By ZHOU Fangying
During a live-streamed sales event, China's leading live-streamer and e-commerce influencer, "Lipstick King" Austin Li Jiaqi, found himself drowning in controversy.
While introducing a product from the brand Huaxizi, a viewer commented that the product was "too expensive." An apparently annoyed Li suggested it wasn't the product that was at fault, but the viewer, who was advised to work harder if she wanted nice stuff. The anger was immediate, and Li, once more, found himself in need of consumers' forgiveness.
How much is too much?
But does Li have a point? Or are some things just too expensive? Is price really a major concern for consumers?
Prices, as we know, tend to rise. Nothing is as cheap, or as good, as it was back in the day. Brands like Proya, Winona, and global giants like P&G, and Estée Lauder have all raised their prices, and no one cares very much.
Consumption choices and criteria vary, and every brand must establish its own position and price. There is no obligation on either side for every consumer to embrace every brand, and the very idea defeats the whole concept of a brand.
But there is a lot of suspicion surrounding high prices among domestic beauty brands. Just five years ago, domestic brands were relatively unknown and cheap. Such an incident would have been unthinkable.
Back then, most domestic brands were "affordable alternatives" and "cost-effective." With recognition in recent years, came the move upmarket. However, consumers remain rooted in the low-price phase, a phase they had very few complaints about, but which seems now to be a thing of the past.
E-commerce is not the answer
Domestic beauty brands are collapsing on e-commerce platforms. They made up about half of sales in 2019, and that's down to about a fifth now.
It's not that there is anything especially wrong with domestic cosmetics, simply that international giants play this game very skillfully and have adapted to the Chinese market more quickly than the market has adapted to them.
Domestic brands are now cutting the prices of old products and introducing high-priced new ones. But when big players start cutting prices, new brands don't have the cash to compete.
Popular local products
However, this doesn't mean that all domestic beauty brands are doomed. Some brands have continued to grow, particularly in the skincare sector. Proya and Botanee, two local beauty companies, have done well.
Proya and Botanee have ambitious plans for overseas markets. Proya's revenue of 2.5 billion yuan (US$340 billion), trails only Shanghai Jahwa, China’s time-honored beauty group. Botanee, founded in 2010, made over 5 billion yuan in 2022.
The common theme is the creation of popular products. For Proya, it's their Double Effect Brightening Essence and Ruby Essence, while Botanee specializes in sensitive skin care under the brand Winona. However, both brands operate within the mid-to-low-end price range, ranging from 200 yuan to 600 yuan.
