Total sales of cosmetics on mainstream e-commerce platforms during the 618 promotion achieved double-digit growth. The platform activity period was extended, the gameplay was simplified, and the price competition intensified.

The overall recovery of consumption is weak, but the beauty consumption is still strong. High-quality domestic brands with high cost performance have taken over a lot of consumption downgrading transfer of international high-end brands, combined with the improvement of the company's own R&D ability and brand strength, and have a large development space.

According to Guotai Junan Securities, after experiencing consumption pressure and brand price cuts in 2022, the industry's prosperity index will improve in 2024 as inventory is cleared and normal purchase cycles resume.

As the market growth rate stabilizes and the channel dividend fades, the concentration of the industry continues to increase. From 2020 to 2023, China's top 10 skin care products' market share increased from 31% to 35%.

At the same time, under the dual effect of rising national brand power and the trend of consumer affordable consumption, domestic brands are accelerating their share of the market.

Although the overall growth rate of the cosmetics industry has slowed down, the changes in the pattern are more dramatic than expected. The market share of domestic brands will continue to increase, and it is less likely that Japanese and Korean brands will make a comeback.

As online flow costs increase, live e-commerce flow declines, and channels solidify, the industry's growth rate has slowed. The domestic brand market share has increased, squeezing some of the market share of Japanese and Korean brands. The strategy of domestic brands to create a large single product has become increasingly mature.

The penetration rate of offline beauty and personal care products is expected to accelerate, and the supply will drive demand. The long-term development space of the industry still exists.

Thanks to the triple benefits of lower prices, new channel marketing, and improved technology, the penetration rate of offline beauty and personal care industry is experiencing a period of accelerated growth.

Beauty-related companies:

Shangmei Stock (02145): It owns three well-known brands, Hanshu, Yizhi, and Red Elephant, and has successively launched new brands such as Anmier, Jifang, and Newpage. The company's equity structure is relatively concentrated, and it has a variety of incentive measures such as employee shareholding platforms and restricted stocks. In recent years, the company has launched sub-brands while actively upgrading its main brand. The main brand Hanshu's Douyin channel has significantly increased its volume in 2023, driving both revenue and profits to increase in 2023.

Jǔzi Shēngwù (02367): After the end of the 618 promotion, the two major brands of Jǔzi Shēngwù achieved high growth and consolidated their brand strength. According to Jǔzi Shēngwù's public account, (1) Cefu Beauty: The total online GMV of all channels increased by more than 60%, of which Tmall increased by more than 50%, Douyin increased by more than 65%, Jingdong increased by more than 100%, and VIPSHOP increased by more than 200%. In terms of rankings, Cefu Beauty ranked in the top three in Tmall's domestic beauty products, in the top three in Douyin's e-commerce mid-year promotion skin care products, and in the top five in Jingdong's domestic brand hot sales. Meanwhile, its first flagship store was established offline in Chongqing, which expanded its brand influence both online and offline. (2) Colizen: The total online GMV of all channels increased by more than 100%, of which Tmall increased by more than 70%, Douyin increased by more than 300%, Jingdong increased by more than 200%, and VIPSHOP increased by more than 170%. The brand transformation has achieved results.

Haohai Biotechnology (06826): Join hands with Ouhua Beauty Science and Technology and Eirion in the United States to expand the consumer medical and botulinum toxin fields. Haohai holds 63.64% of Ouhua Beauty Science and Technology's equity for a total of 205 million yuan, and integrates its main products such as EndyMed radio frequency skin instruments, Ray Science and Technology photoelectric laser beauty equipment, and Bioxis tissue fillers into the company's medical beauty product line, extending its medical beauty business to the consumer beauty end.