L'oreal Personally Comes To Power Trader: Do Not Let Middlemen Earn The Difference?

At the moment, some seemingly unimportant, but actually the pulse of thousands of miles of change, is quietly occurring in the Chinese electricity supplier industry.

According to anecdotal reports, a number of local cosmetics companies are recruiting troops to set up their own electronic business teams, eager to get their own brand flagship store's operation rights from the generation operators. It seems that they should bypass the intermediaries to play the business in person.

In July 16th, Maybelline flagship store, which had 8 million 250 thousand fans, ended the 8 year's drifting day. The main business of the shop was changed from the Limited by Share Ltd of the generation operator Shanghai beauty makeup cosmetics Limited by Share Ltd to the Suzhou branch of the parent company L'OREAL group.

"This day is still coming," said a TP operator's head of business. "This is the inevitable result."

Tmall shop only needs to pay 200 yuan for technical service charge, but behind this area of 200 yuan, it is implicated in a trend that is accelerating.

　　 Changes in behalf of operators

Time returned to 8 years ago, August 11, 2011, 6:58 p.m. 01 seconds, Maybelline flagship store officially launched.

At that time, "Taobao open year", also known as Taobao mall Tmall has shown the attraction of merchants. Under the guidance of the platform open policy, in the year 2011, Taobao mall entered 40 thousand brands, and the total number of brands reached more than 70 thousand.

This round of rapid growth in the number of merchants has also spawned the prosperity of downstream operators. The leaders of this industry, such as Hangzhou Yok, Hangzhou one net one Chuang, Shanghai beauty beauty makeup, Guangzhou's feather ministers, and so on, are in the 2010 to 2012 years. They have been able to run the electricity supplier's business through international brands such as cosmetics, health products, mother and baby.

Beauty makeup has maintained long-term cooperation with L'OREAL group. Apart from Maybelline, Lancome, Paris L'OREAL and other brands Tmall's flagship store is also running by its hand, but in its more than 60 brands, Maybelline's performance is the most prominent.

In 2016, Maybelline flagship store sales amounted to about 157 million yuan, up to two times in 2018, and ranked ten in the ten largest brand store of beauty beauty cosmetics. In 2018, it brought more than 470 million yuan of sales revenue to beauty beauty makeup, accounting for 13.08% of its total sales.

Over the past few years, L'OREAL's electricity business has maintained a two digit growth rate. It has made great contributions to the beauty of beauty. L'OREAL has also supported the financial statements of IPO's beauty make-up. In 2018, Maybelline, Lancome and Paris L'OREAL's three stores brought more than 20% of their sales revenue. However, the operation rights of these three stores have been recovered by L'OREAL group.

Once achieved each other, now one another two wide. Why do brands and operators share weal and woe?

　 L'OREAL business change

L'OREAL's return to Maybelline flagship store operation rights has released a clear signal: the branding merchants began to roll up their sleeves and start their own business.

Related to another detail, L'OREAL group's brand Tmall shops have undergone changes in operation in July.

In July 11th, L'OREAL's official flagship store and L'OREAL's official flagship store were changed from Guangzhou Baicu Electronic Technology Co., Ltd. to L'OREAL (China) Co., Ltd. Suzhou branch.

In July 12th, the main body of Lancome flagship store was also changed to L'OREAL (China) limited by Guangzhou Baike Electronic Technology Co., Ltd.

In July 26th, Biotherm flagship store operator was changed from Guangzhou Baike Electronic Technology Co., Ltd. to L'OREAL (China) Co., Ltd. Guangdong branch.

In July 29th, the flagship store of Saint Laurent was changed from Guangzhou Baike Electronic Technology Co., Ltd. to L'OREAL (China) Co., Ltd. Guangdong branch.

Guangzhou 100 library was established in 2009, relying on the electricity supplier generation operation started, the first single business came from the United States mask, in 2013, the United States was holding 400 million yuan in the bag. In 2014, after the acquisition of the us holding company by L'OREAL group, Guangzhou hundred stores became the L'OREAL electricity supplier operation center, and began to provide one-stop "online sales overall solution" for L'OREAL group's brands. L'OREAL group recovered from L'OREAL's flagship store and Lancome flagship store in 2018, once handed over to Guangzhou 100 stores.

After a year, L'OREAL group is now changing its flagship store brand again. It appears to be a comprehensive carding of its own electricity supplier operation system. In fact, the intention of this action is becoming clearer. The world's largest cosmetics group is making efforts to digitize, straighten out the online channel relationship, so as to clear up the roadblocks for the digital strategy.

"Digitalization is not cherry on cake".

In 2018, L'OREAL group gained 26 billion 900 million euros in sales revenue, 11% of which came from e-commerce channels, and its online sales grew by an astonishing 40.6% over the same period. This has made it the best financial year in ten years.

L'OREAL 2018 earnings

"This first owes to e-commerce, whose coverage has now extended beyond traditional distribution, especially in emerging economies." "Even in the remotest parts of the world, it is easy to find, share beauty and buy products online," said L'OREAL Group Chairman and CEO. Nowadays, digitalization has become a powerful accelerator for cosmetics.

In the first half of 2019, L'OREAL sales exceeded 14 billion 800 million euros, of which 31.2% contributed by the Asia Pacific market, the Asia Pacific market grew by 30.4% over the same period last year, and sales exceeded 4 billion 600 million euros, mainly driven by Chinese consumers, especially the rapid development of e-commerce channels.

L'OREAL Group Chairman and CEO an Gong said, "digitization is not a cherry on the cake, but a cake itself."

L'OREAL group has opened many brand flagship stores on Tmall. The biggest pain has always been that the brands are fighting for themselves and the form is not working together. After last year's Alibaba launched the 88VIP, L'OREAL was greatly inspired. "In the new era, we need to control the business from a human point of view, and seize the high value crowd." Alvin, director of operations of L'OREAL's consumer goods department, revealed that last year, with the assistance of Ali, L'OREAL opened its four flagship store, realizing the interoperability and integration of consumers.

In this way, "flagship stores with high consumption power and high conversion potential can be drained into three other flagship stores, and customers who buy Ladies' skin care in flagship stores can buy men's products for their boyfriends or husbands in three other stores through single action."

You can imagine that if there is no electricity supplier running smoothly and smoothly, all this will be impossible.

Challenges and opportunities brought by digitalization

If you want to taste the digital cake, it's so important that you can't hand to others.

Ten years ago, the most effective way for multinational brands to enter Tmall was to entrust the shops to professional third party operators. Now, multinational brands are entering China, Tmall is the first stop, and they have to act in person, and the third party operators are standing aside.

For example, ALDI, who just landed in Shanghai, opened its flagship store in Tmall in 2017. The main body of operation was the company (Costco), and the Costco immediately entered China.

In the past, offline is the center of gravity, the line is supplemented, to the third party operation, is to make room for resources, concentrate on the online horse racing enclosure; now, online has become the focus of growth, online and offline inventory, continue to operate by the third party obviously can not work.

Take L'OREAL for example. With the acceleration of digital strategy, cooperation with ALI is bound to rise to the group level. The digital docking between group and group, Ali has its own business operation system to export, L'OREAL naturally needs its own interface.

Ten years ago, for multinational companies like L'OREAL, the third party business operators solved a series of trivial problems such as commodity sales, marketing, store operation and so on. These hard work, hard work and miscellaneous work are the third party operators' value.

Today, big companies are coming out in person. Operators need to ask themselves, "what is my core competitive advantage"?