Can Li Jiaqi Make His Own Beauty Brand?

Every net red has a brand dream.
At the 2019 pioneering week and Global Entrepreneurship Week in Shanghai, Li Jiaqi, the famous domestic beauty blogger and known as "lipstick", gave a public speech to investors and entrepreneurs for the first time. In his speech, he said that China's beauty market is very large, far from being satisfied. In developed countries, cosmetics and skincare are 1:1 in the beauty market, while in China, the proportion of make-up market is still very large.
"My ultimate dream is to be a beauty brand of Li Jiaqi, not a net red brand, but a world-renowned brand of new domestic products."
It is no surprise that Li Jiaqi wants to build his own brand. In the past eleven months, Li Jiaqi has been searching for hot spots every few days. Now he has 13 million 230 thousand fans on Taobao's live broadcast, more than 11 million 230 thousand of Taobao's live broadcast of a sister, and more than 35 million of her fans.
In fact, according to the fashion business flash, citing sources, Li Jiaqi's personal brand is likely to be in the process of preparation. In March of this year, Li Jiaqi has set up a Agel Ecommerce Ltd in Shanghai, which covers clothing, bags, shoes and hats, cosmetics and so on. The largest shareholder is the online service platform ONE, Li Jiaqi and the second largest shareholder of the company, holding 49%.
In the 2 hours before 2016, 20 thousand brands of personal lipsticks were sold in Big hours in 2016, and Fenty Beauty and Kylie Jenner Kylie of Rihanna were set up as examples. Now that Li Jiaqi, who is strong enough to call large numbers, can not avoid taking the path of creating personal brand.
From the recent trend, Taobao broadcast is still the main business of Li Jiaqi. However, there is a clear demand for the time and effort of live broadcasting for net red investment, which has led to widespread doubts about the sustainability of the net red life cycle. Therefore, Li Jiaqi's next step is to seek transformation, and the motion of Tucao conference shows that he is developing towards stardom.
Cosmetic business is a strong marketing attribute. Star influence and fans are the biggest gold signboards that create the beauty makeup brand, which has been repeatedly demonstrated worldwide. Just a week ago, after nearly half a year's sawing, Coty group finally got the black horse in the new beauty makeup brand, and bought the Kylie Jenner personal beauty brand Kylie Cosmetics 51% shares for 600 million US dollars. The transaction will be completed in the third quarter of fiscal 2020. Some analysts pointed out that the transaction reached Kylie Cosmetics's overall valuation is close to 1 billion 200 million U.S. dollars.
Coty group finally got its wish to buy Kylie Cosmetics 51% shares for $600 million.
Kylie Cosmetics directly benefited from the fan base of Kylie Jenner. The latter's 151 million fans on Instagram promoted the sales of Kylie Cosmetics to 420 million dollars in just a year and a half, rewriting the commercial rules of the beauty industry, and Kylie Jenner became the youngest self-made billionaire in history, with assets exceeding 1 billion dollars.
And Kylie Cosmetics's biggest competitor, Fenty Beauty, created by singer Rihanna, is also the same business logic. Rihanna has 77 million fans on Instagram and enjoys a high reputation worldwide. In 2016, LVMH group's beauty incubator KENDO helped Rihanna invest $10 million to launch Fenty Beauty, which has grown into hundreds of millions of dollars in just a few years. KENDO was founded by David Suliteanu in 2010, and its color make-up business includes Kat Von D Beauty, Marc Jacobs Beauty, Formula Formula, Von, and cable.
Besides the rival Kylie Comestics and Fenty Beauty, beauty makeup brands launched by professional makeup artists are also popular. The famous brand makeup artist Charlotte Tilbury launched the famous brand name lipstick, makeup and other star products, and won the support of Vc firm Sequoia Capital in 2017.
Estee Lauder had earlier offered to buy Charlotte Tilbury for $1 billion.
According to the 2018 financial year performance report released by Charlotte Tilbury, its sales rose 34% to 100 million 900 thousand pounds in the same period, the first time to break through 100 million pounds, and after tax net profit was 3 million 500 thousand pounds. It is noteworthy that Estee Lauder group had offered $1 billion to buy Charlotte Tilbury earlier, but the target price of the brand was US $1 billion 400 million.
The personal brand launched by legendary makeup artist Pat McGrath has also become a high-end beauty brand in just 3 years. In 2018, the brand gained the equity investment of Eurazeo Brands, Eurazeo's consumer goods investment department of France investment company, which amounted to 60 million US dollars. According to industry sources, the Pat McGrath Labs brand value in the transaction exceeded $1 billion. It is noteworthy that Pat McGrath just announced in November 8th that the personal make-up brand was officially stationed in the Chinese market.
Pat McGrath has a very high position in the cosmetics industry. Its personal brand has recently announced its entry into the Chinese market.
From the above two ways, Li Jiaqi's role is between Rihanna, Kylie Jenner, and Charlotte Tilbury and Pat McGrath professional makeup artists.
Li Jiaqi was born in 1992 and graduated from dance. By chance, L'OREAL has become a front desk makeup artist. In October 2016, L'OREAL promoted new projects in the Chinese market, hoping that BA could be transformed into KOL in social media. Li Jiaqi took the opportunity to participate in the "BA network redness" star KOL selection scheme, becoming one of the first training programs, and began Taobao live broadcast in February 2017.
Li Jiaqi's personal resume determines that he is not only the fans of net red fans, but also has the professional accumulation of make-up artists through the years of counter beauty evaluation and consumer communication experience. Not long ago, the "no stick pot direct seeding rollover incident" may also be a warning to Li Jiaqi. It is very risky for endorsement in the field of non experience, but in the field of beauty, he always has the right to speak.
In the rapid development of the Chinese market, Li Jiaqi also reflects the complex characteristics of net red iteration. On the one hand, Li Jiaqi coerced Zhang Dayi's generation of net red people and flow attributes. On the other hand, because Li Jiaqi is taking the new media of live broadcast by electronic commerce, taking "taking goods" as his main business, he is not going to launch his own image as a product like traditional fashion bloggers. Good anchor is to make the recommended products the leading role. But the introduction of personal brand is the opposite logic.
Ever since it became famous, Li Jiaqi has been tied up with lipstick labels and is known as "lipstick." The natural lip condition and the constant innovation and evaluation made him create a record of 15 thousand Lipsticks in 5 minutes. Taking advantage of the Chinese female consumers' enthusiasm for lipstick, Li Jiaqi became the intermediary of consumer trust.
GQ's survivor Li Jiaqi: a man turns into algorithms and wants to go back to man. This article introduces the company's original plan to help Li Jiaqi plan a lipstick theme exhibition. "The lipstick exhibition has been made. In the studio of the artist, the curator plays PPT on one page. Most of the slides are lipstick images: Lipstick photos, lipstick themed Mega devices, lipstick, lipstick, lipstick... " How can we say this exhibition? Someone said, "I can't see where Li Jiaqi is."
Whether Li Jiaqi's excellent sales personnel can also become a product talent is the most concern of the industry. Apart from the exaggerated slogans such as "OMG", "buy it", "all girls", what exactly is Li Jiaqi's personal style and what is the product representing Li Jiaqi's personal style will become a problem that Li Jiaqi can't get around on the road of creating personal brand for a long time.
In July this year, Wu Yue, President of LVMH group Greater China, invited Li Jiaqi to have a talk to reflect the importance of LVMH for digital innovation. Li Jiaqi talked about several aspects, including consumer oriented, consumer responsibility, creating an excellent brand experience is more important than selling itself, by sharing brand stories to increase consumer stickiness, and from the product to brand management in all aspects of innovation. To a certain extent, Li Jiaqi has been more standing in the brand position, observing the industry from the brand thinking, which is also the foundation for his own brand creation.
He also stressed in 2019 Entrepreneurship Week that he hoped to create a net red brand. This implies that countless Li Jiaqi understands the importance of product research and development to the beauty brand, and what he wants to do is not to label Li Jiaqi's name but no characteristic foundry standard product, but to match the international brand. Li Jiaqi also said in an interview with GQ, "I want to go to all the shopping malls in the future, and I will also see my own brand, with Estee Lauder and Chanel."
Although a large number of net red and cosmetic brands have eaten a lot of market share in a short time, the disadvantages are obvious. Net red brand follows the pattern that the beauty makeup brand incubator is responsible for R & D, and net red is responsible for promotion. Kylie Jenner's Kylie Cosmetics follows the pattern before the acquisition is supported by Seed Beauty, the beauty brand incubator. It is called "fast fashion" in beauty makeup.
But when the brand enters a stable period, many problems follow. According to the New York post, sales of the brand in Ulta Beauty were not ideal after the US cosmetics retailer Ulta Beauty became the exclusive partner retailer of Kylie Cosmetics last November. According to the website Rakuten data specifically tracking online shopping, between June 2016 and May 2019, about 60% of consumers who bought the brand Cosmetics and Ulta.com consumed only one brand. Consumers who had tried to purchase Kylie Cosmetics products in recent months had almost no repurchase program. The data of the consumers who bought Kylie Cosmetics only bought the brand once.
Two years ago, the growth rate of Kylie Cosmetics has slowed down in the two years before Coty's purchase. Sales rose only 9% to 360 million dollars last year. Cooperation with Ulta Beauty was intended to further enhance the market share of the brand, but the situation did not seem to be as good as expected.
After the short-term consumption boom, Kylie Cosmetics has to start to face the real brand management problem. According to Rakuten data, by the end of November 2018, the company's online revenue has dropped by 62%. Some analysts believe that the decline in revenue is mainly due to the fact that Kylie Cosmetics can not maintain customer loyalty and consumers are losing. A large number of consumers began to complain about bad customer service, refund policy and order confusion.
If we want to achieve sustainable development, we will have to enter the stage of industrialization, specialization and capitalization. From LVMH endorsement Fenty Beauty to Coty endorsement of Kylie Cosmetics, if the net red beauty makeup brand is not willing to leave in the short term, it seems that it has finally returned to the beauty giant.
Kylie Cosmetics needs a capital and a more professional team to make the brand better commercialized. Coty group in the acquisition of Kylie Cosmetics issued a statement that the future will further build Kylie Cosmetics into a global strong beauty brand to attract more young consumers, Kylie Jenner will continue to monitor products and responsible for the formulation of strategic planning, and is expected that the transaction in the next three years will contribute to the group's core perfume, cosmetics and skin care business contributed 1% growth.
The beauty make-up brand, represented by perfect diary, is rising rapidly.
For Li Jiaqi, who wants to build the brand of "new national product", he also needs to find a reliable beauty giant or an OEM factory. China is still a skin care market, not the beauty market. Although the cosmetic brand is facing huge market space, the competitiveness of supply chain is not as large as that of skin care.
However, the global make-up OEM giant has been targeting China's fast-growing beauty market in recent years, increasing its investment in the Chinese market. According to product view network, the OEM group, which serves 40% of the global high-end cosmetics brands, entered the Chinese market in 2003. It has set up 3 subsidiaries in Suzhou and Shanghai, and has established a complete industrial chain for R & D and production. This industry cluster is only distributed in Italy, a local company.
Since the end of 2016, the company started third factories in China. It is also the first professional production base of cosmetics in China. It has been completed in Shanghai with an annual capacity of 250 million. In 2017, the amount of lipstick orders increased by more than 30%. Analysts believe that the proportion of skincare and make-up in the Chinese market is about 7:3. With the help of Chinese make-up, the proportion of the future may become 6:4 or even 5:5.
In addition, Shanghai, Chen Chen, Shanghai Chuang yuan, Shanghai Paris Ti, Suzhou ante and other local cosmetics OEM enterprises have also grown and are mostly located in the vicinity of Shanghai, where Li Jiaqi is located, making it easier for them to build a fast response supply chain.
More importantly, Li Jiaqi's beauty brand certainly needs to write a complete commercial script, including how to expand its market outside its personal influence, and steady growth through reasonable financing rhythm.
Mary de Jia, perfect diary, HEDONE, VNK and other domestic cosmetics brands have gained the praise of the beauty bloggers in recent years. Most of them rely on the growth strategy of Internet thinking and the explosive products to make the cake of the national market bigger and bigger. The perfect diary, known as "the light of domestic goods", has received a new round of financing, valued at more than 1 billion dollars. In just 8 months, the sales volume of the perfect diary has increased by nearly 50 times, not only pushing Chinese goods colleagues, but also catching up with YSL and SK-II. In 2018, the perfect diary was only 650 million yuan in Tmall's GMV.
At the moment when Zhang Dayi's ringing bell in Nasdaq, New York, Wang Hong's imagination was expanded unprecedentedly. When Li Jiaqi pointed out the target of "new national brand", he obviously saw a bigger business picture.
But the most urgent question at the moment is still what Li Jiaqi represents. Li Jiaqi = lipstick? This is far from enough.