Everyone has a love of beauty. With the gradual increase of people's disposable income, the "face economy" has a rich survival soil, extending to the capital market, medical beauty, ophthalmology, dentistry and other tracks have been sought after, and the market has also given quite generous valuations.

As intriguing as it is, these tracks are not friendly to consumers' wallets. In terms of the most popular orthodontic and implant business in dentistry, the price per customer is often 20,000 to 30,000 or even 40,000 to 50,000. For ordinary people, it is not a sum of money that can be taken out easily. The high cost makes the "freedom of teeth" of ordinary people become an extravagant hope, but on the contrary, this has aroused the author's attention to the future development of "oral care".

Recently, Weimeizi, a brand of oral care, presented its form to the Hong Kong Stock Exchange. What is the prospect of oral care? How good is Wei Meizi?

Hundreds of billions of markets propped up by Generation Z

Following the commercial law of big water raising big fish, it is necessary to see if oral care is a wide enough track.

According to Frost Sullivan, China's oral care market grew from 49.6 billion yuan in 2016 to 88.4 billion yuan in 2020, with an annualized compound growth rate of 15.5 percent. It is expected to reach 152.2 billion yuan in 2025, which means that the growth rate will remain above 11% in the next four years.

From the demand side, oral care is the core driving force of the rapid growth of a hundreds of billions of golden track, in addition to consumers' continuous pursuit of beauty, the awakening of health awareness is another key factor.

According to the 2021 White Paper on Tmall's Insight into the consumption trend of Oral Care, the number of oral patients in China reached 700 million as early as 2019, about half of the total population. The 2021 National Health Insight report released by Dr. clove shows that oral problems have become one of the TOP5 troubling national health.

National health is an important guarantee of comprehensive national strength and sustainable development, so there is also corresponding support in top-level design. The outline of the 2030 healthy China Plan clearly points out that the implementation of a healthy China needs to be supported by a lifestyle of "three subtractions and three health", and the top priority among the "three health" is "oral health".

The policy is good to superimpose the awakening of public awareness and jointly promote the rapid development of the oral care industry, but compared with the development level of oral care in foreign developed countries, there is still a large gap in our country. From the perspective of electric toothbrushes alone, China's permeability has increased from 1.5% in 2016 to 8.7% in 2020, but there is still plenty of room for improvement compared with 50% in the United States and 30% in Japan.

Continue to explore, to a large extent, the room for improvement here comes from the continuous expansion of the concept of oral care. More than a decade ago, people might just need "one toothbrush + one toothpaste". But today, oral care has broken through the traditional boundaries of time and space, and great changes have taken place in the shape of old products. Electric toothbrushes, mouthwash, dental floss, dental beauty instruments and other functions have come to the fore.

This reflects the change in the preferences of the main consumers. The young consumers represented by Generation Z grow up with the Internet, have a higher degree of acceptance of new things than their parents, and tend to be more quality, personalized and refined.

Extended to the field of oral care, under the guidance of scientific nursing concept, Generation Z is more likely to accept the view that perfect oral care requires enough categories of products to achieve "fine" care. Therefore, the future oral care market will be more diversified, new product forms and concepts will continue to emerge, who can grasp the psychology of young consumer groups and achieve continuous self-iteration in order to enjoy the market development dividend with greater probability.

Create a leading position in the market segment

From this point of view, it is not difficult to understand why Weimeizi can achieve today's leading position in the oral care market.

As a consumer enterprise growing up with Generation Z, the company has grasped the trend of market segmentation. Whether it is high-end, digital, or young and refined, Weimeizi's recent development strategy is highly consistent with the market direction, building a multi-product portfolio to provide full-cycle oral health solutions, focusing on young groups, thanks to this, the company has successfully established a leading position in a number of sub-product categories in China's oral care market.

According to Frost Sullivan, Weimeizi ranks fourth in the Chinese oral care market with a market share of 5.3 per cent in terms of retail sales in 2020, with a CR5 of 33.9 per cent. In the more concentrated market segments, Weimeizi has more obvious advantages. In the child oral care market, where CR5 is 61.1 per cent, Vimizi ranks first (in terms of retail sales in 2020) with a market share of 20.4 per cent. In the whitening toothpaste market, where CR5 is 45.0%, the company also ranks first, with a market share of 11.3% (in terms of retail sales in 2020).

The forward-looking strategic deployment has created a leading position in the market segment for Weimeizi, which has also fed the company's business. High-growth and diversified product categories can reduce volatility caused by a single category and help achieve more stable growth.

According to Frost Sullivan, Weimeizi has the largest number of sub-product categories compared with the other five major oral care companies in China. Multi-dimensional oral care products such as children's toothpaste toothbrush, enzyme toothpaste, mouthwash, electric toothbrush, oral spray, toothpaste, dental floss, etc., enable Weimeizi to diversify its sources of income at the same time, it can also achieve sustainable growth at different stages of the brand life cycle.

By providing a full portfolio of products, Weimeizi can enable consumers to purchase different brands of products for their children, spouses or other family members at different stages of life, achieving full life cycle coverage for consumers, thus building strong brand stickiness. In this way, Wei Meizi grasped the changing trend of the market in the structural change of the oral care industry, and successfully created the brand image of the company's one-stop oral care.

What does Wei Meizi rely on?

It can also be confirmed by the data. Weimeizi achieved revenue of 1.23 billion yuan in the first nine months of 2021, an increase of 14.78% compared with the same period last year, and has recovered from the impact of the epidemic. At the same time, profitability is also growing steadily, with gross profit margin rising from 53.8% to 62.8%. In addition, the net cash income from Weimeizi's operating activities in 2019, 2020 and the nine months ended 30 September 2020 and 2021 was 87.772 million yuan, 199 million yuan, 123 million yuan and 135 million yuan respectively, and the operating cash flow remained robust.

Wei Meizi can achieve such a result, with its brand, channel long-term polishing is inseparable.

In the field of oral care, it is difficult for consumers to establish full trust in a new brand in a short period of time, and the brand advantage that has occupied consumers' minds is obvious, which sets a high threshold for new participants to enter.

The two core brands of Weimeizi, "Saky" and "SakyKids", are already national oral care brands with high popularity and influence. With the rise of the wave of domestic products, its high-end, young and professional brand image has been recognized by Z-generation consumers.

The well-recognized brand is a strong driving force for the company's continued growth, and a comprehensive and wide range of channels is a key for the company to maintain its brand strength.

At present, Weimeizi has established an omni-channel sales and distribution network both online and offline. As of September 30, 2021, the company has 32 self-run online stores and 48 online dealers' online stores on Tmall, JD.com, Pinduoduo and other mainstream e-commerce platforms, as well as other emerging online channels such as Douyin and Xiaohongshu.

Offline channels, the company has 32 major customers and 602 offline dealer networks covering all-round retail formats such as hypermarkets, supermarket chains, personal care stores, mother and baby stores, convenience stores, grocery stores and gas stations.

The broad channel network, on the one hand, enables Weimeizi to shop goods faster, on the other hand, it can obtain timely consumer feedback and the latest developments in the market, so that the company can adjust its strategy in time, so as to better grasp the market direction. In order to develop product development and marketing strategies.

In addition to the channel, product power is another key for the company to maintain brand barriers.This is also the underlying logic of Wei Meizi's insistence on innovative research and development.

The R & D team led by Chen Minshan, who has 28 years of experience in the oral care industry, has extensive expertise in materials science, food science, electronic engineering and other disciplines, and 68% of the team has a master's degree. Up to now, the company has 112 patents, including 45 invention patents, 15 practical patents and 52 design patents.

By adopting a market-oriented R & D approach, Weimeizi's R & D team and sales department work closely together to analyze and formulate R & D direction according to the market data feedback from the channel, so as to ensure the efficiency of its R & D.

At present, a variety of oral care product evaluation models have been established in the laboratory, including whitening evaluation model, fresh breath evaluation model, enamel restoration model and toothbrush physical evaluation model, which can effectively analyze the market competition and grasp the product design direction.

Based on this model, Weimeizi has successfully launched a series of popular and leading products, such as enzyme toothpaste with biological whitening technology, electric toothbrush with sound wave technology, and so on. At present, the company has 49 new or upgraded products under research and development, which also provides a guarantee for follow-up performance growth.

Adequate financial guarantee is the key to expanding the commercial territory.Wei Meizi raised funds this time, can further expand the existing advantages. Looking to the future, after the successful listing in Hong Kong, Weimeizi's growth ability is expected to be further strengthened, and the promotion of follow-up brands, products and channels is worthy of continuous attention.

Conclusion

With both health and appearance, oral care has become a new pursuit of young people, and the hundreds of billions of consumer market has given the head national brand the biggest market dividend.

Centering on consumer pain points, long-term R & D investment makes Weimeizi have the ability to iteratively upgrade and innovate products in time with product strength and innovation, constantly meet the new needs generated by consumers, enhance consumer experience, and form brand advantages. supplemented by an expanding channel network, its growth is worth looking forward to. After its listing, Weimeizi is expected to continue to invest for a long time to explore more professional and quality products, so as to provide more perfect solutions to solve Chinese oral health problems.