The genuine alliance of the upstart of the vertical electric dealer

According to Chen Au, CEO and co-founder of the cosmetics industry, the current gross margin of the cosmetic electric business is roughly around 20%. And the cosmetics industry's gross profit margin between 30% to 60%, l ' oreal Group in the first half of the gross profit margin of 71%, domestic cosmetics business giant Shanghai Home (600315, shares bar) in the last two years gross margin of about 50%.

From 20% to 50%, cosmetics dealers ' websites are eyeing "active adventures" from "lively". And the original sin of the initial period deeply troubled the industry's practitioners, Chen Au admits: "A start-up enterprise on the first day can not all the goods are brand, because there is no strength." ”

From savage growth to respect for the brand, China's cosmetics vertical Electric Dealer website is on the road to a white wash, though the road is extremely difficult.

Genuine Alliance

On this year's Women's Day, Poly-Mei excellent products United Paris l ' oreal, Homoserine, Shiseido, such as brands, channels, jointly signed in Beijing, "China cosmetics electric Dealers Genuine Alliance self-discipline proposal", in the proposal, the representatives said will resolutely resist the fake sale leave; , resolutely resist vicious competition between channels, slander each other, and resolutely resist the brand that does not act as a product of selling fake goods.

It was a deliberate counterattack.

Before long, the best products in the industry's most direct competitor Lok Bee Network issued a white paper on cosmetics industry, in the white paper in Le Bee network to sell cosmetics authentic price of the lower limit for the counter price of 70 percent or so, and hinted that the United States excellent product sales leave. The last day of February, by Taobao, Hunan Satellite TV together to build the electric business website Hey Amoy Network general manager Sun Zhenkun through the long micro-bo form, shelling Poly beauty products "fakes, parallel imports of the road," and said "the road is different, not to seek." Sun Zhenkun in micro-blog review of their own and poly-Mei Excellent product CEO Chen Au Dinner of the past, dinner Chen Au had hoped through Hunan TV "more Amoy more Happy" column to promote the will, but was the customer service Manager of the block, the reason is poly-mei excellent products "fakes, parallel imports" rampant. At the same time, Sun Zhenkun also borrowed "colleagues" of the words of the beauty of the product quality, said "EU" more fire, the younger sister paper more suffer "," bad and bad expulsion of good currency. "

Chen Au said that if you want to make the industry better, you must respect the brand: "Poly beautiful products are very willing to respect and maintain the brand system, because cosmetics more emotional spirit of the appeal, and not just raw material costs." The reason for the establishment of the genuine alliance, but also hope that the industry become more orderly and more respect for brand. If the goods or from the unknown channel to take goods, it will be brand value and channel value damage, but also let consumers lose trust in this industry. "and Chen Au also said that the genuine alliance does not point to sex, the future hope that more of the electronic business site can join the genuine alliance, so that the entire industry healthy and orderly development."

Chen Au also hinted that if a power provider did not obey the rules, perhaps in the future will be branded by the joint crackdown: "The biggest role of the alliance is to standardize the industry, if there are channels for their own development, do not respect the brand, through the fleeing goods or unknown goods to play a price war, the entire league may be war with them." Poly-Mei Excellent products are very unpopular with the consumer is not responsible for the brand. ”

The original sin of the profession

Cosmetics to scale, Taobao is second only to women's and men's third-largest category. According to Eric's statistics, in 2011, China's cosmetics online shopping scale amounted to 37.26 billion yuan, in the overall proportion of the net purchase of 4.86%. Cosmetics on Taobao more than 200,000 sellers, independent businesses are also a few. This is because the cosmetics have a single product volume is small, customer unit price moderate, high degree of standardization, high repurchase rate, short demand cycle, variety of species, such as rapid replacement characteristics, is very suitable for the sale of electric dealers.

But an embarrassing set of figures reveals the dilemma behind the boom, which, according to Iris, has already had more than 20% penetration in Chinese cosmetics, while Euromonitor, the information consultancy, says retail sales from the Internet account for only 3.1% of China's total cosmetics sales. Why is there so much difference between Eric and Euromonitor's statistics? Excluding the error of statistic itself, the difference can reflect the "original sin" of cosmetics electric dealer.

The traditional retail industry statistics channel Sales, the brand is the official channel statistics of the water as prevail. And the electric dealer in the statistics sales, the direct selection of the dealer retail terminal sales. Only the sales of the regular channels into e-commerce will be the traditional statistics into e-commerce channels.

This data makes Chinese cosmetics dealers face two awkward answers, either by acknowledging the distribution of the channels or by admitting that the following single number directly replaces sales. Now it looks like both of them exist.

This may be related to the properties of cosmetics, and other traditional retail industries, cosmetics are difficult to directly distinguish between true and false, brand only with the relatively closed circulation channels that brand dealers counter the way to protect themselves. In addition, the electric dealer through the low discount to the brand will not only cause damage to the offline market is also a fatal impact. Therefore, large brands are unwilling or small supply to the line, and has been attributed to the rapid elimination of cosmetics but often need to supplement the goods. At present, there are three factors restricting the development of the domestic market of cosmetics manufacturers: first, the supply chain of cosmetics suppliers is not perfect, most of them do not have a stable supply chain system; Second, most consumers are still skeptical of cosmetics dealers; third, the International cosmetics brand attitude is negative, To maintain their own brand image of domestic online cosmetics sales restrictions authorized, refused to supply.

But the market for cosmetics manufacturers have a huge demand, tens of billions of per year online sales are not decimal. Supply imbalance led to the early stage of cosmetics in the field of goods, parallel imports, fakes rampant, which constitutes the cosmetics industry's "Original sin."

In addition, cosmetics itself is a lucrative industry. Some people joked that the production cost of cosmetics can be negligible, the rate of increase over 10 times times. Brand promotion and channel costs in cosmetics prices accounted for, has been high, so the brand to channel and price control than other goods more stringent, desire is more intense. This leads to cosmetic online channel pricing power is weak, the profit is not guaranteed. According to the market, Deputy cosmetics brand's gross margin between 10% to 20%.

This makes many electric dealers take risks.

Last November 23, Shanghai Industrial and commercial official Weibo released a message that the Pudong industrial and commercial administration according to the report clues to the Kangqiao area of a sale of fake dens for surprise inspection, on the spot suspected of counterfeit European Shu Dan hand Cream 2568. It is reported that the operator from the field of purchase, and then through the network of the way to buy foreign sales, the price of "58 Yuan 6", cheated a lot of keen on the Internet to buy low-cost goods users.

According to the industry to introduce high-end cosmetics themselves very little discounts, only counters and brand direct licensing and operation of the brand shop is the most secure way. And for ultra-low prices to sell cosmetics shop may exist in the following kinds of purchase channels: one, not the counter authentic, but cosmetics sample or sample, these products through the counter sales staff, or channel middlemen to the electricity business; second, overseas purchasing, but this price is generally not less than 60 percent.

The more terrible is the cost of cosmetics, which is not new in the industry. Some electric business enterprises after getting the original cosmetics, often 1:5, or even 1:9 of the proportion of dilution, and then the half-truths into the production of "fake bottles" in order to profiteering.

"Wash the white" is not the end

Cosmetics electric business is not an isolated case, any industry from barbaric growth to normative development must have a process. In the barren market, the rapid growth of the cosmetics industry is also bound to their own "original sin" to wash the white, to fight for brand licensing, development of its own brand, transformation platform, these are able to allow the cosmetics vertical electric operators to survive for a long time.

Thankfully, the cosmetics industry also needs a vertical electric dealer.

February 28, the world's largest cosmetics company issued a 2012-year earnings in Shanghai, the company's 2012 sales in China amounted to 12.05 billion yuan, an increase of 12.4%.

L ' Oreal said the company's future development strategy is to open up three or four-line cities. On the one hand high-end cosmetics channels continue to sink, on the other hand the channel will focus on E-commerce. In fact, the current brand of L ' Oreal, Kiehl, and so on have opened an independent official shopping mall. At the same time, L ' oreal is also on-line more than the brand collection of shopping sites luxury Yan Mei. Its brand Eskin is currently only online sales, the new series of muscle research launched 100% Digital marketing for the first time. L ' oreal data show that in the past two years, its performance in the field of E-commerce has doubled the growth rate.

In fact, not only is L ' oreal, Procter and Gamble, Unilever and other Japanese giants, the domestic cosmetics giant Shanghai home, etc. are increasing the input of e-commerce channels.

Since 2007, as the world's third largest cosmetics market, the Chinese cosmetics (skin care products) market to the speed of about 15% per year development, 2011 broke through the 200 billion yuan mark. Among them, the 2011 cosmetics net purchase size amounted to 37.26 billion yuan, an increase of 66.6%. China E-commerce Research Center data show that 2012, cosmetics net purchase volume accounted for about 21.9% of the total cosmetics retail sales. 2008 ~2012 year, cosmetics net purchase volume accounted for the total cosmetics retail sales increased from 4.6% to 21.9%. It is expected that by 2015, the size of the cosmetics net purchase transaction will exceed 120 billion yuan.

But vertical dealers don't get too excited, and more powerful players are entering. Some large integrated business shopping malls such as Beijing-east, when, shop 1th, Amazon has opened cosmetics channels. BEIJING-East Cosmetics 2009 on line, to June 2010, the Beijing-East announced cosmetics monthly sales have exceeded tens of millions of dollars, growth is rapid.

But Chen Au that there is room for cosmetic vertical electric dealers to survive, and that Poly-Mei products are not currently considered to be sold like other vertical electric dealers: "Any platform can survive as long as it provides value." Many group buying companies didn't do well because they didn't have real value. For the United States, the value provided is not just the price. ”

More need cosmetics vertical electric quotient is concerned, the biggest problem of online cosmetics is not directly to give consumers experience, this is never avoid the short plate.