In the post-Li Jiaqi era, how can Taobao beauty products revive?

This article deeply analyzes how Taobao beauty brands can achieve regeneration through innovative marketing strategies and private domain operations in the post-live broadcast era when the influence of super-head beauty anchors such as Li Jiaqi has weakened. From skit marketing to membership system, from DTC model to product innovation, this article reveals to readers how beauty brands can survive in the new e-commerce environment.

Huang Ruo prophetically said ten years ago that successful cosmetics brands in the future would carry Internet genes, which is a low-cost trial and error strategy.

At that time, he thought that without the Internet, Herborist and Magic Mask would not have been able to reach such a wide range of users in such a short time. However, he also worriedly mentioned that whether these brands would be evergreen or short-lived depends on their operation. Poor operation may also accelerate the decline of the brand. These are the two sides of the coin.

This old e-commerce person who was once in charge of Taobao's B2C business has come true. The crisis suffered by Huaxizi and the fall of Perfect Diary from the altar are all cases that indirectly illustrate the subtle role of the Internet on brands.

But they had no choice. Ten years ago, under the catalysis of the Internet, cosmetics brands entered an era of acceleration without much thought.

Taobao Tmall is the original base for the development of beauty brands, and it is also a subject that Taobao has always been good at. The earliest beauty brands on Taobao, Afu Essential Oil, Yu Nifang, and Mo Fa Shi Jia, have gained a place in the beauty field through Taobao.

For brands at that time, online promotions were the "college entrance exam" that determined the fate of the brand, and it was also a life-and-death battle for the category sprint. In 2009, Afu Essential Oils opened an "online flagship store" on Taobao, and "Online Afu" almost had its "birthday" in the same year as Double 11.

At that time, participating in a Double 11 shopping festival, a brand’s sales could reach ten times the usual level just by discounts and promotions. To this day, online promotions are still of great significance to beauty brands.

From counters to online, this is a complete change in the operation thinking of beauty brands. It is a problem for brands and even more so for platforms.

01 How to play beauty in the post-live broadcast era

The 618 in 2024 is a 618 in the post-live streaming era, a 618 that even Li Jiaqi said was "difficult".

Li Jiaqi's live broadcast room was launched as early as May 19. According to data from Qingyan Intelligence, on that day, the GMV (total sales volume) of the beauty category in Li Jiaqi's live broadcast room exceeded 2.675 billion yuan, a year-on-year decrease of 46%. Last year on June 18, the GMV of the first beauty pre-sale in Li Jiaqi's live broadcast room was about 4.977 billion yuan. The data was almost halved.

In fact, 2022 was an important turning point. At that time, Li Jiaqi and Wei Ya were caught in a storm, and they both missed the 618 promotion for the first time. You know, in 2022 and the years before, the super head live broadcast room has always been an important battlefield for the beauty category. After 2022, Wei Ya never appeared in the live broadcast room again, and the effect of Taobao's top anchors gradually weakened.

However, looking at the entire platform, this year's 618 does not seem to be that bad.

Also from Qingyan's data, in May, Taobao Tmall's beauty sales (the final transaction amount after deducting returns) increased by 69.2% year-on-year and 40.9% month-on-month, ranking first in growth rate among mainstream e-commerce platforms.

The contradiction between the decline in the data of the super-head live broadcast room and the increase in the platform data has formed a gap that needs to be explained. This means that Taobao beauty has different solutions in marketing and operation mechanisms.

The biggest difference from previous years is that short plays have become a hot direction for beauty brands to bet on this year. Taobao Guangguang launched 618 themed brand customized short plays on the theater channel, including "Daddy's Alliance" supported by L'Oreal and "Working Boss" sponsored by PROYA. As of now, the short plays on the theater channel are still being updated.

The exposure advantage of short dramas allows brands to place ads more accurately and bring more sales. A short drama screenwriter interviewed by the self-media Yiyuguancha mentioned, "Short dramas are like the earliest live e-commerce. For brands, only the first to try it out has a greater chance of success. User demand and time are limited. Short dramas are equivalent to dividing up the time of the live broadcast room and reshaping it horizontally."

In addition to the new marketing changes brought about by the short drama, this year's 618 brands paid more attention to customer repurchase and retention, and tapped into greater value from private domains and existing stocks.

For example, Lancôme offers Rose Card members (members who have purchased any formal wear products) an official event through which they can receive 500 points in stores. The points can be used to exchange for gifts and are valid until September 30. In the past, big brands rarely took such actions, especially since interactive points and consumption points were separated from each other and not integrated.

In addition to Lancome, more and more big brands are sticking to the popular mechanism of "repurchase by new and old customers - gifts" to increase customer return rate.

Beauty brands attach great importance to the operation of private domain inventory, as reflected in the increase in brand repurchase rate caused by Taobao store broadcast and 88VIP membership last year. Store broadcast is a new type of live broadcast method initiated by brands. It does not need to rely on the celebrity effect, but it is not a mechanical customer service live broadcast. It needs to have both the content attributes of expert live broadcast and the product and service attributes of traditional shelves.

In the field of store broadcasting, beauty products also continue to lead the way. During the Double 11 shopping festival last year, the sales of beauty products in brand stores doubled within one hour. Among them, the growth rates of Estee Lauder, La Mer, and L’Oreal’s official flagship stores all more than doubled, and the growth rate of Clé de Peau Beauté’s official flagship store exceeded 7 times.

88VIP members are also helping. This year, 88VIP coupons were issued in advance during the 618 shopping festival, and large-value beauty coupons were also issued in greater numbers. The purpose is to attract new and old users with spending power.

Entering the era of live streaming by experts, whether it is redeeming points for gifts, repeat purchase gifts, store broadcasts or member discounts, they are all diversified efforts made by the platform to match people and products.

02 From “Taobao Brand” to “Broadcast Brand”

Before the super-head live streaming channel was formed and had a significant impact on the beauty category, Taobao and Tmall had always been the breeding ground for beauty brands from 0 to 1. It was just that they had experienced the transition from Taobao brands to live streaming brands.

Around 2010, a group of first-generation beauty brands exploded online, such as Yu Ni Fang, Mo Fa Shi Jia, and A Fu. By 2012, the total number of Taobao brands had grown to 122, of which more than 10 were beauty brands. Around 2012, Taobao Mall was renamed Tmall, and these brands were renamed "Tmall Originals".

It is incredible that beauty brands can be successfully nurtured online. At that time, old domestic brands such as Chando and Olay had not yet entered the online channel, and offline counters were their stronghold.

After entering Taobao, these first-generation Taobao brands received a great deal of resources from the platform, including traffic, brand promotion, and low-price discounts. With the help of the big channel bonus of Taobao's large ecosystem at the time, these brands started from scratch on Taobao and quickly gained popularity.

The founder of Afu Essential Oil, "Diao Ye" Meng Xing, later said that in a narrow sense, Afu is not a "Taobao brand" because Afu only entered Taobao after it had hundreds of offline stores and has never obtained the official certified "Taobao brand" qualification; but in a broad sense, Afu is definitely considered a (Taobao brand) because it benefited from the huge wave of dividends from Taobao and was able to overtake others and become the number one in the essential oil category.

In addition, other representative brands at that stage included Yu Nifang, which later even became a listed company.

The heyday of this batch of beauty brands on Taobao lasted until 2015, when beauty brands led by Yunifang, Afu, and Mofashijia were all among the top ten sales in the beauty category on Tmall's Double 11.

In 2014, Tmall began its "globalization" transformation, and the platform's traffic focus shifted. For Taobao brands, the bonus period ended. They encountered development bottlenecks one after another, so they chose to "leave Taobao" collectively. However, due to over-reliance on a single platform, the Internet's accelerated maturity, and the lack of mature offline entity operations and supply chain management experience, few were successful.

Then, they faced a new challenge: the era of live broadcasting.

A group of new beauty brands, represented by Perfect Diary and Huaxizi, have found a new way to play e-commerce - using top influencers to live broadcast and sell goods, connecting with users in a short period of time and quickly increasing sales.

Founded in 2017, Huaxizi is deeply connected with Taobao's top anchor Li Jiaqi. With the help of the huge traffic of the top anchor and the new channel advantages, it became popular almost overnight. In 2019, Li Jiaqi successfully made Huaxizi's air powder and carved lipstick into two hot products with the huge traffic of the live broadcast room. In 2021, Huaxizi's total sales reached 5.4 billion yuan, and it is considered the "light of domestic products."

Perfect Diary became famous by leveraging the traffic strategies of top bloggers, celebrities, and KOL/KOC. In 2019, the founder of Afu lamented that "compared with brands like Perfect Diary, which was established less than three years ago, we are too inferior... because this brand is aiming for 3 billion in sales this year."

However, the flowering period of this wave of "broadcast brands" is also short. Because of the failure to balance the relationship between marketing, brand, product and price, Huaxizi and Perfect Diary have been in a dilemma of declining revenue and profits since 2022. In 2023, the live broadcast accident of Li Jiaqi and Huaxizi directly exposed the hidden dangers of being deeply bound to the celebrity effect.

Whether it is Taobao brands such as Afu and Yunifang, or online brands such as Huaxizi and Perfect Diary, they have quickly become popular with the help of e-commerce platforms and influencers, but they all face the same dilemma, that is, whether they have the ability to survive independently without the platform.

03 How to maintain fertility?

If we say that from "Taobao brands" to "Bo brands", all brands have gained momentum with the help of channels and traffic dividends, for Taobao, in an era when traffic has peaked and channels are diversified, whether it has the system capabilities to nurture brands has become a normalized issue.

Especially in the past two years, consumers' consumption decisions have become calm and rational. In the past, it was difficult for traffic brands such as Huaxizi and Perfect Diary to form long-term stable repurchase power. Creating more sticky brands and products that can solve substantive problems has become a problem that platforms have to think about and face in the long run.

The first is the change in thinking and methodology. In 2022, Taobao and Tmall launched the DTC business model to empower brands and help them achieve the transformation from "seeking traffic externally" to "seeking efficiency internally". In particular, the change in industry operation thinking - upgrading the crowd assets based on brands in the past to crowd assets based on commodities.

The most efficient way to penetrate is to create a big single product through product innovation. Finally, Tmall formed Tmall TMIC, Tmall U-first, and Tmall Heybox to form a complete chain from new product R&D incubation to new product testing and promotion.

L’Oréal Paris has used this link to create many popular products in both cosmetics and skincare. For example, the “Zero Point Cream”, the first C2B collaboration between the two parties, sold over 100,000 units on the day of its launch, breaking the single-day sales record for creams on Tmall.

The problems faced by local brands are even more severe. In 2023, Yunifang's monthly sales on Tmall were only one-tenth of those two years ago, down more than 80% year-on-year from 2021. The sales of Perfect Diary and Huaxizi are also not optimistic.

There are also local niche brands that have grown against the trend. For example, a skincare brand called Zhiben has increased its monthly sales from 10 to 20 million yuan in 2020 to 40 to 50 million yuan in 2023 because of its focus on product efficacy and ingredients and affordable prices.

On Double Eleven in 2023, with limited growth in cosmetics sales on Tmall, Tmall achieved sales of 245 million yuan, a year-on-year increase of 13%.

In-depth research on Zhiben's popularity shows that in addition to its initial positioning as an ingredient-oriented brand and its emphasis on skin barrier repair, some people speculate that Zhiben hit the mark in Tmall's adjustment of its traffic algorithm, increasing the weight of search recommendations. If a large number of consumers actively search, Zhiben will be able to obtain traffic recommendations within the Tmall system.

For a platform, the distribution of traffic may determine the fate of a brand, and the platform that is more familiar with this is TikTok, which is better at stimulating and converting users who "originally did not have a strong desire to shop."

Whether in terms of marketing ability or low-price ability, content e-commerce brings more certain growth to brands. Therefore, whether it is clothing or beauty, Douyin and Taobao are in a two-horse showdown. This situation will continue for a long time in the future.