Summary of Conference Call Industry Overview - The 2024 cosmetics market is showing a trend towards female-oriented consumption, with the high-end cosmetics segment performing exceptionally well, indicating significant potential for market upgrades [2][4] - Within high-end cosmetics, the base makeup category accounts for over 50% of the market share, making it the largest category, with structural upgrades driving the high-end trend [2][5] Key Insights and Arguments - The high-end base makeup price segment is growing faster than the mass price segment, with average prices across all price ranges on platforms like Tmall increasing [2][5] - Over the past five years, the overall average price of base makeup has consistently risen, with high-end brands on Tmall and Douyin showing a significantly higher market share compared to other categories, indicating a strong demand growth [2][5] - The company has seen a steady increase in its overall market share, with a growth rate from 2019 to 2023 that is only surpassed by USL and NAS. In 2023, the company achieved a 2% market share in the cosmetics sector, ranking 15th overall and 8th among high-end brands [2][6] Company Performance and Strategies - The company's online market share is increasing at a rate that far exceeds other foreign high-end brands, attributed to strong performances in traditional categories such as foundation, cushion, concealer, and highlighter, with these products ranking in the top ten [2][6] - The company is actively expanding into new product lines, such as black cream and skin clothing, which are expected to become new growth points and further solidify its position in the high-end base makeup market [2][6] Product Development Advantages - The company boasts a strong product development capability, led by a team centered around "Teacher Wang" and an artistic committee that deeply understands domestic consumer needs, continuously improving product quality [3][7] - This technical insight and research capability enable the company to launch high-quality products tailored to the characteristics of Chinese consumers, supporting its core competitiveness [3][7] Future Growth Drivers - From an investment perspective, the main drivers for the company's future development are the trend towards high-end base makeup products and the company's multi-faceted product layout strategy [2][8] - These factors together form the company's core competitive advantage, allowing it to maintain market leadership and achieve stable growth [2][8]

Market Overview - The Chinese foundation makeup market is expected to grow steadily, with the market size increasing from 73.19 billion yuan in 2022 to 93.70 billion yuan in 2024, and is projected to exceed 100 billion yuan in 2025, indicating a healthy and active industry phase [1][9][10] - Online sales are dominated by Douyin, which holds a 51.23% share of the online GMV, followed by Taobao with 29.02%, while Pinduoduo has surpassed JD, highlighting the potential of lower-tier markets [1][12][15] Consumer Insights - The core consumer group is aged 31-35, with 37.54% residing in third-tier cities or below; nearly 90% of consumers have skin blemishes, emphasizing the demand for coverage and long-lasting makeup [2][5] - Daily commuting (64.36%) and social gatherings (85.64%) are the primary usage scenarios, with consumers preferring natural makeup (70.24%) and valuing lightweight, breathable, and long-lasting products [2][5] Product Trends - The market is witnessing continuous upgrades in long-lasting makeup technology, with brands like Caitang and Laose achieving 24-hour wear through patented technologies; the trend of combining makeup with skincare is becoming mainstream [2][7] - Scene-specific innovations, such as mini portable products and exclusive solutions for different occasions, are gaining popularity, along with cultural empowerment and IP collaborations enhancing product appeal [2][7] Competitive Landscape - The foundation makeup category is primarily dominated by basic foundation products, with Douyin users showing a strong preference for three-dimensional makeup effects [1][16] - Estee Lauder leads the foundation liquid market on Taobao, while Douyin is dominated by brands like Passional Lover; in the cushion category, YSL has a significant advantage on Taobao, while Douyin is a stronghold for domestic brands like Ruikefu and Laose [1][25][29] Category Performance - The foundation makeup products can be categorized into four main types: base makeup, makeup primer, local touch-up products, and setting products [7] - The basic foundation category holds a dominant position across platforms, with Douyin's local touch-up category accounting for 8.7%, reflecting users' pursuit of a three-dimensional makeup look [1][16]