Mariedalgar's Sister Brand YES!IC Pulls out of the Chinese Market

Abstract: Recently, the news was unveiled that the Chinese high-end makeup brand YES!IC has pulled out of the market. It is reported that the quit of YES!IC is related to the over-positioning of the brand, niche, and the recurrence of the pandemic.

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According to CHAILEEDO, YES!IC is the second strategic brand launched by Chuang Yuan Group after Mariedalgar, which was officially unveiled at the 10th-anniversary celebration held by Mariedalgar in 2018. The packaging design focuses on the Nordic ins style, frosted texture, and Morandi color scheme. It is a makeup brand focusing on the new generation of consumer groups who were born after 1995 and 2000.

Compared to Mariedalgar, YES!IC is positioning high-end makeup. Its main products are blush, eye shadow, foundation and other products with more than 140 SKUs. It is priced between $7.2 to $44.2. The average price of the products is 20% to 30% higher than Mariedalgar.

From public information, it is known that since its launch in August 2018. After only six months, its offline terminals have opened nearly 150 stores. The highest single-day sales in stores are close to $7395. In December of the same year, its flagship store on the Chinese e-commerce platform Tmall was opened. In less than a month, the number of store followers exceeded 50,000. Its popular single products such as Magic eye shadow and Rose eye shadow palette were sold for more than 2,500. Judging from the above data, YES!IC's achievements at the beginning of its establishment were relatively impressive.

However, YES!IC's maverick brand tone and artistic makeup display may not fully meet consumers' pursuit of makeup practicality and fail to resonate well with consumers. In response to its marketing posters, some netizens have suggested, "Is this makeup finish a joke? No consideration for practicality at all." In addition, some industry sources expressed that the positioning of the YES!IC is relatively awkward. Compared with the classic makeup Carslan, its design seems a little too fashionable. Compared with innovative brands such as Pink Bear, the price is more expensive.

YES!IC is not the only makeup brand to exit the Chinese market recently.

Recently, stila, a best-seller in Europe and the US, announced its quit from the Chinese market. Last week, makeup giant Maybelline also announced the closure of its offline stores in China. GlamGlow, an Estee Lauder Group brand, has closed its official stores and opened on mainstream e-commerce platforms in China as well as its accounts on major social media platforms. Brands such as stila and GlamGlow withdrew from the Chinese market either because they did not communicate well with consumers resulting in a lack of acceptance. In addition, the impact of the epidemic may have exacerbated the retreat of these brands. In the first half of the year, China's overall cosmetic retail sales of $28 billion, down 2.5% year-over-year, which was the first decline in the same period in nearly a decade. Its exacerbated the exit of YES!IC

Even China's top makeup brands such as Perfect Diary and Florasis, which appear to have matured, are facing declining sales. Perfect Diary posted negative sales growth for the first time in 2021. Its parent company, YSG, reported a 38.3% decline in total net revenue to $131.8 million. YSG explained the revenue decline as a result of weak industry-wide demand for color cosmetics and the recovery of COVID-19 in major cities. COVID-19 also affected offline store sales and a 45.6% decrease in net revenue for its color cosmetics brands (including Perfect Diary, Little Ondine and Pink Bear). And in the month of July just past, sales of Florasis on the Chinese e-commerce platform Tmall fell 51.24% year-over-year.

For the Chinese market, color cosmetics brands need to shift their focus more from marketing to product. In the current situation of relatively low market demand, brands may need to create classic long-running products, which can effectively reduce ineffective marketing expenses and also establish a competitive barrier for the brand.