Tmall Beauty will build one hundred new 100-million Rmb-level brands in three years.
"Tmall Beauty has exceeding its goal of doubling performance in three years." said Jiyun (Chen Xi), General Manager of Tmall Fast Moving Consumer Goods (FMCG) Business Division, at the 2021 Tmall Beauty Awards on April 14. Last year 3000 beauty brands opened Tmall stores, adding 100 million new Tmall FMCG consumers. These brands accumulated a total of 1 billion members and the customer unit price realized was 2-3 times higher than average. Tmall Beauty also unveiled new plans for 2021 and for the three years ahead: In 2021 2,000 new brands will enter Tmall, incubating twenty plus 100 million level Rmb brands, five to ten 10 billion level Rmb conglomerates and one hundred new 100 million level Rmb brands will be built in three years.△ Jiyun, General Manager of Tmall FMCG Business DivisionIn terms of the FMCG part, Tmall will create more than two hunderd new 100 million level Rmb brands, 1,000 new brands of sub-categories, and 50 new unicorn brands. What kind of beauty brand can be one of them?
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Seize the two tail winds / dividendsWhat is the biggest dividend of China's economy from the national level? Jiyun believes that there are two aspects: One is consumption, and the other is digitalization. First is reviving consumption. This is a track that will continue to work in the next 5 to 10 years, but it will definitely not function by simply sending consumers money and increasing the price of goods. Instead, it will evolve through building infrastructure and investment in new categories, new brands, providing new technologies and new experiences. Digital industrial upgrading is an important part of Alibaba's new strategy for the next 5 years. Specifically, the digitalization of operations will be driven on the business side, and the digitization of consumer experience will be fueled on the consumer side. Both ends will trigger huge dividends and continue to release momentum in the 10 years ahead. "In the consumer and retail sectors every digitalization will be accompanied by a consumer revolution and an explosion of productivity." Jiyun said, "The first digitization involves equipment represented by containers, which digitized the global supply chain, making global trade and worldwide production coordination possible. The second digitization involves bar codes, which led to the practice of digitalization and standardization of products, allowing hypermarkets and supermarkets to sweep the offline retail space. The third is the digitalization of credit cards, realizing automatic deposits and withdrawals, online use and digitalization of consumer wallets, raising the consumption cycle to two or three cycles, and also arousing a huge revolution to the whole industry. The fourth digitization involves personal computers. The efficiency of small and midsized enterprises has been greatly improved in the personal computer era. Then is the mobile technologies, which digitizes consumer behaviors and will even have a far-reaching impact on generations to come. Therefore, the digital economy will drive industrial upgrading in the future, which is in line with the development path of Tmall as well as Alibaba." From a general perspective only the beauty brands that follow the trends of consumer recovery and digitalization, and walk at the forefront will be eligible to enter the next stage of competition.
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What kind of beauty brand
can become a new-generation unicorn?The cutting-edge domestic beauty brands play an indispensable role in the achievements of Tmall Beauty in 2020. "The golden age of new domestic brands has come," said Dai Yusen, a partner of Zhen Fund. Perfect Diary, Florasis, Pop Mart, Genki Forest, Heytea, RamenTalk, Chicecream, To Summer... When we call these brands new species what is new about them?According to Dai Yusen, firstly these brands are innovative in categories. They have made a lot of disruptive upgrades in the existing categories. The new categories can meet the new needs of consumers and generate new supplies. Secondly, innovations have also been showcased in the design, and incorporated with unique brand spirit, stimulating consumers' desire to buy. Thirdly, the marketing mode has changed a lot, from using abstract graphic written text to more direct and vivid live streaming and short videos, greatly improving the efficiency. The emergence of Taobao live-streamers like Li Jiaqi serve as wings to brand marketing. Fourthly, operating methods have also changed a lot. In the past the most common promotion was "Buy for half price and then receive additional credits.". At present, the personalized operation of private traffic enables the brand to form a better communication channel with consumers and establish a closer connection. How can a new brand can be widely known? There are two key paths - brands must have both a beautiful visual presentation and a deep internal brand spirit. Typical examples are makeup brands Florasis and FlowerKnows.In addition, the novelty of new species is manifested in systems and data capabilities. The front-end marketing and communication between a brand and consumers, the analysis of consumers in the middle, and the connection of the back-end chain necessitate a powerful middle-office system. "Perfect Diary has hundreds of software engineers engaging in mid-office systems, a precedent for brand supply. Equipped with the wings of data and systems, the brand has now evolved into a genuine new species.", Dai Yusen said.
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Six major changes by Tmall BeautyAfter understanding the two trends of consumption and digitalization the Tmall FMCG segment, including Tmall Beauty, will make major changes in six areas to embrace the new consumption era and better serve brands. · The understanding of supply has changed: In the past, it only referred to goods. Nowadays, in addition to a strong supply chain of products at the supply chain level, there is also a strong content supply chain and a strong service supply chain. · Emphasize the concept of global supply: On the premise that China is a huge market of 1.4 billion people in which there are huge differences in consumption concepts, consumption levels and consumption preferences, the global category planning is the most important port for Tmall FMCG to release dividends this year. Based on different price bands, different groups of people, and different regions, the supply will be divided in more detail and more growth areas will be found so that merchants and brands can find their own growth tracks in those areas. Some examples are concepts of "trend category" and "super ingredient". · There will be three new kinds of brands in the future: The first kind is the fast-growing emerging brands on the investment track, as represented by Perfect Diary and HF. The second kind is Internet celebrity brands, which grow based on content dividends. The third is Costumer to Business and Customer to Manufacturer brands, with the most potential and opportunities in the future as they make full use of the consumer dividends brought by the Internet to quickly transform consumer needs into their own products, while catering to consumers' specific needs, scenarios, and pain points. Tmall FMCG marketing rules will be divided into three tracks: · On the first track is price concession, including direct reductions, naked prices, discounts, discounts when spending enough, coupons, etc., which actually directly affect prices.· On the second track is gift giveaways, including buying A to get A, buying A to get B, and member-exclusive gifts.· On the third track is For Members Only, such as member exclusive gifts, member exclusive rights, and member points. Jiyun revealed that the rules will be released in May. III. Customer group upgrade · First, there will be more customer groups incremental growth. The incremental growth come from vertical, cross-category, offline and submerging groups.· Second is about investment and operation of customer groups. At present Tmall remains the channel with the lowest acquisition cost for new customers among all channels. IV. Private domain traffic Private domain traffic is the biggest dividend this year. Jiyun said that Tmall will open its private domain on an "unprecedented scale" around May 30. · The first step will be the diversion to stores. There will be a lot of traffic, including public domain searches and recommendations, redirecting traffic back to the stores.· Second step is "private transfer to public". Private domain operation indicators, including repurchase, user experience, and Average Revenue Per User will impact the distribution of public domain traffic. V. Shopping guide consultation In the past when all Taobao consumers browsed the page, if they did not initiate it the customer service could not take the initiative to talk to them. However, according to Jiyun, things will be completely different in May of this year - for the top merchants, the first batch of merchants participating in the pilot test, the customer service will see which members are currently browsing on which page, and can initiate a dialogue anytime and anywhere transfer the strategy of offline shopping guidance and consultation to online. The health management applet jointly developed by Tmall Beauty and DAMO Academy will be launched soon. The first application field is oral health, which will bring the intelligent detection of oral health to the front desk, allowing businesses to effectively interact with consumers and consumers can deliver information of their teeth to the backstage through photographs and video angles. In the background doctors and AI programs will make diagnoses and recommend relevant contents, products and services. "After going online, this applet will overturn Tmall's business model of only selling products. In the future doctors, offline clinics and service organizations will be able to connect with 800 million consumers on Tmall via this line.", Jiyun said. During 618 this year Tmall Beauty will greatly expand the channel of store self-live-streaming. Based on the original channels, including search and recommendation, we will try our best to direct the streaming to store self-live-streaming. Meanwhile, the short video still plays a vital role in the future of brands. At present Tmall Beauty is making a deep investment through Guangguang (browsing), aiming to create a short-video expert ecology and use this ecology to leverage the production of short videos and content, thereby reinforcing the influencing effect of recommendations and the duration of stay of the consumers.
