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02 Nov
Welcome to this week’s article. Today, we’ll be exploring six of the most influential beauty and cosmetic platforms shaping the course of Chinese beauty and cosmetic trends. We hope you enjoy.
MeiZhuangXinDe (美妆心得)
Meizhuangxinde (MZXD) is a mobile beauty app founded in 2013. It functions as a comprehensive cosmetics guide and community forum and is popularly referred to as the ‘Dianping of China’s Beauty Industry’.
Their 80 million users comprise mostly of millennials and Gen-Z. Roughly 77% of their user base are those born post-90s and including 44% post 95s. These generations are commonly regarded to be of the highest value, not only to the beauty category, but to eCommerce overall.
Users leverage MZXD primarily as a research tool, gaining access to discounts and product recommendations. Signing up as a member yields you access to exclusive offers and discounts, most of which are issued by targeted coupon offers.
Expansion into Retail & Distribution
More recently however, MZXD has branched out to expand their retail operations, both online and offline. Since 2017, they have opened over a dozen physical retail outlets under the ‘Meixingjia’ banner, not including a string of pop-up and experience stores. They have also launched a Cross-Border eCommerce model.
Below are some screengrabs and photos from the recent launch of their trial ‘In77’ Hangzhou Experience store. These stores comprise of a few key elements, including:
- Makeup Classes
- Makeup Studios
- Skincare Salons
- ‘Beauty Black Technology’
- Overseas brands
- Beauty experience awards & competitions
- New Retail O2O integrations (including a WeChat Mini Program Onramp)
At the time of writing, this store boasts over 1,000 SKUs from over 200 brands in the mid-high-end skincare and makeup categories. SKU selection has been optimized using big data provided by the online app and are updated weekly. Interestingly, MZXD are betting on makeup as the driving force behind the growth of the beauty industry. They recently forecast that makeup products will likely comprise 40-50% of their physical retail stock in future, up from 30% today.
Mogujie (Mogu)
Mogu is a publicly listed, social eCommerce platform founded in 2011 and backed by Tencent. Founded by former Alibaba engineer Chen Qi; Mogujie translates to ‘mushroom street’. The original incarnation of the platform aimed to mimic Pinterest. However, as most posts and listings linked Mogu’s communities to Taobao, the transition into ecommerce was inevitable.
Similarly, to MZXD, Mogu’s 62.6 million active users are 80%+ female. By contrast to MZXD, they comprise a slightly older age bracket. As you can see in the age breakdown right, Mogu is popular not only amongst students, but also young working professionals.
Livestreaming: Now Central to Mogu’s Value Proposition
In March 2020, Mogu made an announcement that their livestreaming business is gaining momentum, comprising for 53% of GMV (+14% YOY). This included a 155% leap over the 2019 Singles Day festival alone. You can check out their third quarter fiscal year 2020 highlights here.
When checking out any of Mogu’s livestreams in your web browser, you’ll be prompted to enter Mogu’s WeChat Mini-Program to actually view the broadcast. From there, you can see just how seamless, pain-free and convenient shopping is via the platform, with user comments and purchase links clearly available.
MeiLi XiuXing (美丽修行)
MeiLi XiuXing (MLXX) is an ingredient-query tool that has been making waves across China in recent months for breaking stories on harmful ingredients being used in popular skincare products.
Founder Yi Ou famously worked for many years in China’s chemical industry as a polymer material project manager. She frequently saw first-hand the effects many of the chemicals used in popular skincare products were having on young female users. In 2011, she left her high paying job to return to Shanghai, with the plan of starting an enterprise to solve this issue.
After posting an ingredients analysis article in a public beauty forum, Yi Ou was swamped with over 200,000 likes as thousands of readers reached out to her for help and advice. This was the point in time when she realised that Chinese consumers probably do not need another beauty eCommerce app. However, they certainly do need a tool which helps to identify which product ingredients are safe, effective and/or harmful. After years of development, MeiLi XiuXing was launched in 2015.
Uncompromising Attention to Ingredient Transparency
Throughout the MLXX journey, Yi Ou has stayed true to her mission. In 2016, she launched an MLXX WeChat group-buying trial, which was well received, and saw her achieve many lucrative offers for partnerships. Fearful that an eCommerce operation might taint the integrity of the platform, as well as user trust of the platform, the trial was disbanded.
Her uncompromising approach to business is paying off. In 2019, MLXX’s revenue and profits doubled, while the number of users increased from roughly 10 million to about 15 million. Notably, MLXX is particularly popular with older women in the post 1985 age bracket. After several recent rounds of financing, Yi Ou has a goal set to attract over 100 million users over the next three years.
Key Value Proposition of MeiLi XiuXing
MLXX aims to shine a light on the efficacy and safety of ingredients being used in popular cosmetics products. The reason for its recent explosive popularity is that everyday users can check the ingredients of more than 2 million cosmetics with one click. i.e. Is it safe? Is there a risk of causing acne? Can pregnant women use it? To summarise its key features, users can:
- search by product or by ingredient.
- Access multiple databases including China’s State Drug Administration
- conveniently access real consumer and expert/KOL reviews about any given ingredient.
- Seamlessly access ‘recommended’ alternatives to the products/ingredients they are browsing. This enables them to incorporate scientific evidence to their decision-making processes.
Furthermore, MLXX can also be tailored to the individual user’s skin type to optimise recommendations / guidance; through openly leveraging the globally renowned ‘Skin Type Solution’ developed by US dermatologist Dr. Leslie Baumann M.D.
You Look So Good Today (你今天真好看)
You Look So Good Today (YLSGT) is an AI skincare tool which was launched in 2016. It enables users to regularly check their skin health by simply taking a photo. Firstly, when you fire up the app each day, it gives you a summary of your local environment conditions, enabling you to plan your skincare routine accordingly. I.e. will there be sun or rain? What is the Air quality Index (AQI) today?
Upon opening, the user is prompted to take a photograph of their face (with the flash on). Based on the photos, the app then provides you a summary of specific feedback, information and guidance on how to care for your skin. YLSGT’s algorithms are so extensive, it is claimed that they can identify the skin age, pores, blackheads, oil level, smoothness, skin tone (the list goes on) with over 90% accuracy.
The user can obtain tailored, scientifically based skin care advice that even factors in local environmental factors, such as temperature and humidity. Based on these findings, YLSGT will then suggest suitable products and Ingredients.
The app has gained much attention since launching in 2016. Its concept has even been allegedly plagiarised by one of China’s biggest technology companies. Today, YLSGT boasts over 5 million users, roughly 90% of which are female, and most of whom live in Tier 1 and 2 cities.
Skin Secret (肌肤蜜诀)
Secret (Launched 2018) boasts a remarkably similar offering to You Look So Good Today. It appears the main difference, however, is marketing, combined with a slightly more ‘commercialised’ business model.
The user is prompted to take a photo of their skin to identify key problems (i.e. do you stay up late? Do you have large oily pores?). From there, users gain access to a customised skincare plan. These plans might incorporate regular visits to local beauty salons, recommendations on easy lifestyle changes, as well as recommended products based on the users’ unique skin type. Furthermore, users also gain access to a variety of skincare education courses, videos and learning materials.
Skin Secret have made it their point of difference to provide a slightly more comprehensive skin health analysis.
The Not-So-Secret Commercialisation Strategy
By stark contrast to YLSGT, Skin Secret boasts a relatively open partnership with Rongyao Smart Beauty Instruments, and frequently recommends their tools to test and maintain the condition of users’ skin.
Jumei
This last one is an honourable mention for a fallen powerhouse. Jumei YouPin is a beauty and cosmetics retailer, and is commonly cited as being ‘the pioneer of the cosmetic group-buy business model’. Jumei achieves this through implementing a ‘direct-purchase’ model similar to VIP Shop, also supplying overseas brands via Cross-Border eCommerce.
From the Highest of Highs, to a Public Delisting.
Back in 2013, Jumei processed an estimated 22.1% of China’s online beauty product GMV, making them China’s top online beauty retailer. The company listed on NYSE the stock exchange in 2014, before quickly achieving a valuation of US5.5 billion. Launching into the CBEC space in 2015, Jumei was once touted to be a ‘VIP-Killer’. Meanwhile, the world was going crazy for its hunky millennial founder Chen Ou, nicknamed ‘Mr Right’.
However, in recent years, Jumei’s market share has substantially diminished. A string of counterfeit scandals shook consumer and investor confidence, and landed Jumei in court. Meanwhile, Jumei was battling the dramatic rise in market competition from both small and major players, notably Alibaba. It is widely regarded that Jumei’s organisational structure likely stifled the platform’s ability to adapt to aggressive industry changes, such as the emergence of KOL and livestreaming technologies. Before delisting from the NYSE in April, Jumei’s valuation had plummeted down to a mere US$227 million. You can check out their investor centre here.
