Estée Lauder's Fragrance recorded only 1% growth in the Q3 of FY2023, a much narrower increase compared to the 28% growth in Q3 of FY2022 and 30% in Q3 of FY2021. (Credit: Estée Lauder Light & Sound Collection fragrance) On May 3, The Estée Lauder Companies, Inc. released its financial results for the third quarter of fiscal year 2023. In the three months ended March 31, the company achieved net sales of $3.76 billion, down 12% year-on-year, with organic net sales down 8%. In its financial report, the company said it would lower its full-year earnings expectations, with net sales expected to fall by 10-12% year-on-year for the full year. The company’s shares fell by more than 20% following the results, the largest decline ever recorded by the company. (Credit: Estee Lauder share price chart) In terms of product categories, net sales in the Skin Care category were $1.922 billion, down 17 per cent year-on-year. The net sales in the Makeup category were $1.088 billion, virtually unchanged from a year earlier. Its Hair Care category generated $149 million in revenue and other products generated $11 million in revenue. The Estee Lauder fragrance category grew by just 1%, recording a net sales of $585 million and operating income of $89 million, down 15% year-on-year. Estee Lauder said its net sales was driven by Tom Ford Beauty, Le Labo and Estee Lauder fragrances. The decline in operating income was mainly due to an increase in cost of sales, including changes in the brand portfolio. Narrower growth in fragrance business CHAILEEDO found that Estee Lauder's fragrance business recorded net sales of $585 million, which was the lowest increase in two years in the third quarter of fiscal 2023 with net sales up 1% year-over-year. (Credit: Estee Lauder's third quarter Fragrance financial results for the last 3 years) As seen in the table above, the Fragrance achieved significant double-digit year-over-year growth in both Q3 of 2021 and Q3 of 2022, but recorded only 1% growth in Q3 of 2023. And, a breakdown of Estée Lauder's figures from Q4 of 2022 to Q3 of 2023 reveals that its Q3 results were down 32.5% month-on-month. (Credit: Estee Lauder's Fragrance financial results for the last four quarters) In all three quarters of the FY2023 financial report, Estée Lauder specifically mentioned the growth of Tom Ford Beauty and Le Labo. In the current quarter, the two brands’ net sales grew by double digits, reflecting strong growth in each region and double-digit growth in Tom Ford Beauty, Le Labo and Estée Lauder. In particular, Tom Ford net sales grew by double digits, driven by Tom Ford Noir Extreme Parfum and the fiscal 2023 third quarter launch of The Private Blend Cherry Collection. Le Labo was benefited from growth in every region and across almost all distribution channels, driven by continued consumer demand for the brand's staple franchises (such as Santal 33 and Another 13) and high-touch services, as well as targeted consumer outreach. (Credit: Le Labo Santal 33 Perfume) Several fragrance brands declined in China Fabrizio Freda, President, Chief Executive Officer & Director, The Estée Lauder Companies, Inc, noted in a video conference following the earnings release that after four quarters of pressure from COVID-19 restrictions and outbreaks, Mainland China achieved low-single-digit organic growth. The duration of Estée Lauder's third quarter of fiscal 2023 enjoyed two important holidays: Valentine's Day on February 14th and Women's Day on March 8th . These two holidays are very important promotional points for the beauty industry every year, especially on Women’s Day, a holiday that features women. For this holiday, major beauty brands pull out all the stops to compete for female consumers. However, data shows that a number of Estee Lauder's fragrance brands experienced a decline in performance in February and March. According to CHAILEEDO data, in March 2023 on the Chinese e-commerce platform Tmall, Tom Ford perfume sales were approximately 3.28 million yuan ($474,500), compared to sales of approximately 8.99 million yuan ($1.3 million) in March in 2022, a drop in sales of 63.5%. In February 2023, Tom Ford perfume sales were 6.36 million yuan ($920,000), compared to February last year sales of 15.22 million yuan ($2.2 million), also a drop of 58.2%. Frederic Malle and KILIAN, another Estee Lauder fragrance brand, also saw sales decline to varying degrees in March. According to CHAILEEDO data, Frederic Malle sales were 100,000 yuan ($14,500) in March 2023 on the Tmall platform, compared to 280,000 yuan ($40,500) in March last year, a decrease of 64%. In fact, according to CHAILEEDO Data, sales of beauty brands generally declined in March. This is closely related to the unpromising turnover of the promotion for Women’s Day. According to the CBERI, during Women’s Day in 2023, the turnover of major international brands such as Estee Lauder, Lancome and La Mer fell by 20% to 50% year-on-year. Most beauty brands saw their turnover decline year-on-year. In this regard, Dongxing Securities research report shows that "the pace of post-epidemic consumption recovery is still slow. The repair of residents' purchasing power still needs some time. In the absence of significant improvement in total consumption capacity, the release of some of the consumer demand for travel will also affect the demand for other optional consumer categories to a certain extent. Against this backdrop, the overall performance of listed companies in the beauty industry in the first quarter of 2023 may be relatively weak and the industry as a whole may achieve single-digit earnings growth." (Credit: Tom Ford Noir Extreme Parfum) Iconic fragrance brand in China market may be a turnaround CHAILEEDO found that the company is the world's third largest cosmetics company by 2022 with $17.74bn in sales. The company is also grabbing more market share in China for its fragrance segment this year. Firstly, Estée Lauder captured the "cash cow", Tom Ford. On 28 April 2023, Estée Lauder announced that it had completed the acquisition of Tom Ford for $2.8 billion. It also announced the appointment of Guillaume Jesel as President and CEO of TOM FORD and Peter Hawkings as Creative Director of TOM FORD. And in the first quarter of this year, Tom Ford Beauty announced Chinese actress Shu Qi as the brand's ambassador for fragrance and makeup. Commenting on the announcement, Fabrizio Freda said, "Indeed, consumer demand is robust for our diverse portfolio of brands in developed and emerging markets around the world, evidenced in both organic sales growth and retail sales trends, which drives our confidence in the long-term. What is more, we are thrilled to have acquired the Tom Ford brand last week and are optimistic about its promising growth opportunities." Secondly, the company has officially introduced its fragrance brand Le Labo in China. Le Labo showed double-digit growth during the quarter, according to the financial report. On May 4, the company’s niche fragrance brand Le Labo made an official announcement that Le labo's first shop in mainland China is located in Shanghai. The niche fragrance brand, which was acquired by Estée Lauder in 2014, has become one of the Companies' most profitable fragrance brands, with Le Labo achieving double-digit in net sales growth in this latest results release. Although the brand has not yet officially entered China before, it has already gained a considerable amount of popularity among Chinese consumers. On the Chinese sharing platform Xiaohongshu platform, there are already 20,000 notes on Le labo. Its iconic product Santal 33 has become the first premium fragrance for many consumers. In fact, apart from Le Labo, which is highly anticipated by Chinese consumers, its fragrance brand Jo Malone London has also achieved remarkable results in China. In the 2022 4-hour brand list on Tmall during Chinese Double 11 Shopping Festival, Jo Malone London came out on top, with Tom Ford coming in third. (Credit: Jo Malone Rose Blush Cologne) The 2022 Fragrance Product Insight Report by CHAILEEDO shows that in 2022, the global high-end fragrance market size reached 81.9 billion yuan ($11.8 billion), with a compound annual growth rate of 6.14% from 2023 to 2028. Therefore, the global high-end fragrance market size is expected to reach 86.9 billion yuan ($12.6 billion) in 2023. Based on the 4.1% share of China's fragrance market in the global fragrance market, China's high-end fragrance market is expected to reach 3.6 billion yuan ($520.8 million) in 2023. A further breakdown of the high-end fragrance shows that the high-end unisex fragrance market has grown at the highest CAGR in the last five years. In the booming Chinese fragrance market, high-end fragrances may contribute to Estée Lauder's strong and rapid growth in the country.

Lafang, the Chinese cosmetics producer, reported operating revenue of 887.12 million yuan ($128.35 million) in 2022, down 19.45% compared to 2021. The net profit attributable to shareholders of the listed company reached 59.23 million yuan ($8.57 million), representing a 14.21% year-on-year decline. Lafang China Co.,Ltd (Lafang), the Chinese cosmetics producer, reported operating revenue of 887.12 million yuan ($128.35 million) in 2022, down 19.45% compared to 2021. The net profit attributable to shareholders of the listed company reached 59.23 million yuan ($8.57 million), representing a 14.21% year-on-year decline. The net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses reached 15.25 million yuan ($2.21 million). In terms of brand revenue composition, "Lovefun" and "Raclen" remain the company's pillar brands, with operating revenue of RMB 675 million ($97.67 million), accounting for 76.17% of the total operating revenue. Sales revenue for "REPACELL" was RMB 77.82 million ($11.26 million), a year-on-year increase of 66.48%. It is reported that in 2022, Lafang continuously optimized and adjusted its supply chain and marketing channels, deepened the "personal care + beauty" product matrix, comprehensively promoted product innovation and upgrades, and strengthened its core competitiveness, resulting in a relatively stable performance. In the first quarter of 2023, the ongoing benefit of channel optimization has significantly improved the company's profit structure, allowing it to enter a stage of high-quality development. According to the annual report, in terms of channel construction, in 2022 Lafang actively developed online channels such as Douyin and live streaming platforms, in addition to collaborating with well-known domestic shopping platforms such as Tmall, JD.com, Pinduoduo, and Meituan, achieving continuous expansion and optimization of its channels. Lafang online channels experienced high-speed growth. Its imported brand " REPACELL," which is the main agent for high-end skincare products, effectively increased its brand awareness and penetrated the high-end market through precise marketing across multiple online and offline channels. Sales on Douyin alone increased by 503% year-on-year. In the future, Lafang will continue to focus on the development strategy of "high quality, high conversion, and high efficiency," and concentrate on its main brand while cultivating its sub-brands. With customer needs at the center, the company will continue to innovate its operating model, enhance its product research and development capabilities and product quality, and further strengthen its sales channel construction and promotion efforts to provide consumers with sustainable and high-quality services. The company aims to increase customer loyalty and trust, achieve business sustainability, and maintain a focus on long-term growth.

L’Occitane present the unaudited FY 2023 quarterly update of the Company, L’Occitane sales reached €2,134.7 million ($2.36 billion) in FY 2023, representing a growth rate of 17.9% based on reported rates or 13.4% based on constant rates. L'Occitane has released its unaudited quarterly update for FY 2023, reporting sales of €2,134.7 million ($2.36 billion). This represents a growth rate of 17.9% based on reported rates or 13.4% based on constant rates. L'Occitane said the remarkable growth in FY2023 was mainly driving by the exceptional performance of Sol de Janeiro, as well as the steady growth of ELEMIS. The positive momentum continued into FY2023 Q4, which was driven by early indications of growth in China, as well as an increase in sales through travel retail and cruise ship channels. In terms of brands performance, Sol de Janeiro maintained its exceptional growth momentum, achieving an impressive 135.2% growth in local currency during the 12 months ending in FY2023. This brand was the fastest-growing in the company's portfolio. ELEMIS returned to growth with a solid increase of 8.9% based on constant rates, while the Others category also saw growth of 7.3% based on constant rates. L'OCCITANE en Provence recorded flat sales down 0.5% in FY2023, mainly due to challenging market conditions in China and the divestiture of its business activities in Russia. However, excluding the China and Russia markets, L'OCCITANE en Provence achieved growth of 6.8% in FY2023 and 9.9% in FY2023 Q4. In terms of regional performance, the Americas region remained the best performing region for the company, achieving a growth rate of 62.8% based on constant rates during the 12 months ending in FY2023. This growth was primarily driven by Sol de Janeiro's exceptional performance in the region. The Asia Pacific (APAC) region returned to growth in FY2023, largely due to the company's strong sales in the travel retail channel and improved market conditions in China, particularly in FY2023 Q4. In terms of channel performance, the wholesale channel continued to be the fastest-growing channel for the company, with a 50.9% increase in sales during FY2023. However, the retail channel saw a decline of 2.0% in sales, mainly due to the divestiture of Russia, store closures in China as a result of COVID-19 outbreaks, and reduced trading with fewer retail stores worldwide. Excluding the China and Russia markets, the retail channel achieved growth of 7.2%. Online channels experienced growth of 4.8% based on constant rates, largely driven by the exceptional performance of Sol de Janeiro.

Henkel released its 2023 Q1 results. The Düsseldorf-based consumer goods company reported 6.6% organic sales growth to €5.6 billion ($ 6.18 billion) in Q1. Henkel said the growth was driven by double-digit pricing, while volumes down 5.4% compared to 2022 Q1. Henkel, the Düsseldorf-based consumer goods company released its 2023 Q1 results. The company reported 6.6% organic sales growth to €5.6 billion ($ 6.18 billion) in Q1. Henkel said the growth was driven by double-digit pricing, while volumes down 5.4% compared to 2022 Q1. Henkel pointed out that the Q1 growth was driven by very strong sales increases in both business units. sales in the Adhesive Technologies business unit increased nominally by 6.1% to €2,791 million ($ 3079 million). With organic sales increased by 6.8%. While in the Consumer Brands business unit, sales increased by 7.3 percent to € 2,772 million ($3058 million) in 2023 Q1. Organically sales were up 7%. Henkel said the business unit recorded a double-digit increase in prices, while volumes declined. In terms of geographical region, European saw a 4.2% increase in organic sales growth. Organic sales in the IMEA region posted a significant rise of 27.8%. In North America, there was a 7.1% organic sales growth. Meanwhile, the Latin America region reported a 17.6% growth in organic sales. However, the Asia-Pacific region reported decline of 4.8%. “We had a good start to the year – despite a continuously challenging market environment. The very strong sales increase in both business units underlines the strength of our portfolio of successful brands and innovative technologies. In the first quarter, we continued our pricing measures to further compensate for the headwinds from raw material and logistics costs,” said Henkel CEO Carsten Knobel. “Today we affirmed our guidance for 2023 and, based on the very strong organic sales development in the first quarter, we are looking at the current fiscal year with confidence.” In addition, Henkel announcement that the company has completed its sell of Russia business unit. the sale price amounts to 54 billion rubles (around 600 million euros). Henkel is maintaining its previous forecast for organic sales growth in 2023, which is expected to fall between 1% and 3%. The company anticipates that both of its business units will perform within this range. Additionally, Henkel has reaffirmed its expectation that its adjusted return on sales, also known as adjusted EBIT margin, will remain in the range of 10% to 12%.

CTG Duty-Free released its Q1 2023 financial report. In the first quarter of 2023, the company achieved operating revenue of 207.69 billion yuan ($3 billion), with an increase of 23.76% compared to 2022 Q1. China Tourism Group Duty Free Corporation Limited (CTG Duty-Free) released its Q1 2023 financial report. In the first quarter of 2023, the company achieved operating revenue of 207.69 billion yuan ($3 billion), with an increase of 23.76% compared to 2022 Q1. The net profit attributable to the shareholders of the company was 23 billion yuan ($332.6 million), a decrease of 10.25% compared to the same period last year. CTG Duty-Free said the Company has seized the opportunities arising from the full recovery of consumption and the relaxation of entry and exit policies, adhered to the concept of “trusted business operation and excellent services”, continuously optimised goods supply and improved service quality, and took multiple measures to release the potential of duty-free consumption, so as to provide consumers with more convenient and high-quality duty-free shopping services. Starting from April 1, CTG Duty-Free has introduced a new policy on delivery methods, which includes "delivery upon guarantee" and "delivery upon purchase". This policy aims to offer more convenient and diverse options for shopping passengers, in order to meet their immediate shopping requirements and enhance their overall duty-free shopping experience. Additionally, this policy will assist the Company in reducing logistics costs, as well as easing the burden on offshore pick-up points. According to CTG Duty-Free 2022 annual report, the company recorded a revenue of 54.433 billion yuan ($7.87 billion), a year-on-year decrease of 19.57%. CTG Duty-Free provides a wide range of duty-free and duty-paid products to customers in various locations, including Mainland China, Hong Kong, Macau, and Cambodia, through its travel retail business. This particular segment of the company focuses on the sale of duty-free and duty-paid merchandise, as well as the income generated from the provision of associated services.

Sephora, the cosmetics brand under LVMH, announced that its China Taiwan official website and APP will stop operation from 11 May. Sephora, the cosmetics brand under LVMH, announced that its China Taiwan official website and APP will stop operation after a year and a half operation, with its last day of business being 11 May. in October 2021, Sephora entered the China Taiwan market through online shopping, and now it has only been a year and a half since its debut in China Taiwan. According to the Sephora official website, orders can still be placed via the Sephora app or website until 23:59 on May 10th, 2023, and orders placed before the cessation of operations will still be shipped normally. In 2022, LVMH, the parent company of Sephora, recorded revenue of €79.2 billion ($87.55 billion) and profit from recurring operations of €21.1 billion ($23.32 billion), both saw growth of 23%, with a remarkable rebound for Sephora, LVMH said Sephora confirmed its place as world leader in the distribution of beauty products. In 2022, Sephora saw "particularly strong" momentum in North America, Europe, the Middle East, and most Southeast Asian countries. The beauty retailer also invested in its omnichannel strategy during the period to enhance the online and in-store purchasing experience for its customers. In July 2022, it is reported that Sephora announced that it was selling its Russian subsidiary to the local general manager of the chain store and exit Russia market. Sephora has 88 stores and 1,200 employees in Russia. It is reported that Sephora initially entered the Russian market through franchising but closed the business in 2008. Later that year, Sephora re-entered the Russian market by acquiring a 45% minority stake in the local chain "Ile de Beaute". Sephora then gradually acquired the remaining shares of the chain and gained full control in 2016, changing its name to Sephora. Sephora's sales in Russia account for about 3% of its total sales.

LG H&H, the South Korean consumer goods company under LG Corporation, released its 2023 Q1 result. LG H&H reported 1684 billion ($1.27 Billion) Korean won in sales in Q1, with an increase of 2.4%. LG H&H, the South Korean consumer goods company, under LG Corporation, has released its financial results for the first quarter of 2023. According to the report, LG H&H generated sales of 1684 billion Korean won ($1.27 billion) during this period, reflecting a growth of 2.4% compared to the same quarter in the previous year. The company reported 146 billion Korean won ($110.32 million) in operating profit, down 16.9% due to overall cost headwinds, including increased fixed costs. In terms of geographic region, LG H&H domestic sales reached 1,184 Korean won in Q1($894.63 million), saw growth of 4.2% compared to 2022 Q1. While overseas sales decreased by 1.7% to 500 billion Korean won ($377.8 million), accounting for 30% of the company sales. China and Japan sales reached 193 billion Korean won ($145.83 million) and 90 billion Korean won ($68 million), down 14.1% and 12.8% compared to 2022 Q1, respectively. While China accounted 11% of LG H&H total sales. In terms of business segments, Beauty business segment sales increased by 0.3% to 702 billion Korean won ($530.43 million) and operating profit decreased by 11.3% to 61 billion Korean won ($46.09 million) in Q1. LG H&H said beauty sales were flat due to delayed consumption recovery in China. DFS channel reported double-digit sales growth due to low base effect, while China onshore business reported double-digit drop in sales. HDB business segment sales reached 563 billion Korean won ($425.4 million), with an increase of 1.9%. LG H&H pointed out that HDB sales growth was led by strong sales performances of Oral Care (‘Perioe’, ‘Euthymol’) and ‘Physiogel’ in Daily Beauty. HDB strengthened portfolio of functional products by launching new products, including hair loss symptom relief shampoo ‘Dr. Groot’ Density Intensive Care and whitening toothpaste & whitening booster for ‘Euthymol’. LG H&H appointed Jung Ae Lee as the representative director and new CEO. LG H&H also released its key business strategies, including Strengthen Brand Portfolio such as enrich ‘Whoo’ brand product lineup, rebuild brand ‘Sum37°‘ / ‘O HUI‘.LG H&H said the company will also focus on expanding overseas business by improving the competitiveness of luxury brands in China and reinforcing North America onshore business capacities.

Estée Lauder released its Q3 report of 2023 fiscal year. The global beauty giant reported $3.75 billion in net sales, down 12% compared to the same period of 2022. The company now expects a decline in sales between 10% and 12% in 2023 fiscal year, due to the slow recovery in Asia travel retail. Estée Lauder released its Q3 report of 2023 fiscal year. The global beauty giant reported $3.75 billion in net sales in Q3, down 11.64% compared to the same period of 2022. The company’s operating income reached $297 million, saw decrease of 73.31%. While the net earnings of Estée Lauder decreased by 72.95% to $155 million. Estée Lauder reported an 8% decrease in organic net sales, with the decline being mainly driven by Asia travel retail in Hainan and Korea. The negative impact on the company's Asia travel retail business was partially offset by organic net sales growth in almost every market. This includes both developed markets as well as emerging markets globally. In terms of business segments, Skin Care net sales declined 17%, primarily reflecting the slower than anticipated recovery of Asia travel retail from the COVID-19 pandemic. Makeup net sales down 2%, were negatively impacted by the challenges in Asia travel retail. Fragrance net sales grew double digits, reflecting strong growth in every region and double-digit growth from TOM FORD Beauty, Le Labo and Estée Lauder. In terms of geographic region, net sales rose 6% in the Americas, returning to growth and benefiting from increases in Makeup, Skin Care and Fragrance. While in Europe, the Middle East & Africa, Estée Lauder saw a decline of 24% in net sales, which was primarily due to the slower-than-expected recovery of Asia travel retail from the impact of the COVID-19 pandemic. In Asia/Pacific, the company saw a 7% growth in net sales, which was primarily driven by the ongoing recovery from eased COVID-related restrictions as compared to the previous year. This growth was led by markets such as Hong Kong, Australia, Japan, and mainland China. Estée Lauder now expects a decline in sales between 10% and 12% in 2023 fiscal year, due to the slow recovery in Asia travel retail. Estée Lauder said the company saw recovery in many markets globally, Asia travel retail business continued to be pressured by the slower than anticipated recovery from the COVID-19 pandemic, especially in Hainan and Korea. “Our developed and emerging markets grew strongly and exceeded our expectations to offset an even slower-than-expected recovery in Asia travel retail. Each of The Americas and Asia/Pacific returned to organic sales growth, bolstered by increases in the United States and China, while the markets of EMEA continued to prosper.” President and CEO Fabrizio Freda said.

Colgate released its 2023 Q1 result. The company‘s net sales increased by 8.5% to $ 4.7 billion. Colgate remains the market leader in toothpaste, with a global market share of 40.2% year to date. According to Colgate's Q1 2023 results, the company's net sales rose by 8.5% to reach 4.7 billion. Additionally, there was a 10% increase in organic sales in Q1, with growth reported in all divisions and in all four categories. Colgate said the company remains the top brand in toothpaste with a global market share of 40.2% so far this year. Similarly, Colgate also maintains its leadership position in manual toothbrushes, with a global market share of 30.6% year to date. In terms of divisional performance，North America organic sales increased by 4%. Colgate organic sales growth in oral care and personal care products, there was a decline in organic sales in home care due to the voluntary recall of certain Fabuloso multi-purpose cleaners. In the United States, Colgate holds a market share of 34.3% in the toothpaste category and a market share of 42.0% in the manual toothbrush category so far this year. While Latin America saw growth of 14.5% in organic sales. Colgate said the organic sales growth was led by Mexico, Argentina, Brazil and Colombia. In Europe，Colgate‘s organic sales increased by 4.5%. Colgate's organic sales growth was driven by strong performance in Germany, Poland, the Netherlands, France, and the United Kingdom. However, there were some declines in organic sales in the Filorga business, which were mainly due to reduced sales in the travel retail sector and in China. In Asia Pacific，Colgate reported 8.5% growth in organic sales. The company ‘s organic sales growth was led by the Greater China region, India, Australia and the Philippines. Colgate also pointed out that the growth in operating profit as a proportion of net sales can be attributed mainly to increased pricing, reduced overhead costs, and cost savings resulting from the Company's funding-the-growth initiatives. However, this increase was partially offset by significantly higher costs of raw materials and packaging, as well as increased investment in advertising. Colgate now has revised its expectations for net sales growth to be between 3% and 6%. This projection takes into account the positive impact of the company's recent acquisitions of pet food businesses, as well as a low-single-digit negative impact from foreign exchange.

In 2022, the GMV of the Chancemate service brand reached 26.485 billion yuan ($2.65 billion), which was roughly the same as the previous year. The operating revenue was 1.538 billion yuan ($222.54 million), an increase of 35.55% year-on-year. Chancemate (Hangzhou Onechance Tech Corp), the Chinese e-commerce service provider, released its 2022 annual report. In 2022, the GMV of the Chancemate service brand reached 26.485 billion yuan ($2.65 billion), which was roughly the same as the previous year. The operating revenue was 1.538 billion yuan ($222.54 million), an increase of 35.55% year-on-year. The net profit attributable to shareholders of the listed company was 180 million yuan ($26.04 million), a decrease of 44.9% year-on-year. The net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was 148 million yuan ($21.48 million), a decrease of 42.73% year-on-year. According to the financial report, Chancemate belongs to the information transmission, software, and information technology services industry. The company's main business includes brand online services, online distribution, and content e-commerce services. Among them, brand online services are the company's main business. During the reporting period, the company added 42 new brands, including Mentholatum, Lesening, and Stokke cosmetics, while ensuring the basic stability of its core customer base. Chancemate attributed the year-on-year growth in operating revenue mainly to the increase in revenue from newly-added customers in brand online marketing services and online distribution, as well as the growth in revenue from new business types such as content e-commerce. However, the total of the company GMV in 2022 showed a slight decline compared to the same period, mainly due to the downward trend in GMV on the Vipshop platform. In 2022, the company's R&D expenses amounted to 32.31 million yuan ($4.67 million), an increase of 32.27% year-on-year. The company's technology department made investments in two directions. On one hand, under the strategy of being a comprehensive e-commerce service provider, the company's existing digital tools completed full-domain adaptation iterations, including full-domain e-commerce ERP, full-domain operation tools, full-domain risk control tools, etc. On the other hand, under the new consumer brand accelerator strategy, the company expanded the data dimensions and depth of data projects and improved industry radar projects. In 2023, Chancemate will continue to expand its general agency model, focusing on the construction of high-quality offline channels for key target groups (member stores, high-end, etc.). It will also deepen cooperation with established brands and accelerate the expansion of new brands. The company will continue to develop explosive subcategories as a platform development strategy and explore more high-quality brands in the trend of sub-segmentation, helping start-up brands to grow through the "new consumer brand accelerator" model.

Localization is a comprehensive consideration by international beauty brands regarding factors such as cost, geography, and brand tone. In recent years, international beauty giants such as Kao, L'Oréal, and P&G have all shifted the production of many of their brand products to China. Perhaps out of consideration for product quality control, international beauty giants mostly use their own factories. In addition, there are also many international beauty brands that are more restrained in terms of product localization. For example, although Shiseido has opened two factories in Beijing and Shanghai, most of Shiseido's branded products are still produced in overseas factories. Another beauty giant, Estée Lauder, only handed over the trial packaging and limited edition packaging procedures of some products to Intercos in Suzhou for OEM, and the materials were all imported from overseas. It is understood that in recent years, it is not uncommon for overseas brands to adopt a similar approach to Estée Lauder. An agent with over 10 years of experience in overseas large-scale distribution told CHAILEEDO, "In the past year or two, many imported cosmetics brands have chosen to place their product filling procedures in China. Among them, Charlotte Tilbury, a popular British makeup artist brand in recent years, is one of the typical cases. It is reported that the brand had already transferred the final filling process to China a few years ago, under the responsibility of the OEM factory Intercos. Nevertheless, Charlotte Tilbury still emphasizes on product packaging that "quality comes from the UK, and raw materials come from Italy". According to CSAR, the last process of cosmetics that comes into contact with the content is completed domestically as a domestic product and completed overseas as an imported product. Therefore, even if only the last filling process is carried out domestically, the above products belong to the category of domestically produced products in China. Overseas beauty brands have been repackaging in China, and cost control may be the main reason. A senior industry analyst believes that "it may be related to cost saving and efficiency improvement,” he said, “The procedures for shipping by sea are relatively complex, and there will be more costs to deal with due to various inspections.”

"Doing R&D is all about differentiation." GF Securities pointed out in its latest research report that, with the improvement of the epidemic and economic recovery, the color cosmetics industry is expected to see a big rebound in the short term. In the long term, color cosmetics products have more room for improvement in terms of both customer base size and customer unit price. GF Securities sees the innovation and growth of head domestic color cosmetics brands. According to the latest earnings report of Intercos, the company's revenue in 2022 was €835.6 million ($922.17 million), up 24% year-on-year. Net profit was €45 million($496.61 billion), a 69.5% jump year-on-year. CEO Renato Semerari stated in the earnings report that such a bright performance by Intercos reflects the overall dynamism of the global color cosmetics market is gradually recovering. The market recovery also means that the competition for cosmetics will become more intense. With nearly 20 years of experience in cosmetics research and development, Li Guangyu from Guangzhou Zaomengying Biotechnology believes that the establishment of a research and development center for makeup brands is to establish their own supply chain. “Everyone would be produced by the same OEM factory, with similar textures and ingredients, so the prices would not differ much. By establishing our own supply chain, we can control costs and establish our own unique advantages in terms of price and product quality, "he said. Xiong Yongpan, Director of Xinrong R&D Center Technology, also expressed a similar viewpoint. “Makeup brands and enterprises are doing research and development one after another because they want to solve the problem of product homogenization. The future growth point of makeup will definitely be in this differentiation, which is whether it can solve some of the pain points of consumers. " Xiong Yongpan believes that if a classic product wants to maintain its vitality, it requires a strong research and development background, and continuous polishing, deepening, optimization and innovation of the product. Makeup companies invest in research and development due to product homogenization and the lack of underlying logical highlights. Therefore, makeup brands and enterprises themselves need to strengthen research and development to empower the brand. Overall, research and development investment is a long-term issue. In the increasingly fierce market competition environment, whether it is skincare, makeup, or other categories, Chinese local cosmetics companies can only build core competitiveness by doing a good job in research and development construction.