Efficacy Ingredients Create Brands

Chinese brands' attention to ingredients has once again set off a new craze. Previously, the success stories of ingredients making a successful brand such as Pro-Xylane to L'Oreal, Niacinamide to OLAY, which were widely known. Now, can ingredient stories still create a successful brand?

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Around 2018, Chinese or international ingredient-centric skincare brands such as HFP and The Ordinary went viral across China. The concept of ingredient-centric skincare also emerged among Chinese consumers.

After that wave of ingredient party brands, Chinese brands are once again discussing ingredients at events such as "Amazing Chinese Ingredients" this year. It seems that there is a wave of ingredients that will bring a brand to become famous again.

Chinese beauty brands eye on stories of ingredients

In May this year, Tmall launched the "beauty industry vitality recovery plan" and released the "Chinese ingredients" year-round support plan to help the digital transformation of Chinese beauty brands and achieve a new breakthrough in the scale of the Chinese beauty market. Almost at the same time, Ocean Engine, Marubi, SHELOG, PROF.LING, CHANDO, PROYA and HBN jointly created the "Amazing Chinese Ingredients" project to help the development of Chinese ingredients for beauty brands. It is reported that the topic of "Amazing Chinese Ingredients" on TikTok platform has been played more than 4.69 billion times so far.

Only three months later, Tmall again joined hands with seven Chinese brands in August this year, including Forest Cabin, One Leaf, All about Aloe, HBN, Marubi, CHANDO and Dr. Alva, to launch the "Amazing Chinese Ingredients" campaign with over 300 million reads on Weibo in just four days.

Chinese beauty is starting a new boom in the "ingredient story"

"Chinese ingredients" means it particularly originated in China. For example, HiMurchaSin from CHANDO is claimed to originate from the Himalayan polar regions. Chinese camellia skincare pioneer Forest Cabin has launched the "Qingxuanzui" ingredient. SHELOG is the main focus of complex plant ingredients X Compocalm from pine mushroom, white truffle bacteria, birch brown hole bacteria and others.

From CHAILEEDO incomplete statistics, up to now, the application of exclusive raw materials or patented ingredients of dozens of companies/brands among Chinese brands. Shanghai Jahwa, Pechoin and several innovative brands have established their own competitive barriers by virtue of exclusive ingredients.

It is worth mentioning that the data from TikTok e-commerce and the Suanshu Institute E-commerce under Ocean Engine shows that in the second half of 2021 alone, compared with the first half, the search volume of beauty industry content on TikTok grew 135%, of which the content of beauty ingredients grew 184%, exceeding the industry's general market. It indicates that the content about "ingredients" has received more active attention from users.

With such a trend, it is not surprising that the "ingredient story" has become a key point for beauty brands to compete.

Essence of creating ingredients is to promote a brand

Just like Pro-Xylane to L'Oreal, niacinamide to OLAY, ergothioneine to Estee Lauder, the ingredients went viral thanks to the brands and brands are also benefit from the reputation of the ingredients. More brands tend to follow the step by creating ingredients to promote brands.

The early practice is “Borrowlism”. It means that companies or person who wants to create a brand will borrow the popular ingredients or successful form from other brands at that time. In 2018, the Canadian brand The Ordinary was known as "ingredient bucket". Its product is named after its ingredients. It left a deep impression on Chinese consumers with its low price, single-ingredient, use of ingredients, and other distinctive features.

This practice soon became popular in China, when brands represented by HomeFacial Pro (HFP) also printed its ingredients such as oligopeptides, hyaluronic acid and astaxanthin directly on their product packaging. Such products were gaining attention among circles of ingredient-centric group. The brand is known to have ranked on the Tmall Beauty Top 10 list in the Chinese Double 11 Shopping Festival in 2018 in seventh place. However, it fell out of the top 10 list in 2019.

Another case is that during the Chinese Double 11 Shopping Festival in 2017, OLAY's sales ranked first in the international mass beauty category. Olay White Radiance also ranked first in the sales of the essence category. It became the most well-known representative of niacinamide products. "It can be said that niacinamide became popular by OLAY. At the same time, niacinamide also made OLAY a success," said an industry source.

Since then, niacinamide has become the "holy grail of whitening" in the hearts of consumers. On Xiaohongshu, there are as many as 100,000+ notes about niacinamide and the majority of these notes have mentioned OLAY White Radiance.

After that, niacinamide bonds with whitening. More and more brands entered the game, niacinamide is also from skincare to body care, toothpaste, oral beauty.

However, the reality is that the practice of following in the same footsteps like using popular ingredients from the big brands ignoring the overall development of the brand put the cart before the horse. After L'Oreal and OLAY, there are very few brands that can be in the craze with Pro-Xylane and niacinamide.

Therefore, today's brands pay more attention to the exclusive ingredients and the technical logic behind them. They tend to build the brand's unique ingredient IP so that the ingredients serve the brand, which is the real meaning of creating ingredients.

Can ingredients still achieve the success of a brand?

Many industry insiders said that it is easier to understand the role and efficacy of ingredients for consumers. Consumers can even be informed of the efficacy of ingredients through Baidu queries so it is the most convenient way to communicate with consumers about ingredients.

This is also mentioned in the Beauty Industry Transparency Perception Assessment Report, "72% of consumers hope brands to actively explain the efficacy of product ingredients to consumers and more than 60% want brands to explain the source of product ingredients". This reveals the objective reasons why brands want to communicate with consumers through ingredients.

On the one hand, it is easier for brands to get closer to consumers through ingredient stories. On the other hand, after the market has educated consumers, the latter is more accustomed to understanding the characteristics of a brand starting from the ingredients.

As consumers are still so concerned about ingredients, does it mean that ingredients are still a shortcut to branding?

An anonymous industry veteran says that there are many factors that contribute to the success of a brand or a product and ingredients are just one of them. "Although, many traditional Chinese cosmetics are telling the story of ingredients, but its core is actually competing with the brand's R & D strength. Its purpose is different from the new brand telling the story with ingredients."

Although the first step for innovative brands to tell a good beauty story is still the good ingredients, it is not limited to ingredients that are different from before. Brands still need to strengthen the efficacy of the product.

For example, UNISKIN and HBN both focus on the anti-aging sector and each of them has made technological innovations on A-alcohol. In July this year, OGP, a brand of Yige Group, also announced that it had broken through the technical bottleneck of the blue copper peptide ingredient. With the aim of establishing the image of a brand with efficacy, it applied the anti-aging ingredient of the blue copper peptide as the starting point.

Undoubtedly, the ingredients play a crucial role in the initial development of a brand as it is the first barrier to communication between the brand and the consumers. However, it is the efficacy of the brand that ultimately captures the hearts and minds of consumers.

More importantly, the success of the brand should make much effort in the formulation technology, publicity, marketing, channels and others in addition to gimmicks of ingredients. As a senior industry professional said: "There is no shortcut to running a brand, only down-to-earth."