The Zhitong Finance App learned that Haitong International released a research report saying that from October 8 to November 11, sales of Douyin Double 11 cosmetics increased 69.01% year on year from October 8 to November 11, with sales in the skincare/makeup category increasing 76.81%/61.44% year on year respectively; in addition, according to Gaotian Intelligence's public account statistics, the Taotian platform's GMV growth rate in the Double 11 online channel was 25.8%, accounting for 50.6% of the entire platform. Overall, the 3Q24 retail sub-sectors are expected to continue to differentiate, with leading beauty and personal care and cross-border e-commerce companies expected to continue their steady growth in the first half of the year. Optimistic about beauty care as a procyclical high-quality variety, evaluate the bottom, and grasp the leading cost performance ratio. The sector's early valuation correction was sufficient, but the fundamentals are still quite resilient.

Haitong International's main views are as follows:

Platform: Douyin rushed to achieve high growth, increasing the share of commodity cards; GMV of the Taotian platform contributed more than 50%, and brand co-building created incremental growth

According to statistics from Rubik's Cube, Douyin Double 11 cosmetics sales increased 69.01% year on year from October 8 to November 11. Among them, sales in the skincare/makeup category increased 76.81%/61.44% year on year, respectively, and consumption in the skincare category increased to a record high. Looking at segmented channels, the share of commodity card sales increased, from 2.0% and 3.7% in '22 to 24.6% and 31.4% in '24, respectively.

According to the Taotian Intelligence official account, the GMV growth rate for beauty on the Double 11 online channel was 25.8%, accounting for 50.6% of all platforms. In the Tmall skincare category, 45 brands each surpassed 100 million in sales, 23 brands exceeded 0.2 billion, and 2 brands exceeded 1 billion. The sales growth of the Taotian platform has benefited from its strategy of “returning to brand value orientation”. In terms of marketing strategy, Tmall FMCG upgraded its “daily sales+big promotion” dual-core operation system to improve the long-term operation efficiency of the brand; in terms of quality control, it guaranteed excellent brand qualifications and adopted both low prices and quality; in terms of new product creation, the platform invested 3 times the resources of previous years to create popular new products and super products. The number of new products sold in TOP1000 during Tmall Shuang11 reached 395 new products, an increase of 72% over last year. Among them, 17 super products such as Fumei Collagen Stick and Helena Black Bandage Face Cream broke 100 million yuan.

Category: Nursing kits grew 91.74% in October, and demand for anti-aging increased

According to Rubik's Cube data, in terms of skin care: medical dressing sales increased 593.08% year on year during the Double 11 period, with TOP5 brands such as Shierjia, Kefumei, and Chuangfukang contributing more than 75% of the market share; facial skincare category grew 76.71% year over year, accounting for 90.96% of sales share, eye care category grew 82.09%, accounting for 5.49%. Under the facial skin care category, care sets were popular, with sales share of 28.55%; according to October data, combined with liquid essence, lotion/face cream categories, etc. Most selling points focus on “firming, repairing, and anti-wrinkle” . In terms of makeup/perfume: During the Double 11 period, facial makeup grew by 66.81%, accounting for 62.22%, and lip makeup grew by 84.29%, accounting for 17.61%.

Brand: Foreign investment has performed strongly throughout the cycle, and Douyin's domestic product ranking is getting higher

According to the official account of Qingyan Intelligence, the ratio of the number of Chinese and domestic brands in the full sales cycle of the platform was 8:2. while international brands are leading the rise, they are also increasing the Tmall platform. For example, judging from Li Jiaqi's live broadcast double 11 pre-sale products, the number of links to products such as L'Oréal, Estée Lauder, Helena, Kiehl's, La Roche-Posay, Shiseido, and Skin Key have all increased. According to the official account of Cosmetics News, several foreign brands such as Aquamarine Mysteries, Helena, and SK-II increased by more than 50% year-on-year.

Judging from previous promotions, the TOP4 brands on the Tmall platform remained stable. Among them, Perea ranked in the TOP1 in 2024 from the first pre-sale until November 11. Among Douyin's official sales TOP10, the ratio of the number of foreign and domestic brands was 5:5 (7:3 in 23), and Natsutang and Winona moved up the rankings; Perea and Han Shu remained stable in TOP2, but Fumei's ranking jumped all the way from Double 11 in '23 to Double 11 in '24. Douyin e-commerce launched a special campaign on the “Chinese Ingredients” theme during the Double 11 period. From October 8 to November 3, 16 Douyin e-commerce domestic beauty brands had sales exceeding 100 million, and sales of over 130 individual products exceeded 10 million; the turnover of domestic skincare brands increased by more than 40% year-on-year compared to last year. Among brands with a turnover of more than one million, more than 50 brands increased by more than 100% year over year, and more than 20 brands grew by more than 200%; more than 40 domestic beauty specials broke the 10 million turnover.

Key Company Report: Domestic goods growth momentum is strong, leading players are bursting out

Perea ranked first in Tmall and Douyin Beauty, and the Caitang, Off& Relax brands achieved a leap in multi-platform turnover, with the Off& Relax multi-platform growth rate doubled; Winona, a subsidiary of Bethany, relied on its omni-channel strategy to obtain the TOP10 online Tmall beauty and the top 1 offline pharmacy chain skincare brand. Winona and Aikman have all created popular products in various categories; Shangmei shares have maintained impressive sales growth in multiple platforms and multi-category expansion strategies. The three major brands Han Shu, NEWPAGE, and Anmin Youmin have maintained impressive growth. The omni-channel growth rates were 44% and 238%, respectively, 154% became an important driver of performance growth; Giazi Biotech's online omni-channel GMV increased by 80% year over year. Apart from Collagen Stick ranking in the TOP1 of the Tmall and Douyin Essentials category, Focus Series, Order Series, and Tons of Water and Milk all performed well.

Investment advice: Restoring consumer expectations and starting a new round of optimization changes to focus on marginal changes in cosmetics

Overall, it is expected that various sub-sectors of 3Q24 retail will continue to differentiate. Among them, leading beauty and personal care and cross-border e-commerce companies are expected to continue to grow steadily in the first half of the year, while supermarkets and jewelry are expected to remain under some pressure due to terminal demand. Wait until subsequent policies are strengthened, and the business inflection point is gradually restored as consumption expectations and consumption capacity are gradually restored. Optimistic about beauty care as a procyclical high-quality variety, evaluate the bottom, and grasp the leading cost performance ratio. The sector's early valuation correction was sufficient, but the fundamentals are still quite resilient. The long-term logic of low penetration in medicine and aesthetics & strong adhesiveness remains unchanged. The main line of the rise of domestic cosmetics is clear, and the potential is improving &; cost-effective brands lead the growth rate.

Aspect of the target

A shares: Commodity Mall (600415.SH), Yonghui Supermarket (601933.SH), Anke Innovation (300866.SZ), Lao Fengxiang (600612.SH), focusing on Chongqing Department Store (), Dashang (Dubai), Wangfujing (), Perea (), Aimeike (300896.SZ), Dengkang Dental (001328.SZ), Huakai Yibai (300592.SZ), Servei Era (301381. 600729.SH 600694.SH 600859.SH 603605.SH SZ).

H shares: Mingchuang Premium (09896), Giant Biotech (02367), Alibaba-SW (09988), Meituan-W (03690), and follow Laosou Gold (06181).

Risk warning: Diversion of new business formats; increased industry competition; uncertainty in regulatory policies.