Multi wheel drive, stable mode, intensified “crisis” of platform and brand, and highlighted “opportunities” of generation operation.
The market is excessively worried about the sustainability of the performance of the agent operating company (the transfer of brand to self-management, the decline in the proportion of tmall channels, and the ceiling of brand scale). We believe that the business model of the agent operating company is stable. The reuse of experience across categories and leading efficiency bring steady growth (brand expansion, brand endogenous growth and profit margin improvement), while the upgrading of modes such as “live + sea” and “brand management” contribute to performance flexibility.
Under the background of intensified competition between platforms and brands and increased pressure on performance achievement, and with the strong supervision of live broadcast e-commerce, the brand needs to shift its dependence on online popular anchor to products and marketing creativity itself, and needs more professional operation of agent operation.
Demand side: brand agent operation demand and brand cooperation stability supermarket market expectation
From the perspective of international brands, the core of its business strategy lies in product R & D and brand building, and pursues localization in channel operation. L’Oreal turns self-operation into a special case, and other brands establish stable agent operation cooperation. From the perspective of Chinese brands, in the past, the partial homogenization of products paid more attention to marketing, so it paid more attention to the self establishment of omni-channel own operation team. The construction of product power and brand power is also the way to win for a long time. In the long run, it needs more professional division of labor.
Supply side: category reuse, capability differentiation and efficiency winning
1) category expansion: most of the agent operating companies started with beauty makeup, which is still the main category of agent operation, and the penetration rate of agent operation of other categories is still low. Beauty makeup belongs to the category with very high operation difficulty, extending other trend categories and experience
With strong reusability, the head agent operation company has many benchmark customers and successful cases in category expansion. 2) Mode upgrading and capability differentiation: in the process of business maturity development, we have established “brand management” capabilities such as “understanding people”, “understanding products”, “understanding brand” and “understanding marketing”, forming the conditions for CO creating and incubating brands. Taking netcreation as an example, we can play the function of “brand accelerator” in addition to traditional services.
3) economies of scale: strengthen the medium platform architecture + digitalization, expand the management radius, and the scale effect is becoming more prominent. The data sharing and capacity reuse among brands do not bring great marginal management pressure to the expansion of cooperative brands. Compared with GSI commerce, the ancestor of international agent operators (20 categories and more than 500 customers), Chinese agent operators have broad brand development space (the largest number of baozun in 2020 is 266, and the others are less than 100).
New growth: the demand for new channels is rising again, and the switching performance of generation operation channels is getting better and better
The live broadcast e-commerce channel is relatively prosperous, and there is a wide space for beauty makeup to go to sea. For such new channels, the brand has wider demand for agent operation when entering. The agent operator has strong channel insight, and the resources and operation experience of agent operator operation can be transferred, which can effectively help the brand from “0 → 1” & “1 → 100” in the new channel. TP to DP tiktok handover is not bad. The case of Syoung Group Co.Ltd(300740) and Shanghai Lily&Beauty Cosmetics Co.Ltd(605136) ‘s subsidiaries were selected in the 2021 year’s annual case of the voice service provider’s ecological case. In terms of cross-border blue ocean, the first generation operators explore cross-border e-commerce market opportunities. For example, Shanghai Lily&Beauty Cosmetics Co.Ltd(605136) has been exploring in the field of e-commerce in Southeast Asia since 2020, and has successively cooperated with Nivea, o’shudan, qishimei, Revlon and other brands on lazada, shopee and other platforms.
Investment suggestion: the reuse of experienced categories and the leading efficiency are expected to continue to bring steady business growth to the generation operation company. At the same time, the smooth switching across channels and the upgrading of brand management mode can open up business growth space, Recommend Syoung Group Co.Ltd(300740) (with in-depth and systematic service capability, comprehensive upgrading of private brands and continuous improvement of profitability, agent brands have entered a benign track of business, and continue to connect new brands, double businesses go hand in hand, and high-quality performance growth continues to be realized), Hangzhou Onechance Tech Corp(300792) (positioning the global operation toolbox and brand growth accelerator, business evolution speed is expected to exceed market expectations, tmall category expansion and brand growth are determined, and new channels and brand empowerment contribute to performance flexibility). It is suggested to pay attention to Shanghai Lily&Beauty Cosmetics Co.Ltd(605136) , baozun e-commerce, Guangzhou Ruoyuchen Technology Co.Ltd(003010) , etc.
Risk tip: the impact of repeated epidemic on consumption, intensified industry competition, brand termination risk, employee turnover risk, etc.
