios, they enjoy high user stickiness thanks to their professionalism and capacity to reach target users. Therefore, when the growth of makeup market was recovering in 2017, such platforms broke even and even saw low profits. However，decision platforms are closer to consumers than social platforms. In diversified cooperation with businesses in the next stage, not to compromise the credibility of the platforms has become a major consideration.
Perfect Diary: Control of Hot Channel Marketing
Content channel marketing
Perfect Diary went viral thanks to the building of content marketing channels. Based on the features of its own brands and products, Perfect Diary focused on Little Red Book, Bilibili and other platforms attracting various young consumers, to launch products on target market. After the consumers’ attention and discussion are aroused by the stars, the products are tried by top and waist KOLs, attracting the consumers to buy. The domestic beauty makeup market is developing fast thanks to the new channel marketing. The market still enjoys dividends relying on user stickiness cultivated by the stars and KOLs. Its sustainable leadership is to be verified.
Cooperation with upstream OEMs
Most of emerging domestic brands stick to the strategy of first-class quality and affordable price. The price of leading products ranging from 39 Yuan to over 100 Yuan is acceptable for the students and the young people. Though saying that its products are of first-class quality, Perfect Diary doesn’t have its own production plants and rely OEMs to produce makeup products. There may be risks in product quality and some online consumers have already questioned the quality of its mascara and foundation makeup. In the future, while raising production and speeding up new product R&D, Perfect Diary will face uncertainty in cooperation with the OEMs and the quality consistency of some products may be affected.
Future development pattern
In comparison with the development of makeup market in the US, Japan and South Korea, the domestic makeup brands will turn out to be an important segment in the industry in China. Currently, the domestic makeup brands concentrate on the low-end market and some even are working on the middle and high-end market. The competition in the industry will rest on whether the brands have accumulated sufficient awareness to support the higher premiums in the future. Therefore, the brands on the domestic beauty makeup market should enhance the awareness of marketing and focus on improving brand effect.