An interpretation of the new track of beauty care in 2023

# Headline Creation Challenge #

Analyze track trends and growth opportunities, and plan brand development strategies.

Author | Gan Zhou Hui

Editor | Qiu Yueye

Under the changing environment at home and abroad, despite many uncertain factors in the macro environment, the beauty care industry has made considerable growth in the past five years. According to Euromonitor statistics, from 2016 to 2021, the retail sales of beauty care industry in China increased from 339.1 billion yuan to 568.6 billion yuan, with a compound annual growth rate of 10.89%.

In recent years,The main consumer groups are younger, the importance of online media is improved, consumption upgrading and market sinking coexist.It has become the three common characteristics of the domestic consumer industry, and the rapid growth of the beauty care industry is inseparable from the comprehensive grasp and flexible application of these three common characteristics. However, starting from young people, online media and sinking market, the anchoring increment has long been an open law, and the growth rate brought by it has obviously slowed down or even been weak. Finding the new increment has become one of the most important topics in the beauty care industry at present.

Recently, Growth Black Box released the "2023 Beauty Personal Care Track Report" (hereinafter referred to as the "Report") to explore the three major tracks with new additions in the beauty personal care industry-Functional skin care, domestic makeup, high-end hair care, beauty network combined with the report, based on three high-growth tracks, in order to provide reference for more brands.

Key track one: functional skin care

1.1 trend-large and small brands have entered the market, and domestic brands have broken overseas monopoly.

As a new track, the market scale of functional skin care has increased year by year and maintained rapid growth. From 2016 to 2021, it increased from 6.9 billion yuan to 28.3 billion yuan. Since 2017, the market growth rate of functional skin care in China has always been higher than the overall market growth rate of skin care products.

The rapid growth of functional skin care is the result of multiple factors. From the demand side, excessive and unscientific skin care methods, the rise of medical beauty, the intensification of environmental pollution, and the radiation of electronic screens will all bring skin problems, which will increase the number of people with sensitive muscles, thus creating a demand for functional skin care; From the supply side, the improvement of domestic research and development level of skin care products, the perfection of supply chain and the maturity of market education have provided consumers with more suitable skin solutions.

While the market volume is expanding rapidly, domestic brands are also rising gradually. From 2016 to 2021, the market share of domestic functional skin care brands increased from 17.8% to 31.4%, and the market share of functional skin care brand Top10 decreased from 87.8% to 70.9%. Domestic brands are breaking the monopoly of overseas brands, and functional skin care tracks are beginning to show a trend of localization.

It is worth noting that in 2016, the top three domestic functional skin care products were European and American cosmeceutical brands. Since 2019, Winona has successfully won the first market share, and Fuerjia has also jumped to the third market share. This situation has been maintained until 2021.

1.2 Growth opportunities-The track is increasingly subdivided, and the composition potential is huge.

According to the "Report", from the demand scene, due to humid climate, dryness or environmental pollution, staying up late, heavy work pressure and other reasons, skin demands such as anti-acne, anti-aging, anti-wrinkle and skin repair are outstanding. Based on this,Understand the needs of consumers more deeply, highlight the ingredients, raw materials and efficacy of products, and further refine the pertinence of products to solve skin problems.Become the first opportunity point of functional skin care track.

From the marketing point of view,Strengthen the scientific research endorsement of the brand, and at the same time use the celebrity effect to share with amateurs to gain the trust of consumers.Become the second opportunity point of functional skin care track.

Judging from consumers’ cognition of domestic brands and overseas brands,New domestic brands grasp the lipstick effect, choose a lower price band to cut into the track and develop new consumers.It has become the third opportunity point of the skin care track.

1.3 brand strategy-building a brand moat

Taking Xiulike as an example, firstly, expand the category around the function and build a product pyramid matrix with the essence as the mainstay; Secondly, join hands with Tmall Super Brand Day to create its "professional, scientific and authoritative" brand image; Finally, build a private domain of WeChat, attach importance to one-to-one communication, enhance customer service, and improve the unit price and repurchase rate of products.

According to the Report, since January 2022, the total GMV of Sherrico’s private domain is about 4-5 million yuan, and the ROI of private domain can reach 1:5-1:6, which is higher than that of Tmall’s 1:3. In the past year, the unit price of private domain customers has also increased from 1300 yuan to 1800 yuan, an increase of about 40%, which is much higher than the unit price of Tmall flagship store in 2021 of 914 yuan.

Winona, on the other hand, expands the product matrix around the needs of a specific group of people, and based on the differences between platforms and stores, formulates different operation plans, and gradually achieves transformation through long-term operation and maintenance while ensuring the community activity.

According to the financial report in the first half of 2022, Winona’s private domain revenue was 153 million yuan, accounting for 9.41% of the total revenue, of which the counter service platform started to operate in 2017 accounted for the bulk, and the GMV reached 100 million yuan. The overall GMV of the official mall was small, at the level of 10 million. It is reported that the unit price and repurchase rate of Winona’s private customers exceed the Tmall channel by 30%.

Ximuyuan, founded in 2019, is expanding around the main ingredients to form a product matrix; In content marketing, based on the brand value, convey the brand concept. For example, choose Pu Shu as the brand spokesperson, cooperate with big coffee bloggers such as Luo Wangyu, and plant grass for products.

Track 2: Domestic makeup

2.1 trend-overseas brands dominate, domestic products join the battle.

According to the data of iResearch, base makeup has long occupied more than half of the market size of the entire beauty industry, and it is the largest subdivision track, with a considerable growth rate. From 2016 to 2021, the growth rate continuously outperformed the beauty market, and the growth rate in 2018 was even as high as 28.1%. Even in 2021, which is full of uncertainty, the domestic makeup market still reaches 41.5 billion yuan, and it is expected to exceed 60 billion yuan in five years.

Base makeup products usually include liquid foundation, powder cake, powder cream, powder paste, isolation cream, pre-makeup milk, concealer, BB cream /CC cream, air cushion, loose powder, fixed makeup and so on. According to the GMV data of Tmall base cosmetics in 2021, the sales of liquid foundation are far ahead of other single products.

Taking liquid foundation as an example, domestic brands have initially demonstrated their potential. In 2021, the GMV of Tmall domestic liquid foundation brand accounted for 22.56% of the total GMV of this category, and the growth rate of domestic brands was 42.31%, much higher than the industry average growth rate of 20.74%.

From the perspective of concentration, the market share of head brands in the domestic liquid foundation market is relatively high. From 2022 to now, the market share of Top10 brands is 57.7%, most of which are overseas brands, and the market share of domestic brands is only 12.35%. Therefore, there is still a large penetration space for domestic liquid foundation.

2.2 growth opportunities-domestic makeup surprise mid-to high-end market

According to the data of Tmall GMV in 2021, in terms of the distribution of price bands, the high-end liquid foundation market is growing rapidly, followed by the medium and high-end liquid foundation market, while the low-price band shows obvious negative growth.

It can be seen that consumers show a strong tendency to high-end, high-end brands and products. However, domestic brands are relatively weak at high-end and high-end tracks. Therefore, domestic brands have more room for development in the future.

With the change of aesthetic trend, consumers also put forward higher requirements for products. Liquid foundation should not only be flawless, but also light and natural. It should also "nourish the skin" while becoming beautiful, and also have good makeup holding ability.

Based on the characteristics of new demands of consumers,Strengthen the investment and iteration of ingredients, raw materials and R&D process to improve product functions.Become the first opportunity point of the makeup track.

In the makeup market, the growth rate of high-end liquid foundation dominated by overseas brands is over 50%, and domestic makeup has also emerged.For cutting-edge domestic brands, choose the bottom makeup track to cut in.It is the second opportunity to assault the makeup track.

2.3 brand strategy-to create oriental makeup more suitable for Asians.

Taking Hua Xizi as an example, five strategic systems are comprehensively used to build the brand of Guofeng beauty cosmetics. First, insist on user co-creation and designer co-creation to empower product innovation. Hua Xizi recruited 200,000 product experience officers, collected user feedback and cooperated with Hangzhou Academy of Fine Arts in packaging design, which greatly guaranteed the success rate of product innovation. The second is to iterate over large items and firmly bind the customer base; The third is to implant national characteristics and enhance cultural heritage; The fourth is to build a self-broadcasting team in Tik Tok and grasp new channels; The fifth is to lay out private domain operations, improve services and improve fans’ repurchase rate.

Brand Fang Li, which focuses on makeup powder and makeup liquid foundation, focuses on product strength and wins by research and development. It is reported that Fang Li’s current main expense budget is invested in product research and development, and less in marketing. On the research and development level, Fang Li collected a large number of skin data, and studied the differences in skin quality, genetic structure and various skin characteristics between Eurasian people, and built a theoretical system of foundation makeup. Fang Li also spent two years upgrading the large single product soft mist makeup liquid foundation to version 2.0.

Track 3: High-end hair care

3.1 trend-overall stable, but the high-end track is growing rapidly.

According to the Report, the hair care market in China increased from 49.6 billion yuan to 65 billion yuan from 2016 to 2021, but the overall growth rate was relatively gentle, with CAGR of only 5.58%.

In terms of concentration, in 2021, the market share of CR15 brand in the hair care market was 71.1%, of which China brand only accounted for 11.9%. It can be seen that the hair care market in China is highly concentrated and dominated by overseas brands.

It is worth noting that the high-end hair care market in China is growing rapidly. According to the sales data of Tmall, the GMV of high-end hair care market in China increased from 551 million yuan to 3.477 billion yuan from 2017 to 2021. In the year from May 2021 to June 2022, the sales of Tmall’s high-end hair care increased by 67%, which was much higher than the overall market growth rate of hair care by 48%.

According to Euromonitor data, the market penetration rate of high-end hair care in China has increased from 10.1% in 2016 to 29.5% in 2021, and it has quickly become one of the top in the world, and the growth rate far exceeds that of developed countries such as the United States, France and Japan.

The phenomenon that the hair care market is dominated by overseas brands is still significant in high-end tracks. According to the statistics of Tmall, the high-end beauty hair care GMV TOP10 brand is dominated by European brands, and the cutting-edge professional beauty hair care brands Morocco Oil, Grow Gorgeous and FORVIL Windsor Forest have entered the TOP10 list.

3.2 Growth opportunities-accelerated entry of overseas high-end brands

In the hair care track, consumers generally recognize overseas brands more. Under the general trend that consumers pay more and more attention to hair care, the favored brands and products also show a high-end trend. In addition, the concept of "using the same shampoo product for a long time is not friendly to the scalp" is gradually accepted. Most consumers have low loyalty to a single brand, high willingness to try new products, and overseas high-end brands with dominant reputation, efficacy and ingredients are often more likely to gain favor.

Based on the comparison of consumers’ cognition of domestic and overseas brands,Overseas high-end hair care brands have great room for expansion in China market.

On the demand side, high-end hair care consumers pay attention to more detailed protection steps. Based on the change of the demand side, the second opportunity point of hair care track appears-Comply with the trend of refinement, make great efforts in product composition and technology content, and develop products for different links according to shampoo steps, so as to improve the user experience in the process of shampoo protection and enrich product efficacy.

3.3 brand strategy-how overseas brands can quickly occupy the domestic market and educate consumers’ minds.

Take the French hair care brand FORVIL Windsor Forest as an example, it entered China at the end of 2019 and cut into the China market with its high-end hair mask category. The caviar bottle hair mask set is the most important single product at present, and its core competitiveness lies in "differentiation".

The first is the differentiation of ideas. Windsor Forest put forward the brand concept of "redefining hair care by skin care" when it entered the China market, implemented the product plan according to the skin care steps, and differentiated day care, week care and special care products considering the needs of different hair groups.

The second is technological differentiation. Windsor Forest has added black technology to its hair mask products. According to the product usage information, it can be washed in 5 seconds, which is different from other brands of hair mask products.

The third is composition differentiation. Windsor Forest added sturgeon caviar extract, black spore truffle extract, etc. to the products, and selected 8 precious skin care essence ingredients for blending.

Fourth, experience differentiation. Caviar ampoule hair mask creates product differentiation with its luxurious packaging design and ceremonial use experience.

In addition, Windsor Forest alsoHighlight brand positioning with R&D and cultural endorsement.Windsor forest brand joined Bristol Myers Squibb, a biochemical pharmaceutical giant, in 1969, and gained strong medical and scientific support. In terms of cultural endorsement, Windsor Forest is operated by Tianrui Group of France, which has close cooperation with the French Embassy in China. Official endorsement has increased its influence and recognition in the market.

In terms of private domain operation, Windsor began to lay out WeChat private domain from the second half of 2021, and deeply cultivated consumers’ minds. It is understood that there are more than 100,000 members in the private domain of Windsor Forest, among which there are about 30,000 members in the community of Tik Tok Platform. In the future, the brand side plans to divert members from Tik Tok to WeChat private domain.

L’ Oreal’s high-end professional hair care brand Kashi is passedHair quality diagnosis service+product portfolio recommendation to meet the individual needs of consumers.Kardashi launched the H5/ applet of professional hair quality accurate detection in Tmall flagship store and WeChat WeChat official account. Consumers can obtain the exclusive customized hair quality diagnosis report through question and answer, and the system will grab the most suitable products and salon care for consumers from Kardashi’s comprehensive product line for recommendation according to personalized professional hair quality analysis.

In addition, Kashi also passedIntegral mechanism and membership activities increase the stickiness of B-end /C-end users.Kashi’s main customers are B-end (professional hairdressing salons) and C-end users, so Kashi will carry out more targeted membership operations.

For B-end customers, Kashi’s products are printed with exclusive QR codes, and customers can get points by scanning the codes, and the points can be exchanged for prizes such as iPhone. Kashi will also regularly organize B-end users to carry out offline tourism activities to enhance interaction with B-end users.

C-end consumers can get points by scanning the product-specific QR code, and the points can be exchanged for high-end hairdressing and hair care packages. Kashi will also organize offline exclusive meetings and invite TOP100 consumers to participate from time to time, such as inviting Michelin chefs to make food on the spot, providing experience activities such as flower arranging courses and wearing courses.

It is reported that Kashi has reached cooperation with 1,500 high-end hairdressing salons, which is also an important word-of-mouth marketing channel. Through a series of consumer activities, Kashi has accumulated 20 million directly accessible private domain users.


In recent years, the beauty care industry has been looking for new additions, and the three major tracks of functional skin care, makeup and hair care have performed brilliantly.

In the functional skin care track, the overall market scale of domestic skin care products is increasing year by year, and the growth rate of functional skin care market is always higher than the average growth rate of the market. The market structure changes rapidly, but at present, the market concentration is relatively high, and it is still dominated by head brands. Under this pattern, big and small brands have their own different offensive and defensive strategies.

In the domestic makeup track, the domestic beauty market has grown considerably, and the growth rate of the makeup market continues to outperform the broader market. Although international brands still dominate the base makeup market, domestic cutting-edge brands have created base makeup products that are more suitable for Asian skin types, and domestic high-end base makeup products are still blank areas, which will have more incremental space in the future.

In the high-end hair care track, the demand of the domestic hair care market is showing a trend of high-end and refinement. The presence of international brands has adapted to this demand, while continuing to educate consumers mentally and promoting the development and development of the high-end hair care market.

The Report summarizes some growth strategies that can be used for reference by gaining insight into the development trends of the three major tracks and further relying on outstanding brands.

First, in terms of product strength, brands pay attention to the expansion of sub-categories, or take their own characteristics as the origin or the needs of consumer groups as the basis, while the growth of cutting-edge brands usually relies on the iteration of large single products to stabilize and broaden their own markets by constantly improving existing large single products.

Second, in terms of marketing power, even though there are mature marketing strategies to promote transformation, there are still many brands that pay attention to the construction of users’ minds, and start from cultural endorsement, content marketing and other aspects to improve their brand image and make a good layout for their long-term development.

Third, in terms of operational ability, as a relatively new brand growth strategy, the layout of WeChat ecological private domain and the construction of member operation system are still lacking in maturity, but their importance is becoming higher and higher. Almost all brands with considerable growth attach great importance to private domain operation. Building a brand membership system in the private domain can not only reach users more conveniently, improve their stickiness, but also precipitate traffic and reduce the cost of obtaining customers. It can also specify its own operating rules and break the rules of the public domain platform.

Generally speaking, under the superimposed influence of uncertain factors such as macro-environment, consumers’ offline consumption frequency becomes lower, and more consumer demand is transferred to online, which also gives birth to more subdivided demand, including requiring products to solve problems more pertinently, and providing more intimate and temperature-sensitive services. Therefore, brands need to improve online content output, listen to users’ voices, and keep the gameplay iterative, so as to gain the trust of consumers and achieve new growth in brand revenue.

In a word, there are still high-potential tracks in the beauty care industry. If the brand chooses the right track, supplemented by the right strategy, there is still a chance to maintain a high growth trend in the medium and long term.