Cailian News Agency, January 11th (Reporter Luo Yuchen) At the beginning of the new year, the domestic beauty market is still waiting for recovery in a difficult situation, and international brands have taken the lead in starting a new round of price increases. Cailian reporter learned from the offline counter that many international beauty brands plan to raise prices after the Spring Festival, covering all products, with an increase of 5%-10%.
Different from the international big-name "Passion Shouts Up", many flagship stores of domestic brands such as Polaiya, owned by Polaiya (603605.SH), Winona and Mao Geping, owned by Betani (300957.SZ) all reported that they had not received the price increase notice. It is worth noting that although domestic brands have not publicly raised prices on a large scale, it is not uncommon to "quietly" raise the prices of popular items by upgrading and changing packaging.
For the phenomenon of brand price increase in the downward period, Zhang Yang, the founder of Solution Consulting, believes that customer unit price is an important part of brand differentiation. In the downward period, the advantage of low-priced brands is difficult to sustain, and the profit of a single product cannot be supported, so a series of problems arise; A brand with premium power is "selling a single order and earning a single order". After all, "profit space is research and development space" can support the brand to develop better in a difficult situation. She pointed out that the signal released by the downward brand price increase is actually to gain more room for manoeuvre, and more and more domestic brands are gradually realizing this problem.
International big names shout up at the beginning of the year
Near the Spring Festival, there are crowds in the vicinity of Wulin Square in the central business district of Hangzhou. The reporters of Cailian Association visited a number of surrounding shopping malls and learned that there are indeed many brands that are planning to raise prices after the Spring Festival. The sales of Estee Lauder, Dior, Guerlain, Clinique and perfume brand LeLabo all clearly stated that "it will rise after the holiday". However, according to the sales representatives, the new round of price increase is still in the brewing stage, and the range of price increase has not yet been determined, so only a relatively vague range is given.
"It is estimated that it will rise to 620 yuan to 660 yuan, and the increase in perfume will be even greater." Dior brand sales pointed to an air-cushion powder cake with a price of 600 yuan on the shelf. When the reporter questioned whether the 10% increase was too large, she responded: "Many brands have to raise their prices, not only our family, but also perfumes."
For the reasons of price increase, brand sales have different opinions. "We will go up across the board. Maybe every product will go up by 20 yuan -30 yuan. Now nothing will go up, right? All kinds of costs are rising. " Clinique brand sales blamed the price increase on rising costs. Judging from the sales of Guerlain brand and Estee Lauder brand, the price increase is more customary, "every February is the price adjustment period".
It is understood that in 2022, the beauty industry experienced two rounds of price hikes in March and July respectively due to cost pressure, involving different brands. Affected by this, some brands said that due to the price increase in 2022, there is no price adjustment plan in the short term. "This lipstick has risen in 22 years, from 370 yuan to 385 yuan, and there will be no price adjustment for the time being." Gucci brand sales introduction said.
It has been pointed out that since 2021, the costs of raw materials, transportation and warehousing have been rising continuously, and brands are indeed facing certain cost pressures, so they have started to raise prices one after another. With the general decline in the prices of various bulk raw materials in Q3 in 2022, this kind of cost load has been reduced, but the sharp fluctuation of exchange rate has put new pressure on the profits of imported goods.
Beauty cosmetics wait for the dilemma to reverse.
Statistics from the National Bureau of Statistics show that the domestic beauty market is still in a difficult period.
Since August, 2022, the domestic retail sales of cosmetics have been declining for four consecutive months year-on-year. Even though it was promoted by the "Double Eleven", the retail sales of cosmetics in November still failed to reverse the trend, falling by 4.6% year-on-year. Considering that the discussion on the "Double Twelve" promotion was not hot, the retail sales of cosmetics in December was hardly optimistic, and "six consecutive declines" might be inevitable.
Under the downward pressure, more and more brands are forced to clear out. Since 2022, CROXX, YES! IC, Fangji and a number of former cutting-edge domestic brands announced the clearance or closure of stores, and overseas brands even withdrew in large numbers, including young brands such as The Oriental and Huda Beauty, as well as old brands such as Shuizhiao, Yidi House and Feishi Shop, which have been deeply cultivated in the China market for many years.
Even if it has not been eliminated, the severe living environment has forced a number of brands to make substantial adjustments, and channel adjustment bears the brunt. Brands such as Yueshi Fengyin, Maybelline and Heyan have reduced their offline channels and started to attack online in an all-round way. However, time has passed, the online channel dividend period has passed, and the traffic cost has risen. An interview with a new domestic brand revealed that the brand began to specialize in online at the end of 2021, but the actual situation is far less than expected, and online competition has become unprecedentedly fierce.
(Editor Liu Yan)
This article comes from Luo Yuchen, a reporter from Cailian Association.