Recently, a number of overseas beauty companies have released financial reports. Combined with the tripartite data, we believe that the industry continues the trend of high-end efficacy, innovative new products promote growth, and the role of R & D is prominent; The channels are differentiated, and the recovery of offline business tests the brand's Omni channel business layout ability. We believe that domestic brands with R & D technical strength and omni-channel operation ability are expected to expand market share and improve profits by virtue of their advantages, and there is still broad growth space for domestic products.
The increase of unit price promotes the growth of industry scale, and high-end and efficiency are the consumption trend. The financial reports of many overseas beauty companies highlight the contribution of high-end brands to performance growth. L'Oreal's high-end cosmetics division surpassed Volkswagen's cosmetics division for the first time in 21 years and became the largest department of the group. The increase in the proportion of high-end cosmetics promoted the increase of the group's gross profit and net profit margin; The active cosmetics division increased by 30% year-on-year, with strong growth worldwide. At the same time, according to tripartite data, China's beauty consumption continues to upgrade. Magic mirror data shows that the unit price of tmall's skin care category is + 12% year-on-year, and the unit price of color makeup category is + 14% year-on-year. The growth of tmall's beauty industry is mainly driven by the increase of commodity unit price. We believe that with the continuous growth of China's economic level, beauty consumption has upgraded to a long-term trend, which is mainly reflected in several aspects: 1) cosmetics consumers tend to upgrade from buying mass brand products to high-end / efficacy brand products. 2) Beauty products have advanced from low price category to high price category. (21) the growth rate of the essence is negative, and the category of perfume is increased. 3) Classic brands continue to upgrade, and consumers buy products of the same brand for iterative replacement. At the same time, in order to maintain brand positioning and cope with the pressure brought by the rise of raw materials and inflation, more international brands such as Estee Lauder began to raise prices to improve profits.
New products promote growth, and the role of R & D technology is prominent. The financial reports of each company highlight the importance of R & D technology to the success and performance of new products. For example, L'Oreal's efficacy skin care brand lifuquan increased by more than 100% year-on-year, and effaclar and lipikar series, which revolutionized the treatment of eczema, made outstanding contributions. L'Oreal will increase the application of artificial intelligence, and more overseas companies will set up R & D centers in China to strengthen R & D strategic deployment.
Online business continued to grow, and e-commerce channels showed differentiation. The financial reports of overseas companies emphasized the growth of e-commerce and the contribution of "double 11". L'Oreal's global e-commerce channels increased by 25.7% year-on-year. Three party data show that Tmall traffic dividends are challenged, tiktok develops rapidly, and platform features are strengthened: Tmall's high-end and effective brands are growing rapidly. The layout of tiktok is relatively high, and has a leading edge in operation. JD's top ten lists are mostly foreign high-end brands, and the platform search attribute is more suitable for brands with strong consumer awareness.
Tourism retail has recovered, and overseas brands have accelerated the layout of offline and duty-free channels. L'Oreal expects that in 2021, the business of physical stores will be + 13% year-on-year, and the tourism retail will be + 22% year-on-year. Hainan tax exemption will promote the performance. Estee Lauder's physical retail sales in China have increased significantly, and the tax-free channels have made outstanding contributions. With the recovery of the epidemic, the optimization of brand offline experience and the coordination of omni-channel promotion mechanism are more important, which will test the omni-channel layout ability of brands.
Investment suggestion: the trend of high-end and efficacy of beauty makeup continues. Under the background of traffic differentiation, brands need to pay more attention to R & D and omni-channel operation ability. Under the background of stricter supervision, domestic brands benefit. Recommend Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , Bloomage Biotechnology Corporation Limited(688363) , Proya Cosmetics Co.Ltd(603605) , Shanghai Jahwa United Co.Ltd(600315) , and focus on Lushang Health Industry Development Co.Ltd(600223) , Syoung Group Co.Ltd(300740) , Guangdong Marubi Biotechnology Co.Ltd(603983) .
Risk tips: the risk of intensified competition in the industry, the risk of repeated outbreaks, and the upward pressure on cost prices
