By ZHU Yongling
Luzhou Laojiao, one of China’s biggest baijiu makers, is set to launch a “Baijiu Beauty” series, featuring facial masks, shower gel and shampoo. Facial masks start at 198 yuan (US$28) for 10 pieces.
This is not the company’s first foray into the beauty industry, previously collaborating with other brands on perfumes and masks.
Not just a pretty face
Luzhou Laojiao is going it alone this time, with baijiu residue derivatives as the core ingredient. It remains to be seen whether Luzhou Laojiao is truly committed to entering the beauty industry or whether the move is just a short-term marketing stunt. Nothing is to be found on social media or e-commerce platforms.
Beauty products have attracted many liquor and pharmaceutical companies who wish to monetize excess raw materials and bi-products via the cosmetics industry. Similarity in R&D at source somewhat reduces barriers to the beauty industry.
Compared to the long cycles and high investment of drug development, beauty products offer a quick return on investment.
All in the mind
For example, Winona, incubated by a pharmaceutical company, helped raise its parent company’s skincare revenue from 7.9 billion yuan in 2017 to 45.6 billion yuan in 2022. Similarly, Pien Tze Huang, an established pharmaceutical company, saw cosmetics revenue increase from 1.7 billion yuan in 2017 to 6.3 billion yuan in 2022.
However, most struggle to make an impact, arriving at the beauty business with a marketing or experimental mindset rather than a strategic one, without the intention of long-term investment. If the expected market response is lukewarm, ideas are quickly forgotten.
Dabblers like Luzhou Laojiao, with no compelling motivation to delve into a new area with a smaller profit margin than their main business, tend to remain on the sidelines.
Making it work
Product development means packaging design, marketing and handling a fickle customer base, which is the norm for the beauty industry.
Opportunities still exist. For the entire beauty industry, their research and development expertise and new materials accumulated upstream might bring new opportunities.
For companies viewing cross-industry beauty endeavors more as a marketing tactic, social media attention may be their only objective.
