Core Insights - The performance of domestic beauty companies in China is showing significant divergence, with some achieving remarkable growth while others face declines, indicating a reshaping of the market landscape [1][4][42] Group 1: Company Performance - Proya has become the first domestic beauty company to enter the 10 billion yuan club, with a revenue of 10.778 billion yuan, growing by 21.04% [2] - Other companies like Shangmei and Juzi Biological also reported substantial revenue increases of 62.08% and 57.17% respectively, while Shanghai Jahwa experienced a revenue decline of 13.93% [2][3] - Six beauty companies have revenues exceeding 5 billion yuan, suggesting that this threshold will soon become a significant benchmark for the top 10 domestic beauty brands [1] Group 2: Profitability Trends - Juzi Biological leads in profitability with a profit of 2.062 billion yuan, up 42.06%, while Proya's profit reached 1.552 billion yuan, growing by 30% [3] - In contrast, Shanghai Jahwa reported a loss of 833 million yuan, marking a 266.60% decline, highlighting the stark differences in profitability among companies [3][11] Group 3: Market Dynamics - The current market dynamics indicate a shift towards efficacy-driven products, with companies that successfully launched standout products seeing better performance [4][5] - The competition is intensifying, with new entrants emerging and established brands needing to adapt to changing consumer preferences and market trends [7][30] Group 4: R&D and Strategic Focus - Companies are increasingly focusing on R&D, with most reporting a rise in R&D expenditures, indicating a strategic shift towards innovation and efficacy [20][21] - The trend of acquisitions and investments in technology is becoming a key strategy for companies aiming to enhance market share and scale [23][24] Group 5: Emerging Opportunities - The male skincare market is growing rapidly, presenting new opportunities for brands to capture this segment [36] - The aging population is creating demand for products targeting older consumers, which remains largely untapped [39] - As online sales plateau, brands are shifting focus to offline channels, indicating a potential new battleground for market share [40]

Core Insights - Shiseido Group's Q1 2025 financial results indicate a significant decline in net sales and core operating profit, reflecting ongoing challenges across all regional markets [1][3][7] Financial Performance - The net sales for Q1 2025 were 228.24 billion yen (approximately 11.10 billion RMB), a decrease of 8.5% year-on-year, marking the lowest in four years [3][7] - Core operating profit fell to 8.25 billion yen (approximately 0.40 billion RMB), down 27.2% compared to the previous year [3][7] - The company reported a turnaround in operating profit, achieving 7.20 billion yen (approximately 0.35 billion RMB) compared to a loss of 8.75 billion yen (approximately -0.43 billion RMB) in the same quarter last year [2][3] Regional Market Performance - All regional markets experienced declines, with the Chinese and travel retail sectors down by 12.1% year-on-year [5][21] - The Americas market saw a significant drop of 14.5%, primarily due to the poor performance of the brand Drunk Elephant, which plummeted by 65% [10][13] - In Europe, the decline was less severe at 9.2%, aided by growth in the brands SK-II and NARS [13][21] Brand Performance - Among the Core 3 brands, Shiseido and NARS saw net sales decrease by 7% and 2% respectively, while SK-II was the only brand to show growth at 2% [10][19] - The Next 5 brands had mixed results, with only Elixir showing an increase of 11%, while others experienced declines [10][19] Strategic Adjustments - Shiseido announced a two-year mid-term plan, "Action Plan 2025-2026," focusing on restructuring and enhancing brand performance [24][25] - The company is undergoing leadership changes, particularly in the Americas and travel retail sectors, to address declining sales [24][25] - The merger of travel retail and China business units aims to create a more flexible and consumer-centric business model [24][25]

作为今年经济的重头戏，提振消费开了个好头。 杭州市统计局数据显示，一季度，全市社会消费品零售总额2075亿元，同比增长6.3%，比上年全年加 快3.5个百分点。 从扩大优质产品供给、创新多元化消费场景到优化消费环境，今年以来，一系列提振消费政策措施加速 落地，杭城消费市场提质向好，既有"含金量"又见"含新量"。 新需求新供给两侧发力 明星潮牌GOODEES限定快闪店登陆杭城，首日零售额近百万元；潮玩界"顶流"LABUBU在杭州全国首 展，吸引全城年轻人前来打卡；网红奶茶店阿嚒手作首次来杭州，排单也要等两三个小时……开年以 来，"首发经济"在杭州表现亮眼。 消费者争相打卡首店、观赏首展、欣赏首秀，折射出消费市场的多元化需求。消费供给侧也因势而动， 今年，湖滨步行街、钱江新城CBD等12大空间秀场，将开展不少于200次的首发首秀首展活动，推动形 成"全域联动、场景共生"的首发经济生态圈。 需求牵引供给，供给创造需求，正在杭州消费市场生动演绎—— 顺应消费提质升级，传统消费赛道不断突破。 近"30岁"的松木场农贸市场，历经改造后惊艳回归，充满艺术气息的风格，被居民点评"精致得像个美 术馆"；古荡菜市场"爆改"民国风 ...

Core Viewpoint - The global beauty industry is experiencing a significant shift towards sustainable packaging, with 72% of consumers influenced by packaging design when trying new products, and packaging costs accounting for up to 30% of total product costs in high-end brands [1][2] Group 1: Trends in Sustainable Packaging - Sustainable packaging has become a central theme in the beauty industry, with brands focusing on aesthetics that reflect environmental responsibility [2][4] - The United Nations Environment Programme (UNEP) reports that the cosmetics industry generates over 120 billion pieces of packaging waste annually, highlighting the need for a "green revolution" in packaging [4] - Major beauty brands are adopting recyclable and biodegradable materials, which not only reduce resource dependency but also enhance brand image and market competitiveness [4][6] Group 2: Consumer Willingness to Pay - According to McKinsey, 60% of consumers are willing to pay an additional 10% for sustainable packaging, indicating a growing awareness and preference for environmentally friendly products [7] Group 3: Innovative Business Models - The beauty industry is innovating its business models in response to market changes, with initiatives like packaging recycling services being piloted by retailers such as Watsons in Hong Kong [9] - Brands are engaging consumers through concepts like bottle recycling, refillable products, and zero packaging, which resonate with younger consumers [9][11] Group 4: Future of Sustainable Packaging - The beauty packaging sector in China is undergoing structural adjustments due to rising operational costs, with sustainable packaging being viewed as a new value growth driver rather than a cost center [11]

Summary of the Beauty Industry Conference Call Industry Overview - The conference call focused on the beauty industry, particularly the performance and strategies of Tmall during the 2025 618 shopping festival [1][3]. Key Points and Arguments - **Changes in Sales Strategy**: Tmall has canceled the cross-store discount mechanism for the 2025 618 event, replacing it with direct discounts and smart coupons to stabilize daily sales growth. This shift aims to enhance user growth and public traffic while merchants rely more on technological discounts [1][4]. - **Sales Targets**: Tmall's overall sales target for the 2025 618 event is set at 862 billion yuan, with a projected growth rate of 13.5%. The beauty category aims for a sales target of approximately 13.2 billion yuan, expecting an 18% growth [3][4]. - **Investment in Marketing**: Tmall is investing heavily in marketing, including 20 billion yuan in cash subsidies for Taobao Live and 30 billion yuan in smart coupon subsidies from Alibaba. The total shelf subsidy has increased to 58 billion yuan [1][8][9]. - **Collaboration with Xiaohongshu**: Tmall has partnered with Xiaohongshu, investing 6.2 billion yuan to enhance advertising and direct traffic from Xiaohongshu to Tmall, aiming to increase store visit rates [1][10]. - **Performance of Key Brands**: Foreign brands like L'Oréal and Estée Lauder are seeing higher average order values and growth rates compared to domestic brands. Foreign brands are expected to grow at about 7-8%, while domestic brands are projected to grow at around 35% [2][12][13]. - **Consumer Behavior**: The post-00s demographic shows a willingness to accept price increases of 30-50% and an increase in purchase frequency and category diversity [4][13]. Additional Important Insights - **Focus on Quality and Brand**: The platform's algorithms and policies are increasingly favoring quality products and established brands, with a notable increase in average order values for leading brands [12][13]. - **Performance of Domestic Brands**: Domestic brands like Perlay and Kefu are aggressively marketing, with their advertising revenue growth outpacing GMV growth by 20-30 percentage points [22]. - **Price Strategy**: The overall merchant gross profit is expected to improve, with less aggressive price competition compared to the previous year [12][14]. - **Growth Targets for Specific Brands**: Various domestic brands have set ambitious growth targets for the 618 event, with some brands like Kefu aiming for a 50% growth rate [15][16][17][18][19]. Conclusion The 2025 618 shopping festival is characterized by strategic shifts in sales mechanisms, significant investments in marketing, and a focus on quality and brand reputation. The beauty industry is poised for growth, driven by both domestic and foreign brands adapting to changing consumer behaviors and market dynamics.

Core Viewpoint - The beauty industry is entering a new phase of "quality competition," where consumers demand high efficacy and scientific backing for products, leading to increased costs for independent research and compliance [2][4][20]. Market Demand and Consumer Expectations - Consumers are increasingly seeking products with strong efficacy supported by real foundational research, clear mechanisms of action, and professional evaluation data [4][20]. - The definition of "high quality" has evolved to include a complete research chain and robust quality control capabilities [4][20]. Industry Trends and Brand Strategies - Brands are shifting from a low-price competition model to focusing on a "boutique route," emphasizing the success rate of flagship products [6][20]. - The market is rewarding brands that possess true innovation capabilities and comprehensive research systems, enabling them to achieve high-quality long-term growth [20][27]. Supply Chain Dynamics - Traditional low-cost manufacturing firms are struggling to meet current market demands, leading to a decline in low-end production capacity [8][20]. - Supply chain companies must enhance their comprehensive strength and develop service models that align with current market needs [8][20]. Case Study: BAWI Co., Ltd. - BAWI Co., Ltd. has achieved significant growth, with projected revenue of 785 million yuan (after tax 695 million yuan) in 2024, representing a year-on-year increase of 48.24% [9][19]. - The company has developed a unique service model for full lifecycle quality management, integrating research, testing, production, marketing, and upgrades [11][20]. - BAWI's investment in research and development exceeded 30 million yuan in 2024, reflecting a 9.35% increase, and the company plans to further enhance its R&D capabilities [22][24]. Global Expansion and Market Position - BAWI Co., Ltd. has successfully expanded its overseas market presence, with revenue from international clients growing by 361.52% in 2024 [30]. - The company aims to become a benchmark in the supply chain industry by focusing on knowledge, digitalization, sustainability, and globalization [30][27].

Summary of Conference Call Records Industry Overview - The beauty and personal care industry in China is experiencing significant growth, driven by domestic consumption and the expansion of domestic brands [1][2]. Key Company Insights Shangmei Co., Ltd. (上美股份) - **Sales Growth**: - Tmall sales increased by 30% - JD.com sales grew nearly 70% - Kuaishou and Pinduoduo saw growth between 150% to 200% [1] - **NewPage Performance**: - Q1 revenue reached 160 million, with a 100% growth rate - Expected profit margin improvement for the year [1] - **Product Launches**: - NanBeauty plans to launch mid-to-high-end cosmetics in the second half of the year - Jifang Hair Care is set to expand after obtaining necessary certifications [1] - **Douyin Growth**: - Sales recovery began in April, with an increase in self-broadcasting and improved profit margins [1] - **Marketing Strategy**: - X Peptide aims for a GMV of 1 billion, with new endorsements to enhance marketing effectiveness [1] - Increased brand promotion and collaborations with influencers, including Ding Yuxi as the global ambassador for Han Shu [1] Runben Co., Ltd. (润本股份) - **Revenue Growth**: - Overall revenue increased by approximately 30% in April, with online sales up by about 10% - Significant growth in offline non-platform distribution (toB business) exceeding 50%, particularly in the Sam's Club channel [2] - **Sales Performance**: - Sales in Sam's Club reached over 20 million in April, up from approximately 12 million in March [2] - **Future Projections**: - Anticipates a revenue growth of over 20% in Q2, maintaining a target of 30% growth for both revenue and profit for the first half of the year [2] Marubi Biotechnology Co., Ltd. (丸美生物) - **Q1 Performance**: - Revenue growth of 28% with a net profit increase of 22% [2] - **Annual Targets**: - Aiming for a 32% growth in net profit for the year, referencing the previous year's performance [2] - **Product Sales Forecast**: - Xiaohongbi Eye Cream projected to achieve over 500 million in sales for 2024, representing a 146% growth - Xiaojin Needle expected to reach 350 million in online sales, with a 96% increase, alongside a doubling of offline sales [2] Additional Insights - The emphasis on high-quality ingredients and effective products is becoming a key profitability driver for companies in the beauty sector [3]

Group 1 - The core viewpoint of the article highlights the rise of new consumption brands and the structural opportunities within the consumer sector, which has attracted significant investment attention since the second half of last year [2][3] - The consumer sector is not a single-direction track but encompasses various styles of assets, including cyclical, defensive, and growth categories, with new consumption brands emerging rapidly [2] - The year 2025 is anticipated to be a turning point for the consumer sector, as structural opportunities have begun to surface this year after a prolonged downturn since February 2021 [2] Group 2 - New consumption is defined as new brands rather than new channels or supply chains, with breakthroughs occurring when new consumer habits form or brand influence expands [2] - Fund managers who recognized the trend early have seen substantial returns, with some funds achieving returns of 54.63% and 27.79% year-to-date as of May 8 [3] - The rise of new consumption brands is attributed to the emergence of a younger generation of consumers who prioritize individual expression and are willing to pay a premium for products that align with their tastes [4] Group 3 - The current consumer market is experiencing a new long cycle, driven by younger demographics that value personal satisfaction and have a higher willingness to pay [4] - Companies that demonstrate strong product capabilities in niche markets, such as trendy toys, gold jewelry, and pet products, are expected to seize broader opportunities in the global market [4]

Group 1 - Jin Xing Beer launched two new products: Jin Xing Ice Sugar Hawthorn Chinese Craft Beer and Jin Xing Qing Jiao Chinese Craft Beer, combining unique flavors with traditional elements [4] - Minor Figures introduced Hyper Oat, a new line of oat drinks focusing on both taste and functionality, available in four unique flavors [4] - Birkenstock 1774 launched the Arizona CosNy new product series, featuring minimalist designs and durable materials [4] Group 2 - Luzhou Laojiao unveiled two new products during the Jiao Zhu Festival, emphasizing the integration of traditional liquor culture with modern healthy lifestyles [5] - Yuanqi Forest launched a new plant-based drink called "Slow Boil," developed over two years in collaboration with young consumers [5] - Lay's relaunched its spicy series of potato chips with three levels of spiciness, catering to diverse consumer preferences [7] Group 3 - The first shared store between Lianjia and Luckin Coffee opened, allowing customers to handle real estate transactions while enjoying popular coffee products [10] - Alien Electrolyte Water collaborated with the show "Big Detective" to launch a limited edition product, featuring low-sugar coconut-flavored electrolyte water [10] - Michael Kors opened a limited-time tea and alcohol shop in Hangzhou, showcasing its new spring-summer collection [10] Group 4 - Bobbie launched an organic whole milk infant formula, certified by the USDA, emphasizing quality and safety [22] - Suntory released a limited edition "Master's Dream" beer with an alcohol content of 4.5%, themed around Japan's seasonal changes [23] - Panpan Beverage introduced a new Chenpi water product, combining traditional ingredients for digestive health [24] Group 5 - KIKO Milano appointed Patricia Ho as the new head for the Asia-Pacific region, following a majority stake acquisition by L Catterton [27] - Charlotte Tilbury's founder made a live debut in China, promoting new products in collaboration with influencer Li Jiaqi [30] - Proya became the first beauty group in China to achieve over 10 billion yuan in revenue, reporting a 21.04% year-on-year growth [31]

Core Insights - The domestic beauty industry in China is expected to undergo a significant restructuring by 2025, with companies showing rapid growth driven by strong single-brand performance and a shift in consumer focus towards verified efficacy rather than just ingredient composition [2][10] Revenue Performance - Proya has become the first domestic beauty company to surpass 10 billion yuan in revenue for 2024, achieving 10.779 billion yuan, maintaining its top position [4] - Shangmei Co. has shown the fastest revenue growth, with a 62.1% increase from 4.191 billion yuan in 2023 to 6.793 billion yuan in 2024, rising from sixth to second place among the sample companies [3][4] - Other notable companies include Betaini with 5.736 billion yuan, Shanghai Jahwa with 5.679 billion yuan, and Juzhibio with 5.54 billion yuan, all showing varying degrees of growth [4] Brand Performance - Shangmei's brand Han Shu generated nearly 5.6 billion yuan in 2024, accounting for 82.3% of the group's total revenue, with a growth rate of 73.7% [5] - Juzhibio's brand Kefu Mei achieved 4.54 billion yuan in revenue, representing 82% of its total revenue, with a growth rate of 62.9% [6] Market Trends - The popularity of hyaluronic acid is declining, while "recombinant collagen" is emerging as a lucrative ingredient, reflecting a shift in consumer preferences towards efficacy-driven skincare [7][9] - The market is witnessing a transition from ingredient-focused to efficacy-focused products, with companies like Proya leveraging this trend to capture market share [10][11] R&D and Investment - There is a growing disparity between revenue growth and R&D investment among companies, with Proya's R&D expenditure at only 1.95% of total revenue, the lowest among the sample companies [12] - In contrast, Juzhibio, despite its rapid revenue growth, has a low R&D investment ratio of 1.9%, indicating a potential risk in long-term sustainability [12] Industry Dynamics - The beauty industry is moving towards a phase where product efficacy and R&D capabilities are becoming critical competitive factors, as opposed to relying solely on marketing [13] - The gap in revenue between leading and mid-tier companies is widening, suggesting a trend towards market consolidation and structural transformation within the industry [13]