The Zhitong Finance App learned that Cinda Securities released a research report saying that according to recent e-commerce data, the growth rate of domestic cosmetics brands continues to be superior to that of foreign investors, and the logic of increasing the market share of leading domestic brands is expected to continue to be implemented. Focus on the leading cosmetics group, which has alpha opportunities. From a category perspective, public opinion on nuclear sewage may give domestic brands an opportunity to seize the share of Japanese sunscreen. If there is a steady increase in the number of large sunscreen products and a steady release of new sunscreen products, it is expected to contribute a considerable increase to the brand. Focus on Bethany (300957.SZ) and Perea (603605.SH), which already have a high market share in the field of domestic sunscreen, and Freda (600223.SH), which has released various new sunscreen products since then.

Cinda Securities's views are as follows:

Foreign-funded sunscreen previously occupied the core market for domestic sunscreen. Among them, Japanese sunscreen received market recognition for its refreshing feeling of use, and achieved a good market share. However, due to the continued influence of Japanese brand public opinion, consumer preference for Japanese brands may decline. Combined with the continuous progress of domestic sunscreen products in terms of raw materials and formulations, domestic sunscreen will usher in development opportunities.

In 2022, China's sunscreen market is about 15.8 billion yuan, and there is considerable room for growth.

According to Euromonitor data, China's sunscreen market reached 15.8 billion yuan in 2022. Due to a temporary decline due to the epidemic, the compound growth rate was 9.7% from 2022 to 2027, and the growth momentum is still significant. In 2022, Japanese & European brands still have market share advantages, but there is a clear trend of increasing the share of domestic goods. Judging from the market share of the top 50 brands in China's sunscreen market in 2022, Japanese/European and American brands ranked at the top, with market share reaching 22.7%/22.0% respectively; judging from the market share trend, since 2019, the overall market share of Japanese, European and American sunscreen has also shown a downward trend, and the market share of domestic sunscreen products has also accelerated, growing from 10.3% in 2019 to 16.8% in 2022. The growth trend is clear. As domestic beauty brand recognition increases, domestic sunscreen is expected to continue to occupy more market share.

Domestic and foreign brands are actively laying out sunscreen tracks, and clear positioning+differentiated marketing is expected to help products break through.

Consumers continue to pay more attention to sunscreen. Consumers have extended from simply avoiding sunburn and tanning at specific times to daily “anti-aging” needs to slow down photoaging, and the need to use sunscreen cosmetics has gradually been recognized by the market. According to beauty training data, the number of sunscreen filings in 2023 is significantly higher than in 2022. It is expected that more sunscreen products will enter the market this year. Judging from the products that have been on the market since 24, most products emphasize richer product benefits on the basis of high sunscreen power (SPF50&PA+++), such as: waterproof and sweatproof (maintain a high level of sun protection after bathing), can be used on sensitive skin, firming, anti-wrinkle, anti-oxidation, freckle removal, etc. The clear positioning of products with differentiated marketing strategies may help new products break through successfully.

Looking at product positioning: Sunscreen products are positioned closer to stronger sun protection, more comfortable and convenient, or multi-dimensional skin care.

① Stronger sun protection: The product promotes full-band compound sunscreen with waterproof sweat/friction technology to achieve long-lasting strong sun protection in multiple scenes. ② More convenient and comfortable: Some consumers do not demand too much sun protection, but they pay more attention to the comfort and convenience of using sunscreen. Under the trend of daily use of sunscreen, the feeling of use and ease of washing and removal will also become important factors for consumers to consider when choosing sunscreen products. ③ Multi-dimensional skincare benefits: Skin care ingredients are superimposed on basic sunscreen benefits to achieve whitening, freckle removal, anti-wrinkle, and firming effects. According to beauty training data, the number of registered sunscreen products claiming to be suitable for sensitive skin/freckle removal and whitening effects increased markedly in 2023.

Looking at marketing strategies: marketing ability helps products break the circle.

In addition to supporting product strength in research and development, the Mistine brand has also carried out many product promotion activities and spokesperson cooperation to maintain the brand's exposure to increase the brand's market share from 0.2% in 2014 to 7.3% in 2022; Perea also raised consumer awareness of new shield protection and sunscreen products through marketing events, and continued to pay attention to product sales in the future.

Advances in technology of domestic brands and accurate grasping of consumer trends will help domestic sunscreen products occupy more market share.

Currently, domestic brands have a keen insight into market demand. Coupled with the continuous improvement of the technical research and development capabilities of tourist raw materials and the brands themselves, domestic sunscreen products also have product power and consumer recognition that are not inferior to large foreign sunscreen products. At the same time, the marketing and operation capabilities of leading domestic brands are also being strengthened, which is expected to jointly promote the continued increase in the share of domestic sunscreen brands in the domestic sunscreen market.

Risk factors: Competition on segmented tracks intensifies, and new product approval falls short of expectations.