Perfect Diary, which is not even used by primary school students, can we play it again?

Perfect Diary, which was very popular in the past two years, seems to have lost its voice recently. This article analyzes the brand strategy of Perfect Diary in four stages over the past few years, deeply analyzes the marketing strategy characteristics of new consumer brands, and provides effective methodological guidance. At the same time, it analyzes the growth soil of the new traffic of Generation Z and new consumer brands, and provides forward-looking suggestions for new consumer brands. I hope it will be helpful to you who are concerned about brand marketing.

In June 2016, Huang Jinfeng, Chen Yuwen and Lv Jianhua, who had known each other for a long time, decided to do something together. The three co-founders immediately hit it off and named the company Perfect Diary.

In March 2017, the Perfect Diary brand was officially established and its Taobao store was launched at the same time.

In June 2018, by promoting content from KOLs and KOCs on Xiaohongshu, the company gradually developed popular products such as lipsticks and eye shadows, achieving rapid growth.

In January 2019, Perfect Diary opened its first store in Guangzhou Zhengjia Plaza

Today, Perfect Diary has completed the five-stage strategy of breaking out of the circle and going beyond the circle of new brands in four years:

• Market introduction stage: single product focus, large category, small track, high appearance
• Product promotion stage: KOL/C boost, extensive promotion, and user reach
• Brand out-of-circle stage: Internet celebrities promote hot products, niche out-of-circle
• Brand effect operation stage: public domain exposure + private domain operation, closing the site, unifying brand effect
• Brand promotion stage: advertising + public relations, the brand occupies the mind and becomes the first choice of consumers

1. Market introduction period: large categories, small market, high appearance

• Major category: cosmetics. In 2019, the growth rate of total retail sales of consumer goods in China ranked second, and the industry ceiling is high.
• Small track: Skin care VS makeup. The technical threshold of skin care is high, the user conversion cost is high, and the brand competition is fierce (Estee Lauder, Lancome, etc.). Foreign big brands are not focused enough and domestic brands do not have an expert image.
• High appearance: If you want customers to exclaim "Wow!" and be willing to stop and stay, you must rely on eye-catching packaging. Lipstick and eye shadow are particularly suitable for presenting product characteristics through beautiful pictures and short texts.
• New volume: From 2017 to the present, the scale of China's beauty market has increased from 358.1 billion yuan to nearly 453 billion yuan, with an annual growth rate of about 7%. From 2018 to 2019, the transaction amount of skin care products on Taobao and Tmall increased by only 33%, while the growth of cosmetics reached 40%.

2. Product promotion + brand: all in hot products

From the beginning of 2017, Perfect Diary did not adopt an omni-channel and multi-media approach to lay out content, but instead put all its resources into Xiaohongshu. Pyramid-style layout: including top and mid-level influencers, as well as passers-by and amateurs for large-scale placement (top influencers for product endorsement, mid-level influencers for large-scale promotion, and passers-by and amateurs for customer testimony). The lower the frequency of placement, the more budget there is. Taking Double 11 and 618 as an opportunity, all artillery firepower is concentrated on attacking one city gate.

At most, I received 10 advertisements in a month, 4 of which were from Perfect Diary. "Working with Perfect Diary is quick and hassle-free. They pay me directly without saying anything, which is very worry-free." - said a blogger on Xiaohongshu

Mainly divided into

• Celebrity (certified, such as Zhu Zhengting)
• Well-known KOL (with V certification, such as Li Jiaqi)
• Top influencers (number of fans > 500,000)
• Waist Expert (50,000 < Number of Fans < 500,000)
• Primary Talent (5,000 < Number of Fans < 50,000)
• Amateur (300<Number of fans<5,000)
• Passersby (less than 300 followers)

In July 2017, Perfect Diary was listed on Xiaohongshu

Starting from February 2018, Perfect Diary has arranged a large number of related grass-planting notes on Xiaohongshu to cooperate with the new cycle and important e-commerce nodes such as the Double 11 promotion and Double 12 promotion.

Perfect Diary's sales in June 2018 approached 50 million

During the 2018 Double 11 Shopping Festival, Perfect Diary became the top domestic beauty brand on Tmall. During this period, the search exposure related to the brand on Xiaohongshu increased 12 times.

During Tmall’s Double Eleven in 2020, Perfect Diary achieved sales of 600 million, becoming the number one in the beauty category;

In 2021, the official account of "Perfect Diary" on Xiaohongshu had about 1.92 million followers, over 3.68 million likes and collections, nearly 310,000 related notes, and had cooperated with nearly 15,000 KOCs.

In 2018 and 2019, Perfect Diary's marketing and promotion expenses accounted for 48.7% and 41.3% of its net income respectively. Among them, more than 15,000 beauty KOLs on platforms such as Xiaohongshu, Douyin, and Bilibili have become one of the largest expenditures among Perfect Diary's billions of marketing expenses.

Since 2018, brands such as MAC, Lancome, and YSL have successively launched Douyin and Xiaohongshu, and YSL has even started live streaming. According to data from CICC Research Institute, after launching new traffic sources such as Xiaohongshu, Douyin, and live streaming and starting to try to cooperate with grassroots KOLs, the sales growth of Shiseido, L'Oreal, and Estee Lauder in 2020 exceeded 60%, while Perfect Diary's sales growth in the same period was only 22%.

A new brand’s wild period mostly benefits from traffic dividends.

Today, more than 70% of Xiaohongshu's users are born after 1990, and more than 50% are born after 1995. Throughout 2020, they posted nearly 300 million notes on Xiaohongshu, generating 100 million searches per day. In 2021, the cost of seeding and recommending through KOLs and KOCs on Xiaohongshu has also risen sharply, and recommendations for beauty categories have increased by 13-18% compared to 2020.

3. Brand-effect operation stage: public domain + private domain, brand-effect integration

First build the shared domain and then the private domain. If you don’t invest in the shared domain, there will be no private domain, and if you only have the shared domain, the brand effect will be zero.

By placing large-scale KOL/C ads on Xiaohongshu and widely promoting products, Perfect Diary attracts more traffic-type purchasing users and then uses traffic platforms (official accounts: Perfect Diary, Perfect Diary Full Alliance, Perfect Diary Experience Store, mini programs: Official Flagship Store, Perfect Diary's Choice, Perfect Diary's Home) to accumulate traffic after the transaction, thus forming a traffic pool of 48 million that belongs to Perfect Diary itself.

Convert, repurchase and share traffic fans through discounts, free gifts, trial packages, etc.

At the same time, Perfect Diary has also established hundreds of personal accounts (Xiao Wanzi). These WeChat customer accounts use the Perfect Diary brand image as their IP and are operated by real people. While completing the service, they stratify, penetrate, repurchase and convert users.

4. Brand promotion stage: advertising + public relations, cross-border promotion

Brand is a particularly important thing for consumer goods. Whether your brand is formed or not depends on whether your brand is high-end or low-end in the eyes of consumers. Consumers’ demands and price acceptance are completely different.

For a hot-selling product, the significance of going viral is to be "seen", and the value of the brand lies in the mental traffic pool. Otherwise, "buying traffic and selling volume" will eventually become a zero-sum game.

According to the changes in the word cloud of Perfect Diary's official WeChat public account over the years, when Perfect Diary was first established in 2018, it was in the stage of creating explosive products, highlighting cost-effectiveness, and gradually transitioning to product words. In 2021, Perfect Diary's "exquisite", "fashionable", "high-end", "stunning", "innovative" and other emotional product adjectives appeared in the word cloud, while the word "cost-effectiveness" was still there, but the proportion began to shrink.

The proportion of Perfect Diary’s head, shoulders, waist, and tail KOLs:

• First half of 2020 2:4:22:75
• Second half of 2020 2:2:20:78
• First half of 2021 3:3:28:68

Brand start-up stage: mass coverage of mid- and low-end KOLs to promote brand penetration and popularity

Brand growth stage: Top KOLs help to improve brand favorability and elevate brand status

They have collaborated with the Discovery Channel to launch the Explorer 12-color eyeshadow palette, and with Li Jiaqi's dog Never to launch a cute pet palette, or they have chosen popular IPs with high audience recognition, such as Oreo, to achieve cross-border collaborations. In the first half of 2020, Perfect Diary's brand voice was 15.61% among men, and 84.39% among women.

In the first half of 2021, 20% of Perfect Diary’s brand voice came from men, while 80% came from women.

——Perfect Diary is working hard to break through the circle

It is important to remind you that brand building is a protracted war - advance layout, accumulation of strength, otherwise there will be a backlash effect of imbalance between brand and effect. The cost of traffic is always the lowest price at the moment. Especially for new consumer brands, brand is the bottleneck of sales growth. Sales of 300 million for new brands is a hurdle, breaking through 500 million is the key, and it is too late to go back and plan and build the brand when it reaches 1 billion.

The reconstruction of people, goods and places has brought new strategies to new brands: new consumption, new products, new traffic = new opportunities

New brands are emerging frequently, and old brands are struggling. The times never eliminate products, but the brands are iterated. Not only Perfect Diary, but also Ubras, Xiaoxiandun, Pop Mart, Whale Cloud, Santonban, and Yuanqi Forest, the five-stage strategy of new brands is concentrated on the logic and path of small and beautiful and traditional brands that are completely different. The biggest danger in turbulent times is not the turbulence itself, but still doing things with the logic of the past. The best way to foresee the future is to create the future - Drucker.

Traditional enterprises talk about 4Ps, namely product, price, channel and promotion. It seems that there are 4Ps, but in fact, the products that we are familiar with in the past 10 years only need to use 2Ps well to stand out and become famous. 1P is channel, which puts the product in front of consumers, and 1P is advertising, which makes more potential consumers know you. Wanglaoji, which is used to prevent getting angry, Red Bull, which is used when tired, Head & Shoulders, which is used to wash hair and remove dandruff, and of course Melatonin, which does not accept gifts.

Wanglaoji, Red Bull, Head & Shoulders, Melatonin, 10 years have passed, and the underlying business environment we are in has undergone earth-shaking changes - the deconstruction and reconstruction of people, goods and places. It is precisely in the reconstruction of people, goods and places that the new brands have broken through the current predicament.

5. New Concepts: The Post-80s Generation is Leaving the Stage, and Generation Z is Taking Charge

On the first day of the 2020 "Double 11", 357 new brands ranked first in Tmall's sub-categories in terms of sales. These include: Perfect Diary, which ranked first in the beauty category; Yuanqi Forest, which ranked first in Tmall's water beverage category; according to the CBNData "Report", consumers' attention to Chinese brands has increased from 38% to 70% in ten years.

Wahaha once launched a very-cola, trying to create a "Chinese cola", but it ended in failure. The story happened in 1998. Times have changed, and Generation Z has its own "Chinese Yuanqi Forest". If the roles were reversed, 10 years ago, Yuanqi Forest's consumer soil might not be so fertile and consumers might not be so confident. Now in 2021, a post-00s generation is unlikely to choose "last-generation drinks" such as Xiangpiaopiao.

How sad and optimistic this is - consuming beverages for young people is one of the ways for Generation Z to gain social recognition. When it comes to spending money, I want what I like, not what you like. Generation Z is rich and cute, and their consumer concepts influence the commercial breakthrough of new consumption, new brands and old products.

1. Emotion and rationality coexist, cost-effectiveness and appearance come first
2. Compared with advertising, they prefer word of mouth from friends and social recommendations
3. Willing to spend and pay a premium for interests, experience becomes the primary factor
4. More willing to try new brands and share consumption experiences

6. New products: shifting organizational capabilities from production-centric to user-demand-centric

Traditional brands often start from an internal perspective when it comes to product production. In other words, what resources the organization has to produce what products, and what technologies it has to produce what new products. Organizational resources/technology - R&D - design - production - distribution - channels - shelves - consumers. As the most important consumers, they are at the very end of the chain. This long chain, long channel, and long feedback chain bring great market risks to the organization.

New brands are demand-centric. They do not produce products based on what resources an organization has, but integrate resources and develop products based on user needs. Especially in the stage from 0 to 1 in the market, they pursue small steps, fast iteration, gradual optimization, and micro-innovation of products: concentrated in the "four new things". The common characteristics of the "four new things" are: heavy segmentation, single product verticalization, and niche explosion.

• Meeting new demands: Whale sweeping robot sales exceeded 200 million yuan;
• Innovative new categories: Xiaoxiandun’s online sales exceeded RMB 465 million, a year-on-year increase of 263%;
• Occupy new features: Ubras has emerged as a dark horse, with sales exceeding 300 million, becoming the number one underwear category;
• New packaging with good looks: Santonban Coffee achieved sales of 100 million;

7. New traffic: Channels are dead, long live traffic

The White Paper on the Psychology and Behavior of Mobile Phone Use by Post-95s shows that the post-95s use their mobile phones for 8.33 hours a day, of which social activities take up the longest time, nearly 2 hours. In contrast, the average daily TV on-time rate continues to drop significantly, and the daily on-time time is greatly shortened.

According to data released by TCL, affected by mobile terminals such as smartphones and tablets, the average daily TV power-on rate has dropped from 70% three years ago to 30%. People over 40 years old have become the mainstream group watching TV - the main consumers have triggered a qualitative shift in media habits.

With the iteration of media habits, the concept of the masses has been replaced by the niche, and the single form of channels has been disintegrated by media and content. From department stores, specialty stores, and franchise stores, which are single offline stores, to online multi-platforms and integrated media. The boundaries between channels, media, and content are becoming increasingly blurred. Channels are both media, and content is both channels.

Channels are dead, long live media. From Weibo in 2012, WeChat in 2016, Xiaohongshu in 2017, Douyin in 2018, to short videos, live broadcasts and video accounts in 2019, in March 2020, Taobao had 760 million monthly active users, Kuaishou had 470 million, and Douyin had more than 600 million. Media is the mother of new cognition, and new cognition is the new track for brands - old products can be remade based on new media.

8. Summary: New brands break through the three barriers

• 0-10 million: Focus on single products, all in media, and reach users at the origin
• 10 million to 100 million: Internet celebrities promote products, accelerate the popularity of products, and break through the circle
• 100 million to 1 billion: traffic operation, private domain conversion, and on-site closing

Author: Houshan Keju; Source public account: New Consumer Brand Research Society (ID: PPD6977)