YSG: Efficacy Skincare is Gaining Momentum

With the advent of the post-epidemic era, Chinese consumers all the more highlight a healthy lifestyle, indicating a rising demand for products concerning skin health and skin problems.

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A year's plan starts with spring, and the industry changes at a fast clip. What new trends will emerge in 2023? Where do the new growth points lie in the market? Based on the upcoming 6th Chinese Cosmetics Trend Conference on February 13, CHAILEEDO interviews the founders and industry personages of 50 + well-known companies at home and abroad to get the cosmetics industry off to a flying start with a fresh view. CHAILEEDO invited Huang Jinfeng, the founder, chairman and CEO of YSG, to share with us the cosmetic trends in China.

CHAILEEDO: What changes within the industry have impressed you over the past year?

Huang Jinfeng: In terms of external factors, the Chinese beauty industry have shifted the past high growth to a slow one, with supply chain, logistics and offline business facing unprecedented challenges. Amid compounding competition, international beauty groups has channeled greater effort into boosting investment and promotion for a bigger share of the market. These factors have brought along mounting challenges to the beauty industry at home, which is still in its infancy.

In terms of the industry, despite a slowed overall growth rate of the makeup market, efficacy skincare and other specialized sectors are gaining momentum. In contrast, the development of skin care products also brought tests to the ability of R&D, brand building and channel deployment. Therefore, the epidemic catapulted the cosmetics industry to a quality-oriented era of brand cultivation over the last year. Compared with the previous eyeball-seeking strategy, the attention paid to R&D is on the rise remarkably, elevating the industry to a new stage featured by "internal strength" competition.

CHAILEEDO: For 2023, do you have any plans for YSG's development to share? What's your future exploration and innovation be like in the beauty industry?

Huang Jinfeng: Over the past five years, Chinese beauty products has seen an explosive growth, therefore YSG seized on the dividend of product type and such high traffic to realize rapid growth. Due to the heavy toll taken from the pandemic and other factors, the Chinese consumer market today is quite a challenging place. At the departure point of the new-five-year, our team started a "Second Startup", which takes brand building as the centerpiece and gathers momentum for entering a new stage with the aim of an out-and-out transformation. Looking forward, the company will continue to uphold strategic transformation, dual driver of R&D and brand with a focus on product innovation and channel optimization. Rather than an immediate profit, we emphasize more on long-term, healthy and sustainable development.

CHAILEEDO :Where do you see the Chinese beauty market's trend going in the year ahead? 

Huang Jinfeng: We have every confidence in the Chinese economy and market. And we will step up our patience as well to be an explorer-cum-doer of unveiling the “beauty” of China.

With the advent of the post-epidemic era, Chinese consumers all the more highlight a healthy lifestyle, indicating a rising demand for products concerning skin health and skin problems. Skin care refinement, the pursuit of use effect, and more concern for product component are becoming the young generation's holy grail of skin care pursuit. In this regard, more diversified and group-oriented consumption demands like sensitive skin repair are emerging. This will open up more windows for innovative brands.

I believe that in the future, more beauty brands will target Chinese skin characteristics and problems, integrate their own, external and even the global scientific research strength to launch more effective cosmetic products of high quality, a topic enabling huge potential for innovation.

CHAILEEDO: Since gaining traffic is getting more expensive. What do you think is the new breaking point for beauty brands?

Huang Jinfeng: In recent years, due to the slow growth of the demand for beauty products and the decreasing traffic dividend, the beauty industry has gradually changed from a dividend-driven industry to one driven by product and brand, which shows that the industry is now calling for a competition of all-round capability.

Any era has its own share of dividends, it's a no-brainer to seize the dividend to enlarge business quickly, but as the times develop, the traffic dividend will disappear. For a long-term and stable road ahead, companies must always be mindful of possible risks and ponder on the next step upon disappearing dividend. Therefore, YSG initiated a "Second Startup", carrying out a channel-based overhaul and furthering the channel efficiency. So facing the decline of the traffic dividend, we materialize the development of resilience and sustainable growth.