Many sequelae caused by a rapidly expanding brand running blindfolded on an emerging hot track.
Editor’s note: This article is from the micro-channel public number “Career Company” (ID: shangjiezz), Author: Tan Asia, edit: Zhou Chunlin.
This is a popular beauty brand that is soaring. Since 2012, a small and fresh beauty store has been opened everywhere in the lively pedestrian streets of China’s first- and second-tier cities.
Photo by Tan Ya
This is another brand that closes stores in batches in a short period of time. Five years later, in 2017, it seemed that the original stores were constantly changing their signs overnight. Innisfree, a popular Korean cosmetics brand that was once fully topical in the domestic beauty industry, is in a difficult business situation.
“Although it is still working hard to retain the’youth’, it is already a bit’old’ for young consumers.” A researcher on a beauty platform analyzed to a reporter from “Business” and compared with domestic beauty makeup , Its response is not fast enough, and its adjustment is not flexible enough; compared with European, American and Japanese brands, its market strategy, product positioning, R&D and design are not absolutely competitive.
The big stores that have created expansion myths within 5 years are no longer there. This person who seized the blank space of popular Korean makeup and was “the leader”, after experiencing the “THAAD incident” and the “restricted Korean order”, was beaten by the bullwhip of the market and lost his sniper ability.
At the beginning of March this year, the popular idol Fan Chengcheng, who was holding a bottle of “Black Tea Repair Essence” in high-profile appearance, was officially declared as the new brand spokesperson for Innisfree in China. A few days ago, the brand used various methods to warm up in advance to create momentum for the product positioning of new products “youth” and “vitality”, and tried their best to introduce users to the brand’s Tmall flagship store. There are various signs that this brand, which relies on the crazy offline brand store to tell the rise of the brand, has entered the era of “entity embracing new retail” with a high profile.
At its peak, it achieved sales of 4 billion yuan in the Chinese market and opened hundreds of stores in first- and second-tier cities. It is undeniable that it was successful in the first half, and it was once regarded as a successful business sample by many people.
In just 5 years, this popular beauty brand, which originated in South Korea, emerged from the Chinese market and staged a grand narrative in the beauty industry. But it is only the “part one” of a story.
Behind the rapid “rise building”, it is actually a game and a dream-I thought I found the golden key to open the door to the new world, but unexpectedly misunderstood “the whole▲In Yueshi Fengyin store, the shopping guide is assisting consumers to choose products Photo by Tan Ya
Innisfree’s parent company, Amore Pacific, is Korea’s No. 1 beauty group, with a rich matrix of brands targeting high, middle and low grades. Prior to this, the higher-end “sister brands” Sulwhasoo and Laneige, etc., have taken the lead to come to China, focusing on traditional channels.
Before and after 2010, commercial shopping centers in mainland China ushered in a period of rapid development, and beauty and skin care brands quickly became standard on the first floor of the mall. However, several Korean brands that take the high-end route are in the same space as strong competitors such as Europe, America, and Japan, and it is difficult to stand out.
However, as the craze for Korean dramas has become an important carrier of cultural output, the Korean beauty group has entered the “golden age” since its deployment in overseas markets. Some local beauty brands keenly seized the opportunity to find a shortcut to brand marketing.
In 2013, in the popular Korean drama “My Love from the Star”, Jeon Ji-hyun played a “famous scene” of various beauty products to make up, quickly went out of the circle and entered the field of public opinion and was sought after The object of imitation.
The “Korean tide” that has swept the Chinese market for several years has become the material for many brands to tell new brand stories. There is no shortage of brand and product capabilities. First Beauty Group Amorepacific has no reason not to pull the trigger of fate. Before that, what it has to do is to find the “gun”.
This major decision was made in 2011~2012. At that time, the domestic beauty industry market was prosperous, and big European and American brands tried their best to seize the golden counter on the first floor of the mall. At that time, the big names were still unable to get rid of the indiscriminate bombardment of advertising and marketing. The reputation of competing brands relied on the “money ability.” Only Korean makeup brands have accumulated a large number of fans in the Chinese market without any effort.
In the end, Innisfree became the popular brand that was selected to enter the Chinese market. At that time, in the eyes of Amorepacific, Innisfree was the “most preferred” in terms of brand positioning, price band or market strategy.
02 Dangerous shortcuts
The eye-catching “green plant wall” has become a standard feature of the store. The simple and fresh appearance makes it easy to stand out in the jungle of colorful and complex commercial signs, giving people a strong sense of intimacy.
Without any promotion, it focuses on the concept of natural skin care. The products are displayed according to functions in the spacious and bright store. Customers can quickly and conveniently find the products they need… At that time, Innisfree’s strategy for opening a store was simple and clear: let customers as much as possible “Wander around”. Relying on the “natural raw materials of Jeju Island” and the strong scientific research capabilities of Korea’s No.1 Beauty Group, these two “selling points” are sufficient to save the company a large amount of marketing expenses driven by the strategy of a single-brand store.
Innisfree has reprimanded for opening off-street stores, intending to intercept customers before entering the mall, which is a differentiation in channel selection. But behaving like this, inIn the eyes of some brand beauty agents, it is tantamount to “adventure.” “Dare to open a single brand store in the most expensive locations in first-tier cities”, industry insiders believe that this brand from South Korea is “a little bold” when it comes to newcomers.
On the streets where every inch of land and money are available, Innisfree quickly became the focus of discussion in the industry by relying on brand effect and product strength.
The design style of the store is unique. The soft and bright lighting in the store exposes the neatly arranged skin care and beauty products to passers-by through the transparent glass porch. While the industry is still discussing the channel innovation of Innisfree, the feedback from consumers is directed at the core of the physical offline store to attract customers: to achieve the ultimate experience.
The existence of these “infrastructure supporting facilities” that seem to belong to offline entities today is equivalent to great innovation and advanced exploration 10 years ago when Internet e-commerce platforms only started. And this also laid a deep foreshadowing for the implementation of Innisfree’s larger plan.
At that time, it was the beginning of various e-commerce platforms. People were cultivating the habit of buying beauty and skin care products online, and most of them were still regular visitors to the major cosmetics counters on the first floor of the mall.
“I feel that there is finally a store that understands us,” a beauty consumer said in an interview with a reporter from “Business”. Women who buy cosmetics value the consumption atmosphere. These customers who are always looked at by the cabinet sisters suddenly It is found that stores with a better experience and more choices but not expensive have finally appeared.
Customers are attracted by the appearance and stay longer. Many positive feedbacks made Innisfree affirmed its thinking: Although there is no stone to cross the river by touching it, he can become that “stone”.
Since then, Innisfree has opened its stores and made a big leap forward. According to statistics, from 2012 to 2014, it opened 100 stores in China, and entered second- and third-tier cities from the first-tier coastal areas at a rate of 100 new stores each year. In the consumer’s impression, its image has long been closely linked with that iconic green plant.
In 2015, Innisfree’s annual sales in China reached 1 billion yuan, and both sales performance and operating profit showed a rapid upward trend. Beautiful data and fast-established brand effects have transformed it from a waist sub-brand of its parent company into a synonym for “Korean popular beauty” in the Chinese market.
At the same time, using single-brand stores, Innisfree’s powerful offline physical retail scene has the conditions for in-depth emotional communication with target users, and it quickly finds the best “shortcut” to pry out users’ minds.
This once triggered a heated discussion in the industry. The sales/communication model that can display the brand without “making the price difference” without intermediate channels can greatly improve efficiency in terms of R&D and design, manufacturing and after-sales feedback. “Innisfree combined the brand with the single-brand store format. At that time, it happened to formulate the most ideal market formula, which was equivalent to finding a shortcut to success.” An industry insider close to the brand analyzedWeighed.
At this point, Innisfree, who has leapt into the gods, thinks that his Chinese “pass through” game is very smooth, and is also expected to open a new era of Korean makeup. It should be noted that any scale based on a non-sustainable development model is a mirage. After the initial test results of Innisfree, in order to demonstrate the brand synergy, it chose to rapidly expand and open stores.
A larger net is spread out.
03 Turn around hard
The peak of Innisfree’s performance in China appeared in 2017, and the turning point also occurred in this year-the seemingly solid base camp and rapidly expanding stores have since entered a downward spiral.
The brand strategy has gradually entered a “stable growth period.” Affected by the “THAAD” incident, Korean brands suddenly cannot sell in the Chinese market, and the collective crisis of Korean brands including Innisfree has also come. For a rapidly expanding brand, 2017 happens to be a critical period for its strategy. The sudden crisis has caused the product line, supply chain scale and market strategy to be tested.
In the past, Innisfree was the top performance leader in the beauty sales list of major e-commerce platforms. Since 2018, the ranking on the list has begun to fall, and in 2019 it was even dropped out of the “top 25” , In the end, it was difficult even to be selected.
The marketing director of a beauty platform analyzed to a reporter from “Business” that the industry values the sales lists of e-commerce platforms. They basically illustrate the current competitive landscape of mid-to-high-end beauty brands in China. “Any cosmetics brand can get a share of the Chinese market as long as it has appropriate market positioning and strategy.” This person believes that the impact of the “restriction on Korea” is one reason, but Innisfree is showing its failure in China. , The reasons can be found in the previous brand and product strategy.
According to statistics, in 2018, Innisfree had a significant downward trend, with annual sales falling by about 7%. The parent company Amorepacific once attributed Innisfree’s poor performance to the production cut of “single-brand stores”.
Whether the “single-brand store” that has made a great contribution is in line with the current mainstream trend of opening stores in the beauty market is another matter. On the other hand, this “popular fried chicken” that once led the market by far has its product positioning, category iteration and effective marketing This is the root cause of the problem.
On Xiaohongshu, the beauty blogger wrote nearly 200,000 usage notes for Innisfree, but most of them are “Tucao”, mainly because the product has poor efficacy and a single category. “In terms of similar effects, other brands are more cost-effective.” This has almost become the reason why iron fans who have followed the concept of naturalistic skin care give up Innisfree.
The reporter of “Business” has repeatedly entered the brand’s offline stores in different periods and learned that Innisfree has been expanding in the fastest years, and the “star products” on the store shelves are always a fixed set of product series. . Domestic brands have quietly emerged. Innisfree remained at the same place when they stuck to the best distance between consumers and tried their best to iterate products and introduce new ones. In the future, it is still unknown whether this Korea’s No. 1 Beauty Group will send and shape another brand to enter the Chinese market. Starting from 2019, Innisfree will adjust its strategy and focus on physical new retail. It has successively reached strategic cooperation with platforms such as JD.com and Dada, taking the lead in opening up new real-time retail channels for beauty products. Recently, the reporter of “Business” has contacted Innisfree’s domestic companies and relevant persons in charge of the latest developments on these issues, but to no avail. It’s like having a dream. In the past 10 years, it has greeted the sunrise-like brilliance of China’s mass beauty consumer market, witnessing a series of changes and the rise of online channels, but it was just “getting an early set.” “The funds are relatively tight, and I don’t dare to rush.” An industry insider close to the brand told the reporter of “Business” that Innisfree is a bit “stretched” in the layout of new actions. However, it is always good to be cautious-for this brand that has experienced great ups and downs, what is needed most is a vitality rebirth. If the early crazy single-brand store strategy is an idealistic temptation for Innisfree in China, then facing the cruel truth, seeking a new life with a new attitude is a helpless choice for realism. It’s the warmth of spring, and in the offline stores where Innisfree is still open to welcome customers, consumers hurried past from time to time. Fan Chengcheng, who was just officially announced as the “Youth Spokesperson”, holds the latest items of the season in his hands, exuding a breath of renewal from the inside out. Everything will start again, Innisfree hopes.