Large single products need to rely on continuous component innovation and marketing investment to continuously attract consumers. An excellent large single product is one of the core driving forces for the long-term growth of cosmetics and can improve the enterprise valuation. Large single products often come from explosive products, so their emergence has great contingency, but at the same time, they also have certain inevitability, that is, the R & D power of the brand, the marketing power and the sensitivity of the organizational structure.
Excellent large single product is the "cash cow" product of the brand and an important support for the long-term growth of the brand. An excellent large single product can bring traffic and profits to the brand at the same time. It is one of the core products driving the long-term and steady growth of the brand. For example, Estee Lauder large single product small brown bottle has made an important contribution to the growth of its skin care business almost every year since 2010. Excellent large single products can often achieve the scale effect of R & D and marketing in the process of growth, maintain high re purchase and attract new customers through minimally invasive innovation of products and marketing.
The growth of large single products requires time verification to test the comprehensive abilities of brand R & D and digital marketing. Large items often grow from explosive items, and it usually takes at least 3-5 years to verify their sustainability. In the growth process of large single products, it is very important to test whether the brand's organizational structure can support its continuous innovation in R & D and marketing. Take Estee Lauder as an example: 1) R & D end: the small brown bottle has made continuous micro innovation in composition and formula in the growth process. On the basis of split yeast, In the fourth / fifth / sixth generation, the concentration of patent complex was increased by 5 times / tripeptide active substance / Echinacea purpurea extract were added respectively; 2) Digital marketing: Estee Lauder established a digital system in the early stage to realize the timely tracking of terminal sales. In 2010, it turned to a comprehensive digital strategy to realize high-frequency interaction with consumers by launching online consultants, making a series of exquisite beauty tutorials, and launching a large number of online Red KOL promotion.
Some brands have obvious first mover advantages, and differentiation is the core of latecomers' breakthrough. Lancome small black bottle has a concurrence relationship with the small brown bottle by positioning the "muscle essence fluid". The Olay white bottle is made through nicotinamide component + card whitening function and full effort into content marketing, so as to realize the differential positioning of large single products with positioning and anti-aging.
Large items have strong scalability and can achieve continuous growth through continuous upgrading + expanding categories. Large single products are commonly seen in essence, cream, eye cream and other categories, which can drive performance growth through upgrading and extension categories: 1) in terms of product upgrading, small brown bottles have been upgrading 7 categories in the past 40 years since the launch of the small brown bottles. Besides the failure of the third generation of small brown bottle positioning changes, each upgrade of the remaining base can arouse consumers' attention again and achieve sales growth. After the upgrade in 2019, the small black bottle leads the concept of micro ecological skin care, causing a number of enterprises to follow suit; 2) category development, such as small brown bottles and small black bottles, are expanded from cream to eye cream and facial mask. For example, small brown bottle eye cream has grown significantly in the Asia Pacific region in 2017, pushing the small brown bottle series to achieve a high growth rate of almost 50% worldwide.
Through the resumption of Dabao SOD honey, we found that continuous innovation is very important for the growth of large single products. Dabao opened the market in 1990 through the product power of SOD Honey + CNR high-frequency marketing, and once accounted for more than 17% in the cosmetics market in 2003. However, Dabao kept its products at a low price in order to maintain the middle and low-end image close to the people. Due to insufficient profits, strategic mistakes and other comprehensive reasons, Dabao did not carry out continuous innovation or upgrading in the composition and marketing side. Therefore, Dabao gradually lost its competitiveness in the rapidly changing cosmetics industry on the demand side. From 2003 to 2005, its sales stagnated and its market share gradually decreased thereafter. Although under the leadership of Johnson & Johnson, it has continued to innovate on the product side in recent years, the second revival of its brand still has a long way to go.
Investment suggestion: the cosmetics market has a broad space, strong brand power is a scarce resource, and the stricter supervision makes the degree of industry standardization continue to improve. With the rise of traffic cost, the intensification of the internal volume of the industry and the improvement of consumers' awareness of scientific skin care, brands can better attract consumers through strong product power. In the future, cosmetics enterprises with real star large single products, strong brand power and group operation ability are expected to continue to seize market share. It is recommended that Yunnan Botanee Bio-Technology Group Co.Ltd(300957) with core large single products, Proya Cosmetics Co.Ltd(603605) and Bloomage Biotechnology Corporation Limited(688363) with large single product strategy being gradually verified, and Shanghai Jahwa United Co.Ltd(600315) , Guangdong Marubi Biotechnology Co.Ltd(603983) and Syoung Group Co.Ltd(300740) with large single product strategy expected. Maintain a "recommended" rating for the cosmetics industry.
Risk tip: the price reduction of overseas famous brands exceeded expectations; Repeated epidemics lead to slow recovery of consumption intention; The impact of Yimei on the cosmetics industry exceeded expectations; Overseas big brands accelerate their entry into China and intensify competition; Major marketing events occur; Foreign companies in China are not fully comparable, and the relevant materials and data of benchmarking are only for reference; Focus on the uncertainty of the company's future performance.
