Driven by Chinese goods and new consumption trends, the Chinese cosmetics market has been experiencing rapid development. However, the issue of intense competition within the industry has also been escalating. Currently, it has become a consensus among many Chinese brands, especially emerging ones, to venture out of narrow market segments and explore broader business opportunities. An evident phenomenon is that an increasing number of brands have found a wider market by starting from niche segments.
Taking facial cleansers as an example, a rapidly growing market segment, numerous brands and products have entered the competition. According to Yonghushuo data, the sales revenue of facial cleansers on traditional e-commerce platforms exceeded 15 billion RMB ($2.1 billion) from March 2022 to March 2023. In terms of sales volume, facial cleansers hold a prominent position within the skincare category.
However, it is often more challenging to succeed in fundamental product categories, and only a few brands can break through in this highly competitive field. Hung Chi, an emerging Chinese skincare brand focusing on the cleansing sector, is one of them.
Hung Chi, a Chinese skincare brand, was founded in 2020 and has been dedicated to the cleansing category since its inception. With the strong belief of helping users “cleanse their faces gently,” the brand has made a powerful entry into the facial cleanser market. In 2023, Hung Chi achieved an annual Gross Merchandise Volume (GMV) of over 400 million RMB ($56.3 million) across all channels, establishing itself as a well-deserved dark horse in the facial cleanser market among Chinese brands.
Annual GMV exceeding 400 million RMB ($56.3 million)
Multiple honors testify to Hung Chi’s resilient growth
Business is a cycle, and strong brands often have the ability to transcend market cycles and maintain resilient growth. With quality and reputation, Chinese brands have exploded onto the scene.
According to the “2023 McKinsey China Consumer Report: The Era of Resilience,” 49% of Chinese consumers believe that Chinese brands have “better quality” compared to foreign brands. Future Chinese consumers are more inclined to choose Chinese brands, a preference rooted in recognition of product quality and innovation, rather than just low prices or national pride. According to official data from Tmall, 402 brands on the platform achieved sales exceeding 100 million RMB ($14 million) during this year’s Chinese Double 11 Shopping Festival (Double 11), with 243 of them being Chinese brands.
The era of Chinese brands surpassing and replacing multinational brands has arrived, and this story is also unfolding in the facial cleanser market. In this year’s Double 11, Hung Chi once again showed its momentum. According to the brand’s Double 11 performance, Hung Chi’s Olive Ferment Makeup Remover ranked first in the Tmall hot-selling list for sensitive skin makeup removers. Hung Chi’s Amino Acid Gentle Cleansing Milk and Hung Chi’s Amino Acid Moisturizing Cleansing Foam also made it to the Tmall hot-selling list for oil-control facial cleansers and mousse cleansers respectively. So far, Hung Chi has established its presence in various facial cleanser categories, including cleansers, makeup removers, cleansing balms, makeup remover wipes, and clay masks, ushering in the era of “Facial Cleanser 4.0” quality in China.
After three years of hard work, the results are fruitful. Hung Chi was founded in 2020, achieving breakthroughs from 0 to 1. In 2021, the brand’s GMV across all channels exceeded tens of millions of RMB. In 2022, it surpassed the 100 million RMB ($14.1 million) mark, and in 2023, Hung Chi continues to experience high-speed growth. According to the brand, they expect the brand’s GMV across all channels to exceed 400 million RMB ($56.3 million) this year.
It is worth mentioning that with innovative formulas and outstanding quality, Hung Chi’s Amino Acid Gentle Cleansing Milk and Hung Chi’s Olive Ferment Makeup Remover stood out among many competing products at the inaugural 2023 China’s Top Formula Annual Ceremony, winning the “Annual Cleanser” award and “Annual Makeup Remover Product” award, respectively.
The 2023 China’s Top Formula awards are selected by a panel of top global beauty scientists, dermatologists, beauty industry opinion leaders, and other experts. They evaluate products based on efficacy and science, sensory experience, innovation and creativity, and other dimensions, combining them with relevant testing and inspection data to select the best products of the year. In addition to Hung Chi, several well-known Chinese and international brands, including Kefumei, Proya, Winona, Shiseido, and Eucerin, were also nominated.
Throughout the journey, Hung Chi has been crowned with numerous honors. For example, at the 63rd CIBE (China International Beauty Expo) New Brand Conference, Hung Chi won the “Beauty Economy Emerging Brand” and “Beauty Trend List Brand” awards, and Hung Chi’s Olive Ferment Makeup Remover won the “Beauty Trend List Product” award. At the 2023 CBE China Beauty Expo, Hung Chi’s Olive Ferment Makeup Remover once again won the “2023 Beauty Eye Award TOP Skincare Makeup Remover Oil” award. In the 2023 Rui Li Trend Ranking announced in June, Hung Chi’s Honey Moisture Makeup Remover Balm was awarded the title of “Annual Emerging Strength Makeup Remover Balm,” making it the only Chinese makeup remover product on the list…
Behind the excellent performance and repeated achievements lies the industry’s recognition of Hung Chi’s product quality and reputation, as well as Hung Chi’s strong demonstration of professional expertise and innovation in leading the industry’s high-quality development.
Build a five-dimensional model of product power and achieve the ultimate in clean products
For Chinese beauty and cosmetics, how to achieve counter-cyclical growth in an uncertain environment?
Dongxing Securities research report pointed out that the development process of international beauty and cosmetics industry leaders has gone through the stages of “classic products-classic brands-brand matrix”, which establishes brand positioning with classic products, and then establishes corporate tone with the brand. The perfect brand matrix has become a shield for leading beauty and cosmetics companies to sustain growth throughout the cycle.
In these three stages, product power is undoubtedly the core. For example, Estée Lauder Advanced Night Repair, Lancome Advanced Genifique series, etc., have firmly occupied users’ minds for decades and continue to be updated and iterated. Chinese beauty and cosmetics groups such as Proya and Bloomage Biotech have also achieved continuous high-speed revenue growth through deep cultivation of flagship products.
For Hung Chi, which was established three years ago and has made remarkable achievements in the field of facial cleansers, the continuous expansion and success can be attributed to the refinement of ultimate product power. Based on the establishment of competitive barriers, finding the explosive points of products and providing the “best industry solution” for different customer groups is Hung Chi’s goal. To this end, Hung Chi has established a five-dimensional model of product power, including clear mechanism, effective ingredients, efficient absorption, sensory pleasure, and demonstrable efficacy, thus forming a closed loop of product power. The dedication to refinement means that Hung Chi’s new products are not launched quickly. It is understood that each product of Hung Chi undergoes four rounds of rigorous testing before its launch, and the entire process takes a minimum of six months.
The success of Hung Chi’s product power model is also evident in reality. For example, Hung Chi’s “Xiao Qin Jing” amino acid facial cleanser not only leads the trend of 30% amino acid surfactant claims in facial cleansers but also uses a slow crystallization process to achieve finer and more stable crystal formation, providing clear pores without drying the skin, thereby creating a strong competitive advantage for the product. After its launch, the product received rave reviews from users and sold over 1 million units across various e-commerce platforms, making it a frequent top-seller on the sales, positive reviews, and repurchase lists.
Another example is the Care Facial Cleansing for sensitive skin launched by Hung Chi in May this year. It contains 80% powdered high-purity centella asiatica and a triple amino acid compound APG surfactant formula, which is even milder and easily cleanses the pores. The product has been tested by sensitive skin users for 28 consecutive days and verified by tests conducted by well-known Chinese universities, confirming its gentleness and lack of irritation. It quickly became a favorite facial cleanser for people with sensitive skin after its launch.
In terms of user insights, Hung Chi is able to identify products that users may not expect or perceive but still need. For example, the multi-effect cleansing and clarifying makeup remover oil launched in July this year originated from Hung Chi’s discovery that many consumers were struggling with whether they needed to remove sunscreen. Most makeup removers on the market focus only on removing makeup, but removing sunscreen is more difficult due to its special film-forming system. As a result, a more professional product specifically designed for removing sunscreen was born.
In addition, since this year, Hung Chi has also launched Hung Chi Light Skin Clear and Translucent Makeup Remover Oil, the Hung Chi X Nai Long collaboration gift box “Playful Cleanse,” and the Hung Chi Gentle Eye and Lip Makeup Remover. From the early days of the brand’s establishment, with the launch of the first product, Hung Chi Amino Acid Skin-friendly Cleansing Milk, to the gentle eye and lip makeup remover launched in November, Hung Chi has only had 15 SKUs since its establishment. The Hung Chi team, with their meticulous craftsmanship and craftsmanship, has driven the sales of multiple popular products with a minimal number of SKUs, earning the brand a good reputation.
It is worth mentioning that recently, Hung Chi also launched its first hair care product, the Hung Chi Oil Control and Volumizing Shampoo, continuing to focus on the cleansing field and bringing consumers more scientific, reassuring, and effective cleaning products.
Regarding the logic behind extending products from facial cleansers to hair care, Hung Chi believes that the skin of the body should not be treated differently, and gentle cleansing is not only a pain point for facial cleansing but also a mandatory course for body cleansing. Applying the ideas of facial cleansing formulations to hair care products is a new attempt by Hung Chi in 2023. Hung Chi will advance in terms of ingredients, craftsmanship, experience, and price, helping consumers gently cleanse their skin.
In Hung Chi’s planning, scale has never been the top priority. Instead, more attention is paid to user reputation and repurchase rates, and the companystrives to provide the best industry solutions for different customer groups. At the age of three, Hung Chi embodies the qualities of a wise and conscious being, constantly adhering to its own quality and foundation. It retains the vigor of youth, accelerating innovation, and continuously improving and enriching its product portfolio.
Multi-dimensional efforts in scientific research, marketing, channels, and more
Supporting the development of domestic brands
If product strength is the cornerstone of gaining consumer recognition, then the layout in scientific research, marketing, and channels is a strong driving force behind Hung Chi’s rapid development.
In terms of research and development, Hung Chi has established laboratories in collaboration with several well-known research and production companies, led by authoritative experts in dermatology, to build core barriers for product development. It is understood that Hung Chi selects top-tier raw materials in the global supply chain and combines them with a more scientific formula system. To ensure effective resolution of consumers’ facial cleansing problems, all of Hung Chi’s product ingredients undergo 66 professional and rigorous tests.
Research and development technology is the “backbone” of a product and the moat of a company’s core competitiveness. However, the technological perspective is not the only perspective from which consumers view a brand. In the beauty market where brands gather, to gain consumer recognition and trigger decision-making behavior, it is also necessary to establish brand awareness and deeper brand memory in consumers.
In terms of communication strategy, Hung Chi focuses on multiple social platforms and efficiently generates interest. Looking at the communication matrix, Hung Chi mainly focuses on Douyin (TikTok) and Xiaohongshu (Little Red Book), coupled with Weibo, Bilibili, Zhihu, and others, to precisely market and educate target audiences, helping the brand establish its image and gain customer identification. With its high-quality product strength, Hung Chi’s consumers have transformed from being “influenced” to becoming “wild advocates,” leading to continuous improvement in brand reputation.
In addition, faced with intensive e-commerce extravaganzas, consumers are often desensitized. In the era of rational consumption, beyond competing for traffic pools, providing emotional value to consumers and guiding the generation of consumer behavior can enhance brand value.
This year, through a collaboration with a popular animated IP Nai Long on Douyin, Hung Chi has not only rejuvenated the brand but also gained more attention and recognition, breaking through barriers and rapidly increasing brand influence.
Regarding channels, in addition to its own brand livestreaming and influencer livestreaming, Hung Chi is also establishing a self-operated and distribution system. It is understood that up to now, Hung Chi has entered nearly 6,000 offline stores. Recently, Hung Chi’s “Bu Jiu Jie” makeup remover oil successfully entered the renowned SanFu department store, further expanding its offline cooperation network.
In the fierce competition, those who strive forward will take the lead. For Hung Chi, every transformation and perseverance is aimed at creating a domestic brand that is more in line with the current era and contributing its own strength. Looking back at the past three years of Hung Chi’s brand growth history, “resilient growth” best summarizes its trajectory of growth, and it will continue to be the attitude of Hung Chi as it constantly explores new territories in the future.
