Little Red Book Invested in Its First Beauty Brand!

Dewy Lab, a makeup brand that focuses on clean beauty, recently completed a Pre-A round of financing. Among investors there is Little Red Book. As the first beauty brand invested in by Little Red Book, what are the advantages of Dewy Lab?

What trends are hottest in the global beauty market? Clean Beauty has long been the consensus. When the opportunity arrived countless brands took advantage of the momentum to become wind chasers, and even the content recommendation social platform Little Red Book also entered the game.

Recently, the local clean beauty brand Dewy Lab announced the completion of a 10 million-USD dollar Pre-A round of financing, led by China Growth Capital and followed by Little Red Book. As the first beauty brand invested in by Little Red Book, which has "strong recommendation power" for beauty, Dewy Lab has attracted the attention of the industry.

01

Spotlight on “Clean Beauty” 

Three rounds of financing in one year

Dewy Lab is a makeup brand, and its products include "Dewy Lab Stardust Brow Styling Gel", "Dewy Lab Morning Mist Setting Powder", “Dewy Lab Morning Dew Cream Foundation" and so on. Positioned as a clean beauty brand, Dewy Lab focuses on "clean ingredients" and "excellent makeup effects" makeup products. 

It is reported that since Dewy Lab was launched in January of last year, it has completed three rounds of financing: seed round, angel round and Pre-A round. Investors include China Growth Capital, Little Red Book, Qixi Investment, etc. Dewy Lab is the first cosmetics brand invested in by Little Red Book. 

Official data shows that after the launch of Dewy Lab products, the monthly sales of self-operated channels reached 5 million yuan in half a year. In November 2021 the promotion exceeded 10 million yuan, and in December it continued to exceed 10 million. It has now formed a matrix of three major items: cream foundation, concealer and loose powder. In November the sales of single products exceeded 2 million yuan; the main customers were women aged 25-35, and the unit price was stable at 200+ yuan.

According to the official website of Tian Yan Cha, the Dewy Lab brand belongs to Shanghai Da wei Science and Technology Development Co., Ltd.. The company was established in March 2020, the registered capital is about 1.78 million yuan, and the legal representative is Zhou Hui. The enterprise was once named Hangzhou De Wei Shan Zai Science and Technology Development Co., Ltd.. The business scope includes internet sales, cosmetics retail, cosmetics wholesale, sanitary ware sales, personal hygiene products sales, arts and crafts and collectibles retail, daily necessities sales, chemical products sales, etc.

Shareholder information shows that the company's legal representative and Chairman Zhou Hui holds about 51% of the shares of Dewy Lab, and the Shanghai Wei Wei Enterprise Management Partnership (Limited Partnership), which is chaired by Zhou Hui, holds about 15% of the shares of Dewy Lab. Seed round investor Qixi Investment holds about 14% of the shares, Nanjing Luyong Jinhang Equity Investment Management Partnership, a subsidiary of China Growth Capital, holds about 10% of the shares, while Little Red Book Technology Co., Ltd. holds only about 3% of the shares of Dewy Lab.

Under the background of the pandemic, China's young emerging beauty & makeup crowd is paying more and more attention to the concept of environmental protection and sustainability. In particular, the increase in awareness of safe cosmetic ingredients has promoted the rise of "clean beauty".

CBNData and The Oriental Beauty Valley jointly released the "2020 Oriental Beauty Valley Blue Book (Cosmetics Industry)". The data shows that at present, when health and safety issues are more focused, the Clean Beauty concept of "no harmful ingredients, zero harm, and non-toxic" is accepted by more people. Tmall data shows that during the 618 period last year, the essence, mask, cleansing, makeup removal and other subdivisions under the Tmall International Clean Beauty category increased by more than 100% year over year.

Mintel's survey found that 77% of Chinese consumers believe that clean beauty products are safer than ordinary beauty products; 82% of Chinese urban consumers believe that product safety is the most important purchasing consideration. More than 80% of Chinese urban consumers believe that clean beauty products have higher research and development standards. In terms of product effect, the effect of clean beauty is recognized by more than 60% of consumers.

The reason why Dewy Lab is favored by capital is because it is precisely riding the tailwind of clean beauty.

02

Jump Out of the Red Sea of Low-Price Competition,

Consumers Provide Mixed Reviews 

At present, the definition of clean beauty concept in China includes four aspects: harmless ingredients with zero additives, environmental friendly and zero harm, animal friendly and zero cruelty, and sustainable environmental protection and zero waste.

Overall the domestic clean beauty market, in terms of single brands and the overall market volume, still needs to grow and expand. However, under the strong consumer demands many parties are expanding the clean beauty market, and the explosive growth of this blue ocean market is just around the corner.

In addition to riding the tailwind, what else does Dewy Lab rely on to attract capital?

First, Clean beauty has just emerged, and there is no absolute top brand in the market segments.

At present clean beauty in the Chinese market is a blue ocean, and an absolute head brand has not yet appeared. At the same time, due to the maturity of foreign markets, clean beauty has leapt into the 2.0 era in the Chinese market. In categories such as makeup removal, skin care, base makeup, makeup, and wash & care, brands that focus on market segments have emerged. In the makeup and base makeup segments, Dewy Lab is expected to stand out.

Second, Dewy Lab's pricing is on the high-end side, which is different from those of the affordable new emerging cutting-edge makeup brands.

According to the Dewy Lab Tmall flagship store, the sales of base makeup products such as concealer and cream foundation are relatively high. The monthly sales of concealer reached more than 10,000 pieces, and the unit price of various products ranged from 75 yuan to 359 yuan. This is in stark contrast to the current popular new emerging cutting-edge makeup brands Perfect Diary, JUDYDOLL, INTO YOU, etc. that are positioned at affordable prices. Dewy Lab is filling the gap in local high-end cutting-edge makeup brand products to a certain extent.

For consumers "price is expensive" is also one of the impressions of many people on Dewy Lab. For example, one of Dewy Lab's star products, the makeup setting powder, on Tmall is currently priced at 199 yuan, and the product content is 7g. Some consumers compare Cosme Decorte’s setting powder with Dewy Lab’s setting powder. The official price of Cosme Decorte’s setting powder is 380 yuan for 20g, which is equivalent to 1g for 19 yuan. 1g of Dewy Lab’s setting powder is about 28 yuan.

This is also the reason why Dewy Lab has attracted many consumers. After all, consumers who have seen 30 yuan of blush and 99 yuan of base makeup products for many years will also want to try something new.

Overall, consumers have mixed reviews of Dewy Lab.  The CBO reporter searched for Dewy Lab keywords on the Little Red Book and found that many bloggers commented on the brand, and the overall evaluation was mixed.

The praise for the products mainly focused on the use effects of cream foundation and lip glaze, the high adaptability for sensitive skin, the relatively safe ingredients, and the absence of fragrance. The criticism is mostly about the details of the packaging material, the inconvenience of packaging use, and the quality of the concealer brush.

Due to the high pricing and the lack of brand value premiums, because Dewy Lab is just starting out, consumers' expectations for Dewy Lab may be higher than those of makeup brands that are positioned as affordable.

A consumer who has purchased Dewy Lab setting powder told the Cosmetics Business Online (CBO) reporter, "At the beginning I read a lot of bloggers recommendations to buy it, and some even said that it is as good as NAS loose powder. With great expectations, after using it, I found that the makeup effect and texture were not as 'magical' as the Internet said, and, with some disappointment, I resold it on the Idle Fish."

After Perfect Diary and Florasis, can another top brand stand out in new emerging cutting edge makeup field? Dewy Lab is obviously riding the big tailwind, but the capital alone is not enough. Given the new generation consumer demands moving from "acceptable" to "excellent", for the next top brand the concept, efficacy, design and packaging of the brand can no longer follow the foreign concepts. It is necessary to lead in all directions in order to seize the minds of Chinese consumers.