China Beauty Trends: Traverse Product Life Cycle of Emerging Brand
- Chaileedo Press
- Oct 5, 2022
- 5 min read
Winning in Efficacy, Welcome the Future. On September 22, the 5th Conference on China’s Cosmetics Trends, hosted by CHAILEEDO, was held in Hangzhou with the theme of "Winning in Efficacy". During the conference, PMPM's co-founder and CMO, Guo Wenci, brought a keynote sharing on "The Inflection Point of Emerging Brands".
Hi everyone, I'm Guo Wenci, the co-founder of the emerging skincare brand PMPM. I am very happy to receive an invitation from CHAILEEDO today and have the opportunity to chat with you. As an emerging brand, I would like to talk to you today about the inflection point of emerging brands.
First of all, I purposely went to look up the information. If you look at Fortune magazine's survey on the survival rate of Chinese startups, you will find that less than 7% of startups can survive for more than 5 years, and less than 2% of startups can survive for more than 10 years.
So let me summarize simply and crudely, 93% of start-ups will die easily within 5 years. This is the 3rd year of PMPM and we hope to traverse the Product Life Cycle. we hope that over time, each time we hit an inflection point, companies and brands can move up, not down, so that they can keep traversing the cycle.
In the consumer goods industry, if we want to determine whether a new consumer brand has survived the 0-1 cycle, we usually say it has to go through two stages. The first stage is whether it has broken 100 million in sales, and the next stage is breaking 1 billion. Today a consumer brand can start from 0 to finish accumulating 1 billion sales, then it is the completion of the first life cycle.
I looked at the history of China since the reform and opening up 40 years ago, and as the times progressed, how long did it really take for each brand to go from 0-1 billion since its birth.
For example, the first foreign brands to enter China during the reform and opening up period, such as Nike, which first entered the Chinese market in the 1980s, took 24 years to go from 0-1 billion. As brands are established later and later, we find that the time it takes to go from 0-1 billion is getting shorter and shorter. For example, Li Ning took 13 years, Banana took 8 years, Genki Forest took 4 years, and PMPM took 1 year.
It's not that the shorter the time it takes means the brand is better. What I want to say is that the rapid change of the times and the booming economy, as well as the continuous progress of the Internet media, make the time for brands to traverse the cycle become particularly short. We used to have 20 years to make a brand from 0-1, but now brands are caught off guard and only have one year to go from 0-1.
What is one of the problems we have encountered? It's that the inflection point for emerging brands is coming faster and more rapidly than in the past.
In the second year of PMPM brand, the sales broke 1 billion, so the inflection point came very fast. I used to have a theory: in the process of brand growth, the founding team brings the brand up like a snowball, and then goes on to do growth, the founding team stands on top of the bigger and bigger snowball and runs with the snowball. But I found that after the advance of the times shortened the whole life cycle, the founding team did not run on the snowball, but was chased by the snowball.
We sometimes find that everything is caught off guard and the inflection point has arrived before we are ready. As PMPM entered its third year this year, we took a very serious sunken look at what we could do to move up rather than down if we were already facing the inflection point for emerging brands today.
In addition, we found from the fact that PMPM broke 1 billion sales that the Chinese consumer goods market is now affirming the new Chinese brands. We are grateful that Chinese consumers are now more and more accepting of Chinese original brands and no longer believe that only foreign brands are good brands.
At the same time, we also see that there will still be stereotypes of new Chinese brands in the market. For example, some people still say that domestic brands are just not as good as international brands, and some people say that if a brand has such a high growth rate in such a short period of time, it is definitely not a good brand, it is definitely a marketing brand. Others will say that if you are particularly good at telling brand stories and packaging is particularly good-looking, then you are certainly not serious about making products.
We two founders started PMPM brand with the heart to be a world-renowned Chinese original brand, because we used to work in foreign companies, so we hope to create a Chinese original brand to the world. This dream is very ambitious, and we are still only through the first cycle, I hope we will not forget this vision today. "Why we started", this is not to be forgotten.
We also pay attention to the history of other brands. There is a joke that "humans are repeaters by nature", history repeats itself and we find that when we look at history, we can find some lessons that we can learn from and refer to. You can look at the brands that existed, but have now disappeared, and why they disappeared, and you can look at the brands that survived, and what they did to survive through the cycle.
We see several key words, such as science, innovation, insight, value, efficacy, spirit, cognition and so on. This brings us a thought, if the ultimate vision of PMPM today is to be able to become a world-renowned Chinese original brand, then we have to figure out the underlying logic of this industry, what we need to do if we can get to this end point, and what long-term value we can provide for the brand and consumers.
We believe that if we want to give birth to a globally renowned Chinese original brand today, it is very important to return to the ability of scientific research and innovation and basic research. Today, as a brand that has only been in business for 3 years, how are we going to build such capacity to catch up with these big international brands with 100 years of scientific research strength, which is not enough by 3 years of strength. But there are many giants in the industry. We can invite them to join this journey and join us to create a new original brand in China together.
Q&A: How does a brand create its own classic long-lasting single product when the development of new ingredients cannot keep up with the demand for new brand updates?
Guo Wenci: In the research and development of new raw materials, PMPM still insists on standing on the "shoulders of giants", we have a lot of scientific research results that have not been transformed. We can also cooperate with some domestic and foreign authoritative research institutions, like PMPM is also using Ashland, the "giant", to cooperate in the development of exclusive raw materials. There are still many treasures of scientific research in this industry to be explored.
Of course, I think that if we want to make a good product today, we don't necessarily need to rely on new raw materials, the ultimate value of a good product is reflected in whether consumers perceive it as a good product. All have "efficacy ingredients" in the "best ratio" of the compounding support. Therefore, it is not necessary to use new ingredients to provide consumers with good skincare solutions, the formula is the key to effectiveness.
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