Shiseido's Drunk Elephant Rumored Out of Chinese Market
- Chaileedo Press
- May 21, 2022
- 4 min read
Shiseido's brand Drunk Elephant was rumored to be going out of business and was being liquidated. Drunk Elephant denied this rumor. It can be seen that Drunk Elephant’s flagship store on the Chinese e-commerce platform Taobao is operating normally.
Recently, Shiseido's brand Drunk Elephant was rumored to be going out of business and was being liquidated. Subsequently, Shiseido's brand Drunk Elephant released a statement in response to the recent rumors of "Drunk Elephant liquidating" and "closing down" spreading on the online platform.
The statement said that Drunk Elephant has never authorized operations such as liquidation and that the relevant actions on the Chinese e-commerce platform Taobao and other social media are all unofficially authorized violations. In addition, the brand will reserve the right to take legal measures to defend its rights against the release of false information such as "liquidating" and "closing down" by various accounts from different platforms.
Drunk Elephant also reminded us that the only official store of Drunk Elephant - DrunkElephant overseas flagship store, is operating in an orderly manner. Consumers who need to buy can reach Tmall International's official only formal channel to buy experience.
The so-called "Drunk Elephant Liquidating" incident started in January this year. At that time, the official public number of Drunk Elephant issued an article, saying that the sale of online channels will be suspended to carry out the upgrade of the store. According to Drunk Elephant's official Tmall flagship store customer service response, the store reopened its Tmall overseas flagship store on March 31.
In response, Shiseido China had replied that the Drunk Elephant China market is indeed in the period of dealer replacement, according to the platform regulations, the store needs to suspend sales for 1-2 months, and said that thereafter Drunk Elephant's online channel operation will still be handed over to the agent to operate. It is understood that the current agent is Lian E-commerce Services limited.
The oops of this event has once again raised the industry's concern about Drunk Elephant as a representative brand of clean skin care.
Founded in the United States in 2012, Drunk Elephant had sales of nearly $100 million in 2018. It entered Sephora in Hong Kong, China. In September 2019, it went online on the Tmall platform and was officially acquired by Shiseido in October of the same year. Shiseido's President and CEO once called "Drunk Elephant" "one of the fastest growing skincare brands in history.
At the time, talking about the acquisition of Drunk Elephant for 6 billion yuan(nearly $900 million), Shiseido had pointed out that Drunk Elephant could leverage Shiseido's industrial resources and global platform to further expand the existing American market, as well as quickly expand to new markets such as Europe and Asia.
At the end of 2019, China General Manager Su Jiani of Drunk Elephant had told the media that "contemporary consumers are concerned about cost effectiveness, demand high efficacy, and demand precision skin care, which are all opportunities for us."
In 2020, Drunk Elephant launched the Vitamin F Electrolytic Ionic Goodnight Mask, which will be available on its website and Sephora from January 1, 2020. In the Chinese market, Drunk Elephant has also launched a new product trial campaign.
In 2021, Drunk Elephant made its mainland China offline debut at the 4th Fair, showcasing its skincare and toiletries line of products.
This year, Drunk Elephant's first quarter sales dropped 32% year-over-year due to the impact of the epidemic and other factors. Currently, Drunk Elephant’s best-selling product in Tmall's overseas flagship store is Vitamin B5 priced at $60/50ml, which is currently sold by Drunk Elephant mainly by way of brand self-live streaming.
Due to the instability of the global epidemic, resulting in many beauty brands are affected to varying degrees, some are even unable to support normal operations and announced the closure of stores or withdrawal from the Chinese market.
Estee Lauder's makeup brand BECCA announced its official closure in September last year, its highlighters had been its star product. Due to the epidemic and its marketing strategy, the brand had to stop production to stop losses.
In addition, Amore Pacific's brand, Innisfree, has made strategic adjustments to the Chinese market, and the person in charge said that Innisfree stores will continue to be optimized in the future, closing 170 stores in China to 140. Previously, another brand of Amore Pacific, Etude House, completely closed all offline stores in the Chinese market in March 2021, and another Korean makeup giant, LG's Face Shop, also closed all offline stores in the Chinese market at the end of 2018.
According to the retail sales data of consumer goods released by the National Bureau of Statistics on May 16, 2022, the total retail sales of cosmetics from January to April 2022 saw the first negative growth in nearly five years, down 22.3% year-on-year to $3.2 billion.
Most beauty groups' earnings reports cite the first quarter downturn in China as the reason for the factory closures, logistics shutdowns, and store closures due to the epidemic in Shanghai that began in March.
But as people get used to the normalized epidemic prevention and control measures again and the normal rhythm of production and life resumes, brands have reason to be optimistic about future growth expectations in China.
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