Summary of Conference Call Records Industry Overview - The beauty e-commerce sector is experiencing a shift, with domestic beauty brands showing a slight decline during the 2025 Double Eleven shopping festival, while international brands are on the rise, contrary to previous trends. This change is primarily attributed to the impact of live streaming models, necessitating brands to adjust their strategies to adapt to market changes [1][20]. Key Insights and Arguments - **Advertising Costs and ROI**: - Douyin platform's advertising expenses are rapidly increasing, with beauty line ad allocation reaching 30%-40%. However, the return on investment (ROI) is relatively low, averaging between 2.2 and 2.3. Brands are advised to optimize their advertising strategies by collaborating with mid-tier influencers to reduce costs [1][4]. - The average ROI for short videos is around 1.5, contributing to an overall decline in ROI despite stable advertising expenses [4]. - **Impact of Streaming Tax Policy**: - The streaming tax policy significantly affects small and medium-sized businesses, with strategies suggested including reducing advertising expenses, improving store conversion rates, and shifting focus to mid-tier influencers [1][5][9]. - For larger companies, internal management can help distribute the tax burden by associating low-tax categories with higher ones [5][9]. - **Market Performance by Platform**: - During the 2025 Double Eleven, Pinduoduo's GMV grew by 20%-30%, aided by supportive policies such as waiving fees for beauty category merchants and covering substantial subsidies [1][33]. - JD.com saw a growth rate of approximately 20%, while the beauty segment on Douyin experienced a slight decline due to intense competition and the influence of top-tier influencers [2][41]. - **Changes in Influencer Dynamics**: - The share of transactions from mid-tier influencers on Douyin has increased to 35%-45%, while top-tier influencers' share has decreased to around 20%. This shift allows brands to lower advertising costs and improve overall profit margins [1][10][12]. - **Commission and Advertising Fee Variations**: - Advertising fee rates for beauty products vary across platforms, with Tmall generally maintaining rates between 20%-25%, while Pinduoduo keeps it under 5% [14][33]. - The average customer price for beauty products varies, with Douyin at 330-340 RMB, Tmall at around 250 RMB, and Pinduoduo generally under 200 RMB [40]. Other Important Insights - **Instant Retail Growth**: - Instant retail has led to a 20% increase in search browsing volume on Tmall, with food being the most significantly growing category. However, health products are less suited for instant retail due to high unit prices and extensive offline coverage [3][29]. - **Future Advertising Strategy**: - The company plans to increase investment in Tmall while reducing expenses on Douyin, focusing on new products and commercial collaborations [47][48]. - **Tax Policy Effects on Small Businesses**: - New tax policies are expected to heavily impact small businesses, particularly in the beauty sector, where initial investment costs may rise significantly, hindering their market growth [13]. - **Pinduoduo's Support Policies**: - Pinduoduo has introduced merchant support policies, including waiving platform fees and covering subsidies, which benefit top brands significantly [33][37]. This summary encapsulates the key points from the conference call, highlighting the current state of the beauty e-commerce industry, advertising strategies, and the impact of new policies on market dynamics.