[Industry Information] Skincare and makeup giants revealed in their financial reports that， their revenue in the first half of the year was considerable. How will they make progress in the second half?

Recently, Shanghai Jahwa, PROYA, BOTANEE and other cosmetics listed enterprises have released half-year financial results. Based on the data they disclosed, many companies have achieved significant revenue and profit growth in the first half of this year. Which beauty brands led the market in the first half of the year? Next, how can they better grasp new opportunities, respond to new changes and meet new challenges?

PART 01

In the first half of the year, the domestic cosmetics company made a good profit

Recently, the report card of domestic beauty listed companies in the middle of 2023 has been released. Happily, three of them have exceeded 3 billion yuan in revenue, namely Shanghai Jahwa, PROYA and BLOOMAGE BIOTECH, showing the steady growth and competitiveness of the domestic cosmetics industry.

According to the semi-annual report of Shanghai Jahwa in 2023, during the reporting period, the company achieved operating income of RMB 3.629 billion, down 2.30% yoy(year on year); the net profit attributable to shareholders of listed company was RMB 301 million, up 90.90% yoy; the net profit attributable to shareholders of listed company after deducting non-recurring gains and losses was RMB 262 million, up 30.72% yoy. In terms of business performance, the revenue of skin care products in the first half of the year was 871 million yuan, up 7.16% yoy, accounting for 24.06% of the company's main business revenue. Although the revenue of personal care, home cleaning, mother-infant and cooperative business has declined to different degrees, the main brands such as Liushen, Dr.Yu, Herborist and GF have a good performance.

According to PROYA’s semi-annual report of 2023, from January to June, the company's operating income was RMB 3.627 billion, up 38.12% yoy; the net profit attributable to shareholders of the listed company was RMB 499 million, with a year-on-year increase of 68.21%. In terms of the brand, its major private brands have achieved good growth data. Main brand PROYA sold 2.892 billion yuan, up 35.86% yoy; TIMAGE achieved revenue of 414 million yuan, up 78.65% yoy. By category, the operating revenue of skin care (including skin cleaning) products was 3.056 billion yuan, up 38.06% yoy; the revenue of beauty and makeup was 466 million yuan, up 32.30% yoy; the revenue of toiletries was 97 million yuan, up 94.17% yoy.

The report of BLOOMAGE BIOTECH in the first half of 2023, during the period, the company achieved revenue of 3.076 billion yuan, up 4.77% yoy; net profit of 425 million yuan, down 10.27% yoy. Among the three major businesses, the revenue of functional skin care products was 1.966 billion yuan, down 7.56% yoy, while the revenue of BIOHYALUX, QUADHA, MedRepair and Bio-MESO declined to varying degrees.

According to BOTANEE’s semi-annual report, during the reporting period, the company achieved revenue of 2.368 billion yuan, up 15.52% yoy; realized net profit of 450 million yuan, up 13.91% yoy. The WINONA brand became a major contributor to the company's performance, with revenue of 2.26 billion yuan in the first half of the year.

Syoung Group achieved revenue of 2.29 billion yuan in the first half of the year, up 4% yoy. Specifically, the revenue of the company was 454 million yuan, down 0.51% yoy; the revenue of the cream was 1.716 billion yuan, up 4.53% year on year. In addition, Yixian e-commerce, Giant Biogene, CHICMAX shares in the first half of the revenue also exceeded 1.5 billion yuan. It is worth mentioning that, if according to the announced single brand revenue, performance of these two single brands, WINONA and PROYA, can be said to be far ahead of the domestic beauty brands.

PART 02

What breakthrough does the skin care and makeup business rely on in the second half of the year?

According to iiMedia Consulting, the market size of China's cosmetics industry reached 485.81 billion yuan in 2022, up 6.7% year on year. In recent years, with the transformation and upgrading of China-fashion beauty brands and the change of national consumption concept, the cosmetics industry has achieved great space for development, and the size of China's cosmetics market will maintain a stable growth. It is expected that the market size will exceed 510 billion yuan in 2023.

Research data show that the key factors affecting consumers to buy China-fashion beauty brands are product quality (68.57%), product price (58.62%), efficacy (54.91%) and product composition (53.32%). In terms of the future improvement of China-fashion beauty products, 58.85% of consumers believe that the quality of after-sales service should be improved. Analysts believe that with the national quality monitoring and tightening of the beauty industry, China-fashion beauty brands should be based on product quality, improve the service quality of the whole process constantly, and promote the high-quality development of the industry.

The personage inside consider that, product quality has become the most important factor that influence consumers to buy China-fashion beauty makeup. With the improvement of consumption power, the quality of national consumption will also improve. In the field of beauty makeup, consumers will put forward higher quality requirements for China-fashion beauty makeup. "Attach importance to research and development" and "Pay attention to product efficacy" will be the future transformation road of China-fashion beauty makeup industry. According to the semi-annual report of listed companies, the R&D investment of various enterprises also showed an increase trend in the first half of the year, of which BLOOMAGE BIOTECH was 187 million yuan, BOTANEE ranked second with 109 million yuan of research and development expenses, and PROYA's research and development expenses were 92 million yuan.

In addition, as can be seen in the corporate earnings reports, the key word "big single product" is frequently mentioned. Bank of China Securities research report said that with the recovery of consumer confidence and the further release of demand, the brand starts from two aspects of marketing and product, and creating "explosive products" and "explosive products series" will be the key to win. Cosmetics in the future shift to hot commodity driven, "Marketing + Product" is indispensable. Consumers are more clear about product efficacy and their own needs, and the brand differentiation is increasing under the background of industry slowdown, which puts forward new requirements for leading enterprises to accelerate product research and development layout, and products with strong competitiveness can break out in the future. In the future, the leading cosmetics companies need to have the dual ability of both marketing and product research and development, and continue to create high-quality products.

Another trend in the beauty industry is " high-end oriented". Industry insiders said that the high-end domestic goods is not only the "high price", the real high-end should be high quality, high effect, high value, product force is the foundation of an enterprise standing. Bank of China Securities Research report pointed out that at present, international brands are still grasping the high-end market, and with the continuous rise of local domestic brands, the future trend of brand competition pattern optimization is expected to continue.

—— Information is from: Information Times