Challenging L'Oreal, PROYA suffers from marketing difficulties

In recent years, in the process of challenging international brands, the domestic beauty brand PROYA has not only repeatedly set new performance records, but also faced the dual challenges of various marketing strategies and product quality.

PROYA, a domestic beauty brand, has made frequent moves and "failed" at the same time in recent years, but it dared to challenge international brands. From anti-aging essences to new whitening products, PROYA has fought back amid consumption downgrade.

1. The “Marketing Tragedy” is Caught in the “Her” Controversy

On March 4, 2023, PROYA, a brand that once became popular with its Women's Day marketing and received wide acclaim, was unexpectedly caught up in negative controversy. The main theme of its Women's Day plan continued from 2021, "Gender is not the boundary, prejudice is", which was not a problem.

However, the experience shared by two male users touched the sensitive nerves of netizens. Questions were raised: "What is a female brand doing by being so 'empathetic'?" Although PROYA's official explanation was that it was intended to discuss gender equality, netizens did not buy it and said bluntly that "the biggest problem is that the audience does not like it."

In the end, PROYA deleted the content.

This is not an isolated case. With the prevalence of the "she economy", Women's Day has become a major marketing node for brands to involute. Brands such as Hao Huanluo and Five Female Doctors have been caught in the whirlpool of public opinion due to inappropriate marketing. Brands try to take advantage of women's issues, but they often fail and cause opposition and controversy.

Looking at the long-term trend, although the brand’s Women’s Day marketing has undergone many reshapings and adjustments, it has become increasingly homogenized in concepts and slogans, making it increasingly difficult to stand out.

For brands, communicating with female consumers on Women's Day should be a good thing to enhance brand awareness and bring actual benefits. However, many brands are stepping into the minefield, which not only fails to bring positive feedback, but also damages the brand image.

From the elevator advertisement of five female doctors, to the controversial tweets of Haohuanluo, to the cooperation between Ubras and Li Dan, a series of failed cases make people reflect: How should brands find a balance in Women's Day marketing?

The core reason is that, on the one hand, brands put marketing before Women's Day, hoping to attract sales or go viral, but ignoring the essential meaning of Women's Day. On the other hand, perspective misalignment is also a common minefield. Although brands have begun to emphasize women themselves and pay attention to the real problems faced by women, it is still inevitable that some brands fail to grasp the boundaries, such as the controversy surrounding Proya.

Faced with considerable traffic dividends, many brands have begun to pay attention to Women's Day marketing, but the problem is that many brands have not figured out "what exactly Women's Day marketing is about."

Putting aside the specific cases of failure, in fact, Women's Day marketing has undergone significant changes and progress in recent years. The most obvious point is the change in narrative. Brands have adjusted their narrative methods and derived more female topics around "Women's Day" itself.

"How to correctly market women's products?" Major brands are shouting!

Looking at the marketing cases this year, there are fewer and fewer that really stand out and receive public praise. Today's Women's Day marketing is still mostly based on correct but empty concept packaging, and the form is relatively simple. Many brands launch Women's Day marketing just to catch the trend at the right time, without a clearer insight, and therefore fail to resonate with female consumers.

However, some brands have tried to break through the inherent marketing routines and truly communicate with female consumers and pay attention to the plight of women in marginalized areas.

For example, Haowangshui’s “100 Girls Wedding Party” theme event, Fuerjia’s “Aunt” story, and Quanmianshidai’s “Mountain City Letters” theme film all demonstrate the brands’ deep insight into women’s pain points and in-depth communication with female consumers.

These are all worth learning from for PROYA.

2. Channels are king: The 618 Shopping Festival in 2024 will not be affected by the trend

During the 618 Shopping Festival in 2024, the total online beauty and skincare sales volume was 26.1 billion yuan, down 13% from 30 billion yuan in the same period last year. But the good news is that in this slightly bleak industry background, PROYA stood out like a bright spot!

On the Tmall platform, PROYA surpassed international brands such as Lancome and L'Oreal, jumping from fourth place to the top of the list; the same is true on the JD platform. After SK-II and Estee Lauder, PROYA ranks third, which is unmatched among domestic brands.

It is worth mentioning that on the first day of 618, PROYA sales exceeded 100 million yuan in less than 20 minutes, leading the beauty category. This speed is astonishing. Looking back at last year's Double Eleven, PROYA was also not to be outdone, surpassing L'Oreal and topping the Tmall skin care brand sales list. All of this indicates PROYA's extraordinary strength and potential.

On April 18, 2024, PROYA Group released its 2023 performance report, with a set of impressive data: revenue of 8.905 billion yuan, a year-on-year increase of 39.45%; net profit of 1.194 billion yuan, a year-on-year increase of 46.06%. This report card is undoubtedly the best annotation of PROYA's strength.

Moreover, in the first quarter of this year, the performance of Proya Group continued to maintain a strong growth trend. During the period, the revenue was 2.182 billion yuan, a year-on-year increase of 34.56%; the net profit was 303 million yuan, a year-on-year increase of 45.58%. At this growth rate, Proya Group is expected to exceed 10 billion yuan this year and become the first domestic beauty company to enter the "10 billion club".

Against the backdrop of the overall slowdown in the beauty industry, PROYA Group has delivered a brilliant report card. Behind this report card is the creation of several new records for PROYA Group: revenue exceeded 8.9 billion yuan, setting a new record for the volume of domestic beauty products;

Net profit exceeded 1 billion yuan for the first time, and both net profit margin and gross profit margin increased; both the growth rates of revenue and net profit hit a new high in the past 10 years.

While achieving record high performance, several brands under the Proya Group also achieved new breakthroughs. The main brand Proya's revenue reached 7.177 billion yuan, breaking through 7 billion for the first time, with a growth rate of 36.36%. On the Tmall platform, Proya's essences, creams, masks, eye creams and other categories all ranked high, demonstrating strong market competitiveness.

Caitang, another brand under the Proya Group, also achieved a revenue of 1.001 billion yuan in 2023, successfully entering the "1 billion club". Its growth rate reached 75.06%, and its share of overall revenue increased to 11.26%.

Caitang's core products are consistently ranked at the top in each category. For example, the "Three-Color Contouring Palette" ranks No. 1 in the highlighter category on Tmall, and the "Two-Color Highlighter Palette" and "Master Primer" are also among the best in the highlighter and isolation/primer categories respectively.

In addition, other brands of the Proya Group also showed rapid growth. OR brand grew by 71.17% to 215 million yuan; Yuefuti brand grew by 61.82% to 303 million yuan. The rapid growth of these brands provided strong support for the overall performance of the Proya Group.

In 2023, PROYA Group's online revenue reached 8.274 billion yuan, a year-on-year increase of 42.96%, accounting for 93.07% of its total revenue.

Taking the Tmall flagship store as an example, the PROYA brand continues to deepen its large single product matrix strategy, optimize product structure, and improve the ranking of core categories and core large single products. At the same time, it comprehensively deploys products in various price segments and strengthens the cultivation of courtesy mentality to further increase the brand's customer unit price and market penetration.

On the Douyin platform, the PROYA brand strengthened its global operations, completed the transformation and efficiency improvement of its accounts through self-broadcasting, and differentiated accounts by product lines to achieve demographic segmentation. These precise operational strategies have enabled PROYA to achieve significant results in online channels.

In terms of offline business, PROYA Group is also constantly optimizing and expanding. In 2023, offline revenue increased by 7.35% to 616 million yuan. Its key offline channels are department stores and daily chemicals.

In the department store channel, the PROYA brand mainly optimizes the store structure, promotes the head system to a direct sales model, strengthens internal management, and increases the average sales of counters.

In the daily chemical channel, we leverage brand potential to consolidate channel inventory, actively seek market growth, and expand cooperation with new shopping mall collection stores.

In terms of channels, PROYA Group is still making great strides online, while also continuously optimizing its offline stores.

3. Product breakthrough: counter-attackers in consumption downgrade, new challengers in the mid-to-high-end market

After the "double anti-aging essence" challenged L'Oreal's position in the anti-aging field, PROYA set its sights on the whitening market and launched a new product called "PROYA Ever Brightening Essence", re-entering this fiercely competitive market.

By checking the National Medical Products Administration system, it is not difficult to find that this new product was registered on March 29 this year, and then the registration was changed on May 15 and 31. At present, this new product has been quietly preheated in the form of "4.9 yuan/1.5ml*2 trial" in the PROYA Tmall official flagship store, seemingly preparing for a new market battle.

Industry observers have said that this move by Proya is undoubtedly a new challenge to P&G after Proya challenged L'Oreal. The competition between Proya and L'Oreal is nothing new.

Looking back, the names of PROYA and L'Oreal are often discussed together. This is not only because PROYA has won over L'Oreal at some important points, such as PROYA's top spot in Tmall Beauty Double 11 in 2023, becoming the first domestic product to surpass international brands; but also because PROYA has taken over the customers lost by L'Oreal's batch of mid-to-high-end international brands in the context of consumption downgrade.

An article mentioned that China's current consumption situation is close to Japan's fourth consumption era, with people's consumption returning to rationality and becoming more sensitive to prices. And PROYA is the beneficiary of this consumption trend.

At an investor exchange meeting in May this year, PROYA's senior management admitted that PROYA was a beneficiary of consumption downgrade. In 2023, when everyone was looking forward to economic recovery but found that the actual situation was far from expectations, PROYA benefited from its unique positioning. It took over customers who originally purchased foreign brands and became a beneficiary of the devaluation of the middle class.

Fang Yuyou, CEO of PROYA, clearly stated in an interview with Forbes: "PROYA's benchmark is L'Oreal." PROYA's strategy is to officially launch products with the same efficacy as big brands like L'Oreal, and even higher content of core ingredients, but at more cost-effective prices.

Take PROYA's star products "Ruby Essence" and "Dual Anti-Aging Essence" as examples. Both products use special formulas and core exclusive ingredients as selling points, directly competing with international brands. However, PROYA's products are more affordable, which has won it wide recognition in the market.

PROYA did not stop there. In the whitening market, PROYA once again launched a challenge against Olay brand under Procter & Gamble.

In fact, PROYA once challenged Olay in the whitening market, but the result was not satisfactory. At that time, PROYA launched its own niacinamide whitening product, the Glow Bottle, but consumers seemed to be more accepting of Olay's small white bottle.

Regarding this failure, Fang Yuyou admitted that because Olay had made the content of niacinamide very clear, consumers believed that niacinamide was Olay, not PROYA.

But PROYA did not give up. Today, it has entered the whitening market again, but its entry point is different from before. The new "PROYA Ever Brightening Essence" strives to achieve whitening function in its formula, adding a variety of ingredients with whitening effects.

In addition, PROYA has also applied for a corresponding invention patent. This complex ingredient can reduce the production of melanin through the synergistic regulation of ubiquitination-proteasome and cellular autophagy, thereby playing a synergistic role.

This time, PROYA did not directly compete with Olay on the topic of niacinamide, but took a different approach and launched its core exclusive formula. In addition, PROYA also revealed that a new series under the brand energy line will be launched soon. This series is positioned in the mid-to-high-end, focusing on brightening and whitening, and is expected to be priced at 300-400 yuan, which is more expensive than Olay's small white bottle.

Proya believes that for Asian women, the concept of whitening is inevitable. However, the whitening products currently on the market, especially those priced around 300 yuan, are actually lacking. Proya hopes to fill this market gap and become a new leader in the whitening market.

Whether challenging L'Oreal or P&G, the essence of PROYA is to initiate reforms from the supply side and launch popular products with "product power + high cost performance" to meet consumer needs. However, PROYA's ambitions do not stop there. It has also set its sights on international brands such as Estee Lauder and Lancome.

In September 2023, PROYA launched the "Energy Series" for mature skin, with the specially developed energy pack "CELLERGY™" as the core ingredient, focusing on "advanced anti-wrinkle, skin tightening and face shaping". Behind this product line, PROYA is benchmarking against international brands such as Estee Lauder and Lancome. PROYA hopes to make efforts in the high-end line to achieve further breakthroughs in product efficacy and brand unit price.

In the beauty industry, consumption downgrade still exists and is still happening. PROYA has seized this opportunity to challenge the status of international brands with a substitute strategy.

4. R&D is in a rush: Behind the glamour of marketing is the undercurrent of quality control.

Big companies, because they are so big, always experience both happiness and sorrow.

On May 8, the media unveiled the prelude to another storm: PROYA, the once-popular skincare brand, is now caught in a whirlpool of public opinion due to the failure of its sunscreen products. It is reported that the product involved, the popular "Feather Sense Sunscreen" with a monthly sales volume of more than 100,000, has been quietly removed from multiple platforms, just like the curtains on actors on stage were suddenly pulled down.

PROYA's explanation was understated: "The production process is difficult and there are differences in some batches of finished products." However, this statement did not quell the wave of doubts in the industry.

"The quality control problem actually reflects PROYA's negligence in controlling product quality," an industry insider pointed out. "In recent years, PROYA's marketing has been very aggressive, but its R&D investment seems to be insufficient. This incident is undoubtedly a wake-up call for it."

Indeed, when the "feather-feathering sunscreen" disappeared from major platforms, its trace could no longer be found in PROYA's Tmall flagship store, Xiaohongshu official store, and even Pinduoduo and JD's flagship stores.

Instead, PROYA has launched a return service through multiple channels, promising to return and refund even for products that have been opened and used, with the shipping costs borne by the brand. Is this a sincere apology or a helpless compromise?

Consumers have been complaining one after another. Some have reported that the texture of different batches of products varies, the content of physical sunscreens varies greatly, and they have developed skin problems after using them.

Some bloggers even posted the inspection report, directly pointing out that Proya was suspected of changing the content of ingredients without authorization. For a time, this sunscreen product seemed to have become a "thorn" in the hearts of consumers.

The clarification statement on PROYA's official Weibo account attempted to calm the storm, but the words "high difficulty in production process" revealed between the lines seem more like a pale excuse. Quality control is the foundation of a brand. Once it is shaken, the impact will be far-reaching. Companies need to make quick decisions and dig deep into internal problems to prevent repeating the same mistakes.

So, what exactly is the problem? Is it the overload of R&D technology, or is it a helpless choice under the pressure of marketing?

From 2018 to 2022, PROYA's R&D expenses were RMB 51.2509 million, RMB 74.6026 million, RMB 72.20 million, RMB 76.5837 million and RMB 128 million, respectively, and the corresponding R&D expense rates were 2.17%, 2.39%, 1.92%, 1.65% and 2%, respectively.

Written by Li Jiaman Edited by Yang Yong This article is written by the author of Operation Party [Hydrogen Consumption], WeChat public account: [Hydrogen Consumption], original/authorized to be published on Operation Party, and any reproduction without permission is prohibited.

The title image is from Unsplash, based on the CC0 protocol.