Summary of the Beauty Industry Conference Call Industry Overview - The beauty industry is experiencing intense competition, particularly during the 2025 Double Eleven shopping festival, where consumer voting power has increased to 60%, putting pressure on brands, especially domestic and unlisted ones [1][2][9] - A total of 88 brands participated in negotiations for 166 SKUs, with beauty products accounting for nearly 70% of the total [2][4] Key Insights and Arguments - Domestic brands performed exceptionally well during the 2025 Double Eleven, actively participating and offering significant discounts to enhance visibility [1][4] - International brands such as Estée Lauder and LVMH only had limited participation, with Make Up For Ever being the only brand from LVMH, while mid-to-high-end brands like L'Oréal Paris also participated [4] - The strategy for beauty brands included a combination of classic products and bestsellers, with deeper discounts offered. Some international brands adopted a "no price increase" strategy, with discounts going as low as 40% [1][5] - Domestic brands introduced new products with "no return" mechanisms to attract new users, while international brands launched IP collaboration products to appeal to younger consumers [1][5] Competitive Strategies - Beauty brands are enhancing competitiveness through product upgrades, maintaining stable prices, and innovation backed by evidence [6][7] - Notable examples include domestic brands like 彩棠, which upgraded its contour palette five times in six years, and 完美日记, which adapted to market demands by participating in major promotions [8] - Brands are also leveraging IP collaborations and unique packaging designs to attract younger demographics, such as 欧莱雅's collaboration with 熊猫花花 for a small eye cream [5][7] Market Trends - The beauty market is shifting towards a buyer's market, with increased consumer power and a greater presence of domestic brands [3][9] - New emerging brands are actively seeking exposure, with many participating in the "All Girls Offer" event, showcasing the overall operational capabilities of domestic brands [8] Risks and Challenges - The beauty market faces risks from macroeconomic fluctuations affecting consumer purchasing power and intense competition [10] - Brands must quickly respond to market changes, understand consumer preferences, and adapt to new consumption methods to remain competitive [10]

Core Insights - The beauty market in China is experiencing a competitive landscape with a notable shift towards domestic brands, as evidenced by the growth in sales during the "Double Eleven" shopping festival, particularly in live-streaming sales [1][3][5] - Domestic brands are increasingly gaining market share, with many top domestic beauty companies reporting revenue and profit growth, indicating a robust performance against a backdrop of overall market stagnation [5][6][7] Market Trends - The retail sales growth of cosmetics in China is slowing, with a reported year-on-year increase of only 2.9% in the first half of 2025, which is below the overall retail sales growth of 5.0% [3] - The domestic beauty market is seeing a shift from a focus on marketing to an emphasis on product quality and service, as brands like 毛戈平 (Mao Geping) and 薇诺娜 (Winona) adapt their strategies to enhance consumer engagement [5][6][7] Brand Performance - During the "Double Eleven" pre-sale, domestic brand 珀莱雅 (Proya) topped the beauty sales chart, marking its second consecutive year in this position, with an increasing number of domestic brands appearing in the rankings [5][6] - Among the top ten domestic beauty companies, eight reported revenue and profit growth, with notable increases from 上美股份 (Shangmei), 巨子生物 (Juzi), and 毛戈平, which saw revenue growth rates of 17.3%, 22.5%, and 31.3% respectively [5][6] Channel Strategy - The trend of integrating online and offline sales channels is becoming prominent, with brands like 薇诺娜 expanding their offline presence to enhance customer engagement and product visibility [6][7] - 毛戈平 has established a significant offline presence with a large team of professional beauty consultants, which supports its high-end brand positioning and customer service [6][7] International Expansion - The recent cultural export initiative "巴黎合伙人" (Paris Partner) showcased domestic brands in Paris, highlighting the potential for Chinese beauty brands to expand internationally while promoting Chinese aesthetics [8][9] - Despite challenges in penetrating Western markets, there is a growing recognition of the need for Chinese brands to adapt their products and marketing strategies to meet local consumer preferences [10][12][15] Future Outlook - The success of domestic brands in international markets will depend on their ability to leverage local insights and adapt their offerings, as demonstrated by the positive reception of products backed by scientific research [14][15] - The collaboration between Chinese brands and international platforms like TikTok may pave the way for replicating the success of live-streaming e-commerce in overseas markets [16]

Summary of Conference Call on Cosmetics Industry and E-commerce Trends Industry Overview - The conference focuses on the cosmetics industry, particularly the performance of live-streaming sales during major shopping events like "618" and "Double Eleven" [1][2][3]. Key Insights and Arguments - **Sales Growth Projections**: - The sales for the "618" event are expected to reach between 70 to 80 billion yuan in 2025, while "Double Eleven" sales are projected to decline slightly from 150 billion yuan in 2023 to around 120 billion yuan in 2024 [1][2]. - **Core Product Categories**: - Beauty products continue to dominate live-stream sales, contributing 55% to 60% of total sales, although their share has decreased from nearly 70% in 2021. Other categories like home textiles and apparel are gaining traction, indicating a diversification trend [1][2][3]. - **Market Share of Domestic vs. International Brands**: - The market share of domestic brands in the beauty sector has been increasing, while international brands have seen a decline. By 2025, the share of international brands is expected to drop to around 45%, marking the first time it falls below 50% [1][4]. - **Consumer Preferences**: - Younger consumers are less influenced by international brands and are more focused on emotional factors and cost-effectiveness. This shift is contributing to the rise of domestic brands [1][5]. - **Discount Strategies**: - The discount rates for international brands have stabilized around 50% from 2024 to 2025, while domestic brands are deepening their pricing strategies. The competition has led to a convergence in discount levels between domestic and international brands [1][9]. Additional Important Insights - **Impact of Live-streaming Events**: - The show "All Girls' Offer" significantly increased viewership by 25% and improved conversion rates from 4.5% to 5.5% during the "Double Eleven" event [1][16][17]. - **Diverse Product Focus for 2025**: - The emphasis for the upcoming "Double Eleven" will be on health products, with a simplification of promotional rules to enhance consumer understanding and participation [1][18][19]. - **Sales Goals**: - The overall growth target for live-streaming sales is set at 6% to 8%, with the beauty category aiming for approximately 7% growth [1][23]. - **Emerging Trends in Ingredients**: - New ingredients like PDRN (salmon extract) are gaining attention, although they have not yet reached a phenomenon level in sales [1][21]. - **Selection Criteria for New Products**: - The selection logic for promoting new brands or products in live-streaming focuses on sales data, historical performance, and consumer feedback, with product quality being the primary consideration [1][22]. This summary encapsulates the essential points discussed in the conference call regarding the cosmetics industry and the evolving landscape of e-commerce, particularly through live-streaming platforms.

Core Viewpoint - The rise of domestic beauty brands in China is breaking the monopoly of international brands, with the IPO of Plant Doctor marking a significant milestone in this trend [1][12]. Group 1: Company Overview - Plant Doctor has been established since 1994, focusing on high-altitude plant skincare products, which has allowed it to carve out a unique market position [3]. - The brand's core positioning is "High-altitude plants, pure beauty," emphasizing its commitment to Chinese ingredients and brand identity [3]. Group 2: Product Development - Plant Doctor has developed a competitive product matrix, including various high-altitude plant series such as "Dendrobium Tightening and Anti-wrinkle" and "Cordyceps Revitalizing Luxury," catering to diverse consumer needs [3]. - The company offers a wide range of products, including lotions, creams, serums, and masks, showcasing strong product innovation capabilities [3]. Group 3: Financial Performance - The company's revenue from 2022 to 2024 is projected to be 2.12 billion, 2.15 billion, and 2.16 billion yuan, respectively, with net profit increasing from 158 million to 243 million yuan, reflecting a compound annual growth rate of 24% [5]. - This financial performance underscores Plant Doctor's solid market position and growth potential, providing a strong foundation for its IPO [5]. Group 4: Channel Strategy - Plant Doctor has established a robust online and offline channel strategy, with 4,328 retail stores by the end of 2024, enhancing consumer access and service experience [6]. - The brand has received recognition as a leading single-brand skincare store globally, further boosting its IPO prospects [6]. Group 5: Online Presence - The company has actively developed its online presence through platforms like JD, Tmall, Douyin, and Kuaishou, which has significantly contributed to its market share [8]. - Plant Doctor was recognized as the leading single-brand cosmetics store in China by 2024, enhancing its brand strength [8]. Group 6: Research and Development - Plant Doctor emphasizes R&D, with a dual approach of independent and collaborative research, and has established a research center with the Kunming Institute of Botany [10]. - The company holds 212 patents, including 59 invention patents, and has consistently invested in R&D, accounting for approximately 3% of its revenue [10]. Group 7: IPO Fund Utilization - The 998 million yuan raised from the IPO will be allocated to marketing, brand building, R&D center construction, production technology upgrades, and information system enhancements [12]. - These investments are expected to strengthen the company's brand influence, R&D capabilities, and operational efficiency, fueling future growth [12].

Core Viewpoint - The beauty market in the first half of 2025 shows a mixed performance, with a historical high in retail sales but a decline in certain segments, indicating a competitive and structurally adjusting market landscape [2][5][29]. Retail Performance - The retail sales of cosmetics in China reached 229.1 billion yuan in the first half of 2025, marking a year-on-year growth of 2.9%, which is lower than the overall retail growth of 5% [2][6]. - In June 2025, the retail sales of cosmetics experienced a 2.3% year-on-year decline, marking the first month of decline this year [2]. Online Sales Dynamics - Online beauty sales exceeded 300 billion yuan in the first half of 2025, with a year-on-year growth of 8.6% and a transaction volume increase of over 10% [5][9]. - The five major e-commerce platforms (Taobao, JD, Douyin, Kuaishou, Pinduoduo) achieved a total transaction amount of 3210.75 million yuan, with a year-on-year growth of 8.59% [9][10]. Category Performance - Skincare remains the largest category with a transaction amount of 1971.82 million yuan, accounting for 64.4% of total online beauty sales, showing growth of 8.17% in transaction value [12][13]. - Makeup sales increased by 15.26% to 551.81 million yuan, while hair care emerged as a strong performer with a 20.67% increase in sales [15][29]. - Oral care saw a slight increase of 2.49% in transaction value but a decline in transaction volume, indicating a trend towards premiumization [15][19]. Brand Landscape - The top three brands in the beauty sector are L'Oréal, Proya, and Han Shu, with domestic brands making significant inroads but still trailing behind international brands in market share [21][23]. - In the makeup category, domestic brands captured 11 out of the top 20 positions, with notable performances from brands like Mao Geping and Huaxizi [26]. Market Trends - The rise of men's beauty products and refined personal care categories indicates a shift in consumer preferences, with significant growth in men's skincare and hair care [20][29]. - The overall market is experiencing structural adjustments, with brands needing to adapt to changing consumer demands and competitive pressures [29].

Core Insights - The luxury skincare brands Helena and La Mer are facing significant challenges in reputation and sales during the 618 shopping festival, with Helena's pricing error leading to order cancellations and La Mer criticized for its simplistic packaging [3][4][7] - Despite high sales rankings on platforms like Tmall and Douyin, both brands are experiencing declining sales in China, as indicated by L'Oréal's financial reports showing a downturn in their luxury cosmetics division [7][8] - The high-end beauty market is increasingly dominated by foreign brands, while domestic brands are gaining traction, leading to a shift in consumer preferences and loyalty [8][10] Sales Performance and Market Trends - Helena and La Mer ranked first and fourth respectively in the Douyin pre-sale rankings, but their performance is overshadowed by growing consumer dissatisfaction [7] - L'Oréal's financial data indicates that Helena's luxury cosmetics segment is underperforming, with sales declines for brands like Helena and Lancôme in China [8] - The luxury beauty market is experiencing a dual decline in reputation and sales, with brands like La Prairie also reporting significant drops in revenue [8] Consumer Behavior and Brand Strategy - High-value consumers are increasingly turning to medical beauty and professional skincare brands, leading to a decline in loyalty towards traditional luxury brands [19][30] - Brands are attempting to target middle-tier consumers by collaborating with influencers and creating engaging content, but face challenges in retaining loyalty from high-end consumers [12][15] - The shift in consumer focus towards ingredient efficacy and transparency is undermining the traditional storytelling approach of luxury brands [17][38] Pricing and Distribution Challenges - The pricing strategies of Helena and La Mer have become chaotic, with significant discounts available through duty-free channels, undermining their premium image [21][22] - Internal issues within Estée Lauder's operations have led to price wars between online and offline channels, further complicating brand positioning [22][23] - Reports of unauthorized discounting and product quality issues are contributing to consumer dissatisfaction and brand erosion [28][30] Brand Management and Strategic Direction - The strategic focus of Helena and La Mer is becoming marginalized within their parent companies, impacting their ability to innovate and respond to market changes [32][34] - Estée Lauder's China division has historically lacked decision-making autonomy, which has hindered its ability to adapt to local market dynamics [32][33] - The shift in focus towards more affordable brands within L'Oréal's portfolio indicates a potential long-term decline for ultra-premium brands like Helena [34][37]

Core Viewpoint - The luxury skincare brands Helena and La Mer are facing significant challenges in reputation and sales during the 618 shopping festival, highlighting a structural crisis in the high-end beauty market in China [3][4][22]. Group 1: Sales Performance and Market Trends - Helena and La Mer ranked high in sales during the 618 festival, with Helena at TOP1 and La Mer at TOP4 on Douyin, and ranked 8th and 6th respectively on Tmall [3]. - Despite strong sales, both brands are experiencing a decline in reputation and sales, with Helena's high-end cosmetics division showing the lowest growth rate in L'Oréal's financial report for 2024 [4]. - La Mer's parent company, Estée Lauder, reported a 7% and 12% year-on-year revenue decline in Q3 and Q4 of 2024, attributing it to decreased sales of La Mer and Estée Lauder [4]. Group 2: Consumer Behavior Changes - High-income consumers are increasingly turning to medical beauty treatments, while lower-income consumers seek affordable alternatives, leading to a perception of ultra-high-end beauty products as "intelligence tax" [5][6]. - Brands are strategically abandoning entry-level consumers and focusing on high-value and mid-tier consumers, often resulting in price increases [9]. - The shift in consumer loyalty is evident, with many former loyal customers of high-end brands now exploring more effective and targeted products from medical beauty brands [12]. Group 3: Pricing and Quality Issues - The pricing structure of luxury brands has become chaotic, with significant discounts available through duty-free channels, undermining the premium image of brands like La Mer and Helena [14][15]. - There are reports of quality control issues, with consumers expressing dissatisfaction over product quality and packaging, which has led to a decline in brand loyalty [17]. - The management of offline sales channels has been criticized for allowing practices like private group buying, which further complicates the pricing and service quality [15][16]. Group 4: Strategic Challenges - The strategic positioning of Helena and La Mer in the Chinese market is becoming marginalized, with limited decision-making power for local management affecting product innovation and service quality [19][20]. - Estée Lauder's focus has shifted towards more profitable segments, leaving Helena and La Mer at a disadvantage in terms of resource allocation and market attention [21]. - The overall trend indicates a potential end to the era of high-priced foreign luxury brands relying on storytelling for premium pricing, as consumers increasingly demand efficacy and value [22].