New Beauty Brands have a tough time living in 2022
- Chaileedo Press
- Oct 11, 2022
- 3 min read
In the era of normalization of the epidemic, new brands are facing more intricate and diversified problems.
Double Eleven has been one of the major online shopping carnivals in China, and for the vast majority of brands, the holiday is good for brand product promotions.
However, more of the outside world's focus remains on the big international, headline Chinese brands. Compared to them, new beauty brands may still receive many challenges in their development.
Winter is coming for new brands
Looking back at this year, the epidemic is normalized, the flow dividend is not there, the new consumer market has entered a period of adjustment, and the new Chinese beauty brands are traveling to the cold winter.
Public information shows that sales in the cosmetics category of Tmall 618 in 2022 fell by nearly 20% compared to the same period last year. As the performance growth of some new beauty brands stalled, the capital circle's investment enthusiasm for them gradually faded. From the perspective of financing, the beauty market in the first half of the year can be described as sad and dismal.
According to data from linkshop, there were 39 financing events in the beauty sector from January to June 2022, compared with 61 beauty financing events from January to June 2021, the number is almost half folded. Even if the capital circle is still interested in beauty, but the protagonist has changed from brands to upstream companies.
On the one hand, the competition among new brands is intensifying, and on the other hand, the beauty market environment is not good. In the era of normalization of the epidemic, new brands are facing more intricate and diversified problems.
Some industry insiders believe that the emerging beauty brands in China have a high degree of homogenization. They remain similar in terms of product features, user positioning, and marketing strategies, which makes it difficult to build brand power. Users tend to buy at e-commerce festivals or when there are discounts, and once the promotional activities stop, sales are at a standstill.
How do new brands break out?
The moment of the beauty industry turnaround does not seem to have arrived. Chinese beauty brands are currently facing the problem of increasingly expensive customer acquisition costs, with a large online voice but difficult to form repeat purchases. The future of Chinese beauty brands will certainly seek more ways to stabilize customer flow or improve sales. What else can new brands rely on if they want to continue the race on the beauty track?
As we all know, international brands quickly find their status, in addition to stable funding and R & D system, omnichannel layout capabilities and other factors, the long-term accumulation of brand equity is the most important cornerstone. For the survival of the new beauty brands encountered difficulties, the brand foundation is not stable is also the key factor of "higher failure rate".
For many new brands, the large beauty category is often already occupied by traditional big brands. Therefore, it is a practical path to enter from the small beauty category, and easier to make product innovation and create a blue ocean market, but will inevitably face increased competition.
"For new local color cosmetics brands, having the opportunity to segment track demand while still maintaining their strategic stamina, it is impossible to ask a product to solve all consumer pain points after it is launched in the market." Huang Jing, chief operating officer of the up-and-coming color cosmetics brand Into you, said that the choice of products to do iterative product upgrades through the consumer feedback mechanism after the launch of the market, with newer products to complement the needs of previous consumers, thereby expanding the consumer base of the entire brand.
Some industry insiders believe that some products of the new brand can be distinguished from the existing homogeneous competition of consumer products in the market, and can themselves produce more differentiation in the whole composition, formula, efficacy and even use scenarios, in order to lead the whole industry market trend.
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