In opening the new brand line of Zhuhai Beyond Cosmetics, there is a need to develop exact strategies according to market research data initially. In accordance with a 2023 report from iResearch, the size of China’s functional skincare market has been 126 billion yuan, and its average annual growth rate has been 19.2%. Among which, anti-aging products occupy 38%, and sensitive skin repair products have increased by 27%. Zhuhai Beyond Cosmetics is able to lean on the success experience of Estee Lauder’s “Little Brown Bottle” series. Backed by an investment budget of 15% (around 45 million yuan) in research and development, it is capable of developing an anti-aging essence containing 5% hyaluronic acid and 2% ergothiocyanine. According to the lab test, the wrinkle reduction rate after 28 days is 21.3%. It follows the ISO 16128 standard for natural ingredients. For the supply chain, according to Zhuhai Free Trade Zone policies, the cost of raw material purchasing can be reduced by 12%. Along with the automatic filling equipment (with a productivity of 3,600 bottles per hour), the production cycle can be reduced from 90 days to 45 days. Using L ‘Oreal’s 2022 renovation of the Guangzhou factory as an example, 99.2% yield rate and 18% less energy consumption have been achieved.
The marketing end needs to incorporate digital tools to enhance conversion efficiency. According to QuestMobile data, the number of beauty notes on Xiaohongshu interaction increased by 34% year-on-year. Zhuhai Beyond Cosmetics can reach 120 million users by collaborating with 5,000 Kols (with a 15% commission for top Kols and 8% for mid-to-tail Kols) and launching 3,000 review contents. Referring to Peraera’s “Double Antibody Essence” strategy in 2023, ROI can reach 1:4.7. The e-commerce channel took the “TMALL New Product Incubation Program “, investing 2 million yuan to obtain platform traffic support. The first month GMV target exceeded 18 million yuan. The CPS commission sharing model (20% base commission rate + level rewards) was utilized to motivate 2,000 distributors. Watsons has also penetrated 5,000 offline stores and achieved a 75% distribution rate within three months through the “buy one get one free” strategy (with a gross profit margin still at 62%). Based on Winona’s 2021 strategy of developing its offline channels, the monthly average sales of one store can be as high as 43,000 yuan.
Risk management needs to be conducted at all times throughout the whole process. Based on the filing data in 2022 by the National Medical Products Administration, the average time taken for registration of a new cosmetic product is 126 days. Zhuhai Beyond Cosmetics should spend 8% of the budget (around 9.6 million yuan) on compliance tests. It has 53 indexes such as acute eye irritation test (in accordance with OECD 405) and heavy metal residue (Pb ≤10ppm). For supply chain finance, basing on the cooperation mode between Huaxi Biotech and raw material suppliers, taking the model of 30% advance payment + 60-day payment term, cash flow turnover rate can be increased to 2.8 times a year. On the user operation side, 1.5 million private domain users were accumulated through Enterprise wechat. Combined with the RFM model, a 6-level membership system was divided. The repurchase rate of Platinum members, whose annual consumption is ≥5,000 yuan, was 58%. Referring to the private domain growth case of Lin Qingxuan in 2023, the average transaction value could be improved by 26%. Lastly, through the dynamic pricing approach (198-398 yuan for the low-end model and 658-1,280 yuan for the high-end line), the revenue target of 430 million yuan was achieved within 18 months, and the net profit rate of 22.7% was expected to achieve the level of the industry’s top-notch enterprise.