Shanghai Jahwa(SH:600315)2025-10-09 02:39Summary of Key Points from the Conference Call on China Cosmetics Industry Industry Overview - The conference focused on the cosmetics industry in China, particularly the upcoming Double 11 Shopping Festival, which runs from October 9 to November 14, 2025. This event is expected to account for over 60% of the fourth quarter's online Gross Merchandise Value (GMV) and approximately 20% of the full year's GMV based on historical averages [1][2]. Growth Expectations - GMV Growth Targets: - Taobao/Tmall and Douyin are targeting year-over-year GMV growth of 20-25% and over 40%, respectively. The cosmetics segment is expected to grow at a slower rate of around 20% for Taobao/Tmall and approximately 30% for Douyin [2][12]. - Actual sales growth may exceed expectations due to a decline in return rates, with Tmall's return rate expected to drop from 15-20% last year to below 15%, and Douyin's from 35-40% to about 25% [2][15]. Promotional Strategies - Extended Promotion Period: - The Double 11 event will be the longest ever, lasting 31-57 days compared to 29-35 days last year. Douyin, JD, and Tmall have extended their promotion periods by 22, 8, and 2 days, respectively [3][14]. - Discount Mechanisms: - Platforms will focus on instant discounts (e.g., 15% off for all products) rather than spend-based discounts, leading to lower final purchase prices [3][15]. Brand Performance Insights - Local Brands: - Local brands such as KANS and Shanghai Jahwa are expected to outperform, with Jahwa's Herborist brand potentially achieving triple-digit growth off a low base [5][17]. - MAOGEPING is projected to deliver 40-50% growth, supported by a strong product matrix and omni-channel strategy [17]. - MNC Brands: - Premium multinational brands like Lancome and Estee Lauder are expected to maintain solid growth of 10-30%, while mass brands such as L'Oreal Paris and Olay may struggle with growth rates below 10% [5][17]. Market Dynamics - KOL Influence: - Top-tier Key Opinion Leaders (KOLs) are losing market share to mid and lower-tier KOLs, who are offering better terms to brands. The expert noted that top-tier KOLs are setting lower targets for livestreaming [7][15]. - Merchant Support: - Tmall/Taobao is expected to favor multinational corporations (MNCs) due to its focus on 88VIP users, while Douyin allocates traffic based on brands demonstrating high incremental growth [6][15]. Conclusion - The upcoming Double 11 Shopping Festival is poised to be a significant event for the cosmetics industry in China, with expectations of strong growth driven by extended promotional periods, aggressive pricing strategies, and a shift in KOL dynamics. Local brands are likely to outperform their multinational counterparts, reflecting changing consumer preferences and market conditions [1][5][17].