Can applying makeup to save ZARA?

Editor’s note: This article is from the WeChat public account “Time Interest Research Institute” (ID: SocialTouch2020), author: Shi Yan.

Closed stores, contracted, transformed…These keywords have enveloped the entire international fast fashion brand in the past few years. Coupled with the unprepared blow of the epidemic, now the entire industry is not doing well.

Although it is also facing the pressure of closing stores, ZARA has a peculiar mind. Recently, it has been busy launching its own beauty product line. ZARA’s inner small abacus is obvious. Make money from beauty to make up for fast fashion. dismal.

On May 13, ZARA launched a beauty product line in the department’s offline stores and online official website, and named it “Zara Beauty”. The products cover eye shadow, lipstick, blush, nail polish, etc., in Europe, America, China, Japan, Korea, Australia New regional markets will take the lead in launching this new brand.

ZARA official website make-up product screenshot

At the same time, China’s beauty industry is advancing by leaps and bounds. Since 2018, China’s beauty consumer market has surpassed Japan for the first time, becoming the world’s second largest beauty consumer market. According to Goldman Sachs data, the scale of China’s cosmetics consumer market will grow to US$145 billion in 2025.

Domestic beauty brands such as Perfect Diary, Huaxizi, Winona, Huaxi Biorun Baiyan, and Shanghai Jahwa Yuze have all achieved rapid growth in the past few years. ZARA has rushed into the beauty market, so naturally I want to Share a piece of pie.

Comparison of the volume of the microblogs of the five major domestic brands. The pictures and data are from Shiqu’s speed insight engine

The domestic beauty market has been dominated by international giants for a long time, especially European and American brands have conducted long-term user education to mass consumers, and invisibly shaped the beauty consumption of Chinese users from packaging, marketing, efficacy, and research and development. Preference. But what is interesting is that most of the European and American brands that are highly sought after by users are mostly positioned in the mid-to-high-end product line, but Japanese and Korean beauty products.Brand distribution is more comprehensive, and cheap brands often appear, which in fact leaves a market space for European and American beauty brands to replace products.

If Perfect Diary is taking the alternative route of high-end Japanese and Korean beauty brands to meet the Asian-style and affordable beauty experience; then ZARA may be aiming at the alternative market of high-end beauty brands in Europe and the United States. In fact, the appearance of the new ZARA beauty products is minimalist black and white, which is more European and American, rather than Japanese-style.

From the perspective of ZARA’s product actions, it should have been two or three years since the company was planning to enter the beauty industry. As early as 2018, ZARA launched the first lipstick series Zara Ultimatte, the products are sold globally, but only for online store purchases. At that time, the launch of the lipstick series was only interpreted by the industry as cross-border marketing, not as a sign of entering beauty makeup.

However, some of ZARA’s subsequent beauty attempts have made it taste the sweetness. In 2019, ZARA and Zumalong cooperated to develop a set of co-branded perfume products. As a result, it was recognized by a large number of opinion leaders/KOLs. Circle spread.

Whether it is the lipstick products or perfume products of the previous two years, ZARA still follows the “fast fashion” style in pricing, which is the product positioning of big brands. Zara Ultimatte lipstick is priced at 99 yuan each, and the price of the perfume cooperating with Zumalong is only about 26 euros. ZARA, who has tasted the sweetness, naturally regards “cost-effectiveness” as the principle of product line expansion.

In fact, ZARA is not the only fast fashion brand that constantly tries its beauty product line. In 2015, H&M launched makeup products, which were well received; TOPSHOP also launched a makeup product line in 2010; GAP, Forever21, etc. Fast fashion brands have also tried cross-border beauty products, and even cutting-edge clothing brands such as lululemon have launched makeup products.

H&M beauty product poster

Different from previous play tickets, Zara has now promoted the beauty product line Zara Beauty to the same position as the clothing line, which shows that it will become the focus of ZARA’s operation in the next step. According to media reports, in some offline stores, ZARA has opened up a beauty section for the beauty series, and is equipped with makeup artists to provide services.

So, can ZARA’s beauty dream come true?

With the help of the brand’s accumulated voice and industry resources over the years, the ZARA beauty line can quickly form brand awareness without repeating the establishment of channels. However, in the face of domestic brands such as Perfect Diary and Huaxizi, ZARA’s entry into the beauty industry must not be easy.

According to the financial report data of ZARA’s parent company, in 2020, ZARA closed 38 stores in the Chinese mainland market, equivalent to 21% of 2019. In the case of the impact of the main business, beauty products are placed high hopes. According to industry data, the growth rate of beauty products is not only higher than that of clothing and shoes, but also can reach 30% after deducting the costs of advertising, channels and personnel. -50% profit margin. However, there are also data showing that although Zara’s perfume line has been relatively mature in the past few years, it has only contributed 2% of its revenue. If you want to make Zara Beauty bigger, it is really under pressure.

In the industry, when reviewing the path of Perfect Diary and Huaxizi, they often attribute their rapid rise to traffic dividends. At that time, Xiaohongshu and Douyin platforms were just emerging, and brands were able to acquire customers at low traffic costs. But now the traffic dividend of the head platform has faded, and the industry pattern of emerging beauty brands has gradually stabilized. ZARA wants to make a breakthrough from it. It can no longer eat the dividends of domestic beauty brands in the past few years, and needs to find another way.

ZARA makeup line model poster

From the perspective of the crowd portraits, ZARA beauty is the same as ZARA clothing. According to the data from the Speed ​​Insight Engine, the post-85s-post-95s generation is the main consumer group, with women accounting for about 73%, and the mid-end consumption is slightly higher. In this way, for the ZARA stores that have already been rolled out, it is nothing more than increasing the category SKU, or operating through the “shop-in-shop” approach, which is also the advantage of ZARA. You should know that Perfect Diary, known for its traffic marketing, has also begun to vigorously expand offline store channels from 2020.

ZARA’s current crowd analysis, pictures and data come from Shiqu’s fast insight engine

With the rise of new consumer groups such as Generation Z, diversified consumer preferences and rapid changes in interest, this has made the concentration of the entire beauty industry declining and has become a fragmented market. With the help of ZARA’s existing channel capabilities, it is expected to seize part of the market share, but this also means that it will encounter market growth bottlenecks at the same time, especially as the recognition of domestic beauty brands by young users continues to increase.

Another point is that the beauty industry can be roughly divided into two parts. One is the low-tech cosmetics market. Brands can win through channels and product packaging design. However, the product efficacy is severely homogenized, and the price competition will become Trends; on the other hand, the skin care market with high technical content, brands need to compete in scientific research and productization capabilities, head beauty brands almost have their own technical barriers to the housekeeping, cutting-edge brands can not break through. For the latter, to some extent, this is not only a problem for ZARA beauty, but also a problem for brands such as Perfect Diary, but at least in the near future, they are unlikely to act rashly in the skin care category.

At present, the ZARA beauty line is still in a small-scale early stage of testing through the business model, and has not fully rolled out. According to the official website of the parent company Inditex, ZARA has selected 22 companies worldwideThe store is divided into a makeup area for new products, and 2 stores in China are selected.

In summary, although cheap beauty may bring business growth to ZARA, it is now in a stage of turning a blue ocean into a red ocean. With the deep cultivation of offline stores, ZARA will seize some of the market share brought by offline traffic. , But if you want to gain a leading position in the industry, I am afraid that more efforts are needed.