March 8 is the fifth anniversary of the establishment of huaxizi, a domestic brand. On March 4, huaxizi announced its five-year plan to build the Oriental beauty R & D system. Li Huiliang, who joined huaxizi and served as chief scientist at the beginning of this year, appeared with the planning.
Huaxizi announced that in the next five years, it will invest more than 1 billion yuan to carry out layout in multiple product innovation, basic research and application basic research fields, so as to create a complete category and technologically advanced Oriental beauty R & D system.
It is worth mentioning that the location of the five-year plan of huaxizi official publicity is a milk tea shop called “xizidai tea”. Huaxizi told the reporter of the daily economic news that the milk tea shop was founded by huaxizi. It is rumored that Li Jiaqi suggested huaxizi open an offline store, but huaxizi opened an offline milk tea store.
Whether the rumors are true or false, it is an indisputable fact that huaxizi has a deep connection with Li Jiaqi. The outside world even once questioned that huaxizi had “Li Jiaqi dependence” and “heavy marketing” has become one of the labels of huaxizi in people’s eyes.
But huaxizi is not satisfied with today’s development route. Lu Shang, chief product officer of huaxizi, told the daily economic news that Li Jiaqi accounted for no more than 5% of the whole business in the company. “We rely more on the concept of CO creation of Li Jiaqi and our products.”
If Li Jiaqi represents the era of marketing, huaxizi is now more willing to mention its new chief scientist Li Huiliang, which seems to symbolize its determination to build “huaxizi 2.0”.
According to public information, Li Huiliang has successively served in Shanghai Jahwa United Co.Ltd(600315) and Bloomage Biotechnology Corporation Limited(688363) and is known as the “father of the six gods”. On January 4, Bloomage Biotechnology Corporation Limited(688363) announced that Li Huiliang, the company’s deputy general manager, chief technology officer and core technician, resigned from the company’s deputy general manager and chief technology officer for personal reasons.
After completing the “myth” of the rapid rise of domestic brands, can today’s huaxizi tell a new story of “R & D”?
Five year gallop: Gmv reached 5.4 billion yuan last year
According to public information, huaxizi brand was born in Hangzhou on March 8, 2017. It is a makeup brand with the concept of “Oriental makeup and flower based makeup”.
The speed of development in the past five years can be called “Xiben”.
Shanglu told reporters that in 2019, huaxizi’s sales volume of Gmv was 1 billion yuan, and by 2021, huaxizi completed a Gmv of 5.4 billion yuan.
From obscurity to fame, huaxizi’s rise is inseparable from several key “choices”: pricing, culture and channels.
Bai Yunhu, a beauty management expert, told the daily economic news that huaxizi did not play the concept of “big brand flat replacement” like the domestic beauty brands rising at the same time, and did not play a price war, which helped huaxizi avoid the vicious market of cost-effective competition. “In other words, huaxizi chose a good subdivision track.”
The reporter found that compared with the previous domestic beauty brands, huaxizi has a higher product and price positioning. Taking several popular products of huaxizi since its establishment as an example, the price of huaxizi honey powder is 149 yuan, and the constant price of Tongxin lock mouth red sun is 219 yuan, all of which belong to middle and high-end products.
“Why can Chinese brands only sell at cheap prices? We need to break the price ceiling. Low prices will only block brands at the level of low technology, low creativity and low R & D capability.” Feiman, co-founder of huaxizi, said in an exclusive interview that huaxizi must escape low price competition if it wants to produce products with high creativity, high technology and high investment.
In addition, Bai Yunhu believes that huaxizi focuses on its own domestic label and the concept of “keeping makeup with flowers”. At the same time, it publicizes Chinese culture and stands at the outlet of current consumers’ pursuit of domestic self-confidence in products.
Shanglu said that since its establishment, huaxizi’s brand positioning and R & D concept have come down in one continuous line and are related to Chinese culture. “We didn’t make such a brand because of the popularity of national tide.”
More importantly, with many new consumer brands rising rapidly in recent years, huaxizi grasped the opportunity of the rise of online channels and carried out strong marketing promotion with the help of these new channels.
“Hua Xi Zi has grasped the dividends brought by the rise of a series of channel tiktok such as Li Jiaqi, Xiao Hong Shu and jitter live broadcast.” Bai Yunhu said.
Shang Lu disclosed that at present, Hua Xizi will still focus on Tmall, jitter and other online channels. “At present, there will not be too many channels under the tiktok. The main reason for the trip is independent stations, and more for the purpose of brand building, and all channels will not be targeted at sales.”
The cooperation between Li Jiaqi and Hua Xizi over the years is a story that the outside world is fond of talking about. Huaxizi really came into the public’s view after in-depth cooperation with Li Jiaqi.
According to Shanglu, the cooperation between Li Jiaqi and huaxizi began in 2018. The specific cooperation content between Li Jiaqi and huaxizi was recorded in the first issue of Luyu appointment in May 2020.
During the meeting, huaxizi gave Li Jiaqi a lipstick with the shape of a Chinese lock. Li Jiaqi bluntly said that the appearance of the lock was too new. “The color of the lock is very old. I don’t need you to use so much silver.” For the tassels and beads on this lipstick, Li Jiaqi said: “if you want to make this tassel, make this bead darker and not transparent, otherwise it will give people a sense of cheapness.”
Undoubtedly, Li Jiaqi’s live studio is not only the channel of huaxizi, but also gave huaxizi a lot of important suggestions at the product level.
From Li Jiaqi to Li Huiliang, huaxizi wants to tell a new story of “R & D”
2018 is the second year of huaxizi’s establishment and the year of Li Jiaqi’s “out of the circle”. This year, Li Jiaqi challenged the Guinness world record and became the person who painted the most lipstick in the standard time at that time. At the end of 2018, Li Jiaqi and Ma Yun PK sold lipstick together, and the name of “lipstick brother” began.
Shanglu used “knowing in micro time” to describe the fate between Li Jiaqi and huaxizi. The cooperation with Li Jiaqi has become one of the key factors for the rapid rise of the brand. However, huaxizi has been repeatedly questioned to suffer from “Li Jiaqi dependence”, and has been labeled as a “large marketing family”.
Four years later, the data show that the impact of Li Jiaqi’s live studio on huaxizi is decreasing. According to the data provided by the “business consultant”, the sales volume of Li Jiaqi’s live studio accounted for 18.48%, 15.55% and 5.25% of the total sales volume of huaxizi brand in 2019, 2020 and January June 2021, respectively.
Five years after its establishment, huaxizi tried to tell a “new story of R & D”. In addition to the endorsement of Li Huiliang, the “father of the six gods”, who has worked in the industry for more than 30 years, huaxizi began to publicize her strength in R & D.
Huaxizi said that in addition to the 11 established joint flower bases, the first phase of huaxizi’s cosmetics science and innovation center was completed and put into use in August last year.
In terms of equipment, in terms of vision and space innovation research, huaxizi said that the research center is equipped with a number of internationally leading 3D printing and AI design equipment, while in terms of cosmetics science and innovation, it has a number of high-throughput analysis and detection instruments and equipment, including two mass spectrometers.
In addition, huaxizi also said that at present, there are more than 200 R & D related employees. This year, based on the existing team, we will further improve the basic research, applied basic research, human safety and efficacy evaluation team, and establish a new research direction of digital cosmetics.
According to huaxizi, its R & D has achieved results. According to the data, by the end of February 2022, Huaxi subsidiary and parent company had more than 120 patents, including 38 invention patents and 19 utility model patents.
According to the panorama of global cosmetics industry technology in 2022, the top 10 patent applications in the global cosmetics industry are L’Oreal, Amori The Pacific Securities Co.Ltd(601099) , Kao, LG life health, P & G, zishengtang, Henkel, BASF Europe Dai Nippon Printing Co Ltd and pioneer international seed company. Among them, L’Oreal cosmetics has the largest number of patent applications, 7301. Amore The Pacific Securities Co.Ltd(601099) ranks second with 6342 cosmetic patent applications.
The gap remains clear. If rising stars want to really become first-class, they first need to face the problem of “insufficient accumulation”.
“There are some common problems with new consumer brands, one of which is’ success and failure marketing ‘. The precipitation of a brand takes time, but today’s business environment, competitive environment and marketing environment have not created a good environment for the rise of China’s beauty.” Said Bai Yunhu.
Bai Yunhu said that Shanghai Jahwa United Co.Ltd(600315) and many international brands have been precipitated for nearly a hundred years, “The new and cutting-edge brands of beauty track have grown up in three to five years, because the current path for consumers to get information, understand brands and products, and even buy goods has been shortened. This also leads to the reality that it is difficult for beauty brands to grow slowly in decades.”
In addition, insiders told reporters that although huaxizi takes the medium and high-end route, huaxizi is still mainly OEM, which also raises some questions from the outside world. As for whether the products are mainly OEM products, the daily economic news asked huaxizi for confirmation. As of press time, huaxizi has not given a response.
Late strike? Overweight research and development is just beginning
While vigorously increasing R & D, huaxizi is also showing its ambition in brand development.
“We have a consensus that we should not only forge a century old brand, but also forge a first-class brand in China and can be called a very front-end first-class brand in the world.” Li Huiliang said.
Even if there is still a long way to go to compare with international brands, if you want to “go on” for a long time, R & D capability is indeed an indispensable part of Chinese cosmetics brands, but the difficulty is obvious.
“For China’s cosmetics industry, from the 1980s to the present, from no R & D to R & D, from the so-called R & D is to develop goods to the idea that this product needs to be studied. The industry began to recognize the importance of basic research.” Li Huiliang said that if a cosmetics enterprise wants sustainable development, it needs to uphold long-term ism and carry out essential basic research.
As a big man in the industry, Li Huiliang vividly described the difficulties in cosmetics research and development.
“Research and development of products is a bit like assembling a car. It may take a few seconds for a tire to assemble a car, but it may take ten or twenty years of research. The same is true of cosmetics research and development.” Li Huiliang said.
He revealed that engineers in the industry have conducted in-depth research on well-known skin care products such as “small brown bottle” and “small black bottle”, “It’s not only the proportion of the formula, but also the impurities contained in it, but it’s still not copied, because there are actually many small formulas in a formula, such as missile system, radar system, power system, etc. It’s useless to know the metal proportion and material proportion of the aircraft carrier. Therefore, one The technical force in a good product is very complex and powerful, which needs to be supported by basic research. “
In fact, in recent years, domestic cosmetics have already started the “R & D competition”. Overweight R & D and tearing off the label of “heavy marketing” have become the mainstream practice of domestic cosmetics brands.
Take the perfect diary as an example. It is understood that in March 2020, the perfect diary announced a cooperative investment plan with cosmesch and Yixian e-commerce, the world’s largest cosmetics OEM company, with an investment of nearly 700 million yuan to build a free cosmetics R & D and production base. It is expected to be officially put into operation in 2022, with a future output value of 2 billion yuan.
In addition, according to the financial report data of vinona’s parent company Yunnan Botanee Bio-Technology Group Co.Ltd(300957) in the first half of 2021, during the reporting period, Yunnan Botanee Bio-Technology Group Co.Ltd(300957) R & D investment was 47.29 million yuan, an increase of 85.24% year-on-year.
On the whole, 2021 is the year of accelerated development of China’s cosmetics market and the first year for Chinese cosmetics brands to move towards high-end. This year, the annual sales volume of China’s social consumer goods and cosmetics category exceeded 400 billion yuan for the first time, an increase of 14% over the previous year.
In addition, in 2022, with the implementation of the standard for efficacy declaration and evaluation of cosmetics, the cosmetics industry officially entered the era of efficacy evaluation. This means that the efficacy claims of cosmetics must be based on facts, and the model of “boasting” of enterprises has come to an end.
For huaxizi, the announcement of overweight R & D on the occasion of its fifth anniversary is not only an inevitable step in its long-term development, but also the result driven by the development of the industry. For a long time, the high-end cosmetics market has always been the world of international brands, and it is also the target market that domestic cosmetics brands want to squeeze into. Although it starts late and has a weak foundation, it does not mean that domestic brands have no chance to “attack later”.
With the increasing confidence of Chinese consumers in domestic brands, as a rookie of domestic products, whether huaxizi can make achievements in R & D is related not only to the brand itself, but also to a certain extent whether the domestic cosmetics brand can complete a new round of “gorgeous transformation”.
