On the evening of March 21st, Shanghai Chicmax Cosmetic Co., Ltd. (hereinafter referred to as “Shanghai Chicmax”) released its 2023 performance report as scheduled. According to the financial report, Shanghai Chicmax achieved a total revenue of 4.19 billion yuan ($580.6 million) last year, with a year-on-year growth of 56.6%.
CHAILEEDO discovered that on December 22nd, 2022, the day Shanghai Chicmax went public, its total market value was 10 billion Hong Kong dollars. As of today’s closing, the total market value of Shanghai Chicmax has reached 19.2 billion Hong Kong dollars.
Doubled! KANS achieved revenue of 3.1 billion yuan ($429.6 million).
Behind the nearly doubled market value lies the recognition from the capital market for Shanghai Chicmax, reflecting its significant achievements and breakthroughs in the cosmetics industry over the past two years.
According to the financial report, Shanghai Chicmax achieved a total revenue of 4.19 billion yuan ($580.6 million) last year, with a year-on-year growth of 56.6%. The annual profit reached 461 million yuan ($63.88 million), showing a 237% increase compared to 2022. These are the best results Shanghai Chicmax has achieved since publicly reporting its financial performance.
Looking through Shanghai Chicmax’s annual report, the record-breaking operating income in 2023 is closely related to the performance of its flagship brand, KANS.
Shanghai Chicmax mentioned in the financial report that its three major flagship brands, KANS, One Leaf, and Baby Elephant, contributed significantly to the company’s performance in 2023. Other brands such as newpage and ARMIYO gradually grew to become the second growth curve of the company’s performance.
Among them, the KANS brand achieved a revenue of 3.09 billion yuan ($428.2 million) in 2023, a growth of 143.8% compared to 2022, accounting for 73.7% of Shanghai Chicmax’s total annual revenue.
In the report, Shanghai Chicmax explained that in 2023, it conducted a comprehensive upgrade of the KANS brand, promoting the youthfulness of the brand’s visual system and enhancing the memorability and influence of the high-quality domestic image.
In terms of sales, through focusing on the KANS brand, KANS Red, KANS Red Gift Box, Douyin (Chinese version of TikTok) channels, and collaborating deeply with millions of fans and influencers to create multiple short dramas, KANS achieved a significant increase in sales. Among them, KANS’s flagship explosive product, the Polypeptide Collagen Softening Gift Box, ranked first on multiple Douyin rankings. According to official data from Douyin, KANS ranked first on the 2023 Beauty Brands Annual Ranking and the 2023 Mass/Local Skincare Brands Ranking.
The financial data also shows that in the twelve months ending on December 31, 2023, KANS achieved a total transaction value (GMV) of approximately 3.34 billion yuan ($462.8 million) through the Douyin platform, an increase of about 374.4% compared to the same period in 2022.
In addition, One Leaf recorded a revenue of 357 million yuan ($49.47 million) in 2023, a decrease of 32.7% compared to 2022, while Baby Elephant’s revenue in 2023 was 376 million yuan ($52.1 million), a decrease of 42.6%. It is worth mentioning that newpage, launched by Shanghai Chicmax in 2022, achieved strong growth in 2023, with a revenue of 153 million yuan ($21.2 million), a 498% increase compared to the previous year.
Two new brands are in preparation
In terms of distribution channels, Shanghai Chicmax’s online channel achieved a revenue of 3.587 billion yuan ($497.1 million) in 2023, significantly higher than the 2.204 billion yuan ($305.4 million) in 2022, accounting for 85.6% of the group’s total revenue. The offline channel’s revenue declined from 614 million yuan ($85.1 million) in 2022 to 539 million yuan ($74.69 million).
It is worth mentioning that in 2023, Shanghai Chicmax’s online self-operated sales accounted for 2.909 billion yuan ($403.1 million) of the group’s revenue. Shanghai Chicmax also emphasized in the financial report that this was mainly due to the contribution from e-commerce platforms such as TikTok.
Of course, along with the substantial revenue growth, Shanghai Chicmax also saw an increase in marketing expenses. According to the financial data, its sales and distribution expenses were 2.24 billion yuan ($310.4 million) in 2023. Among them, marketing and promotion expenses increased to 1.746 billion yuan ($241.9 million) in 2023. Shanghai Chicmax explained in the financial report that this was mainly due to increased investment in brand exposure, seizing new channel opportunities, and intensifying brand promotion and channel development.
In terms of research and development investment, from 2020 to 2023, Shanghai Chicmax’s R&D expenses were 77 million yuan ($10.67 million), 104 million yuan ($14.41 million), 110 million yuan ($15.24 million), and 126 million yuan ($17.46 million), with the R&D ratio increasing from 2.3% in 2020 to 3% in 2023. In fact, Shanghai Chicmax has been continuously active in research and development in recent years. The financial report shows that in 2023, Shanghai Chicmax filed 58 new patent applications, including 35 invention patents, and obtained 18 new patents, including 3 invention patents.
Furthermore, Shanghai Chicmax revealed in the financial report that it is preparing to launch the mid-to-high-end personal care brand 632 and the high-end anti-aging skincare brand TAZU, developed in collaboration with scientist Yamada Kosaku.
Looking ahead, Shanghai Chicmax stated that it will focus on implementing the “6-6” strategy, promoting overall business growth through six major competitive aspects and six business sectors to support the group’s sustainable development.
Specifically, the six major competitive aspects include: maintaining organizational leadership driven by talent to support the group’s sustainable development; maintaining research and development leadership by continuously investing in R&D and promoting product innovation; introducing AI management tools to improve group management and operational efficiency; maintaining marketing leadership by further strengthening and expanding product marketing networks; maintaining leadership in intelligent production; and promoting the group’s strategy from “personalized” development to “common” development, leveraging platforms to further expand business.
The six business sectors refer to mass skincare, personal care and hygiene, maternity and baby products, medical aesthetics, cosmetics, high-end skincare, and devices. It is reported that over the next decade, Shanghai Chicmax will expand its business boundaries in the cosmetics industry by developing these six business sectors.
Under this strategy, Shanghai Chicmax may achieve breakthrough development again in 2024.
The Top 10 Chinese Cosmetics Brands undergo changes
In the 2022 Top 10 Chinese Cosmetics Brands list compiled by Qingyan Statistics, Shanghai Chicmax ranked 7th with a revenue of 2.675 billion yuan ($370.7 million), while Yatsen took the 6th position with a revenue of 3.706 billion yuan ($513.6 million). Previously, Shanghai Jahwa, Proya, and Bloomage Biotech held the top three positions.
According to the previously announced annual revenue by Yatsen, it was 3.414 billion yuan ($473.1 million). In other words, in 2023, Shanghai Chicmax may enter the top 6 of the listed Chinese cosmetics companies with a revenue of 4.2 billion yuan ($582 million).
Just last week, the financial report of Shanghai Jahwa revealed that in 2023, the company achieved a revenue of 6.598 billion yuan ($914.3 million) and a net profit attributable to shareholders of the listed company of 500 million yuan ($69.29 million), representing a year-on-year growth of 5.93%. Prior to this, securities firms predicted an average revenue of 8.3 billion yuan ($1.15 billion) for Proya in 2023.
It is foreseeable that with the release of more financial reports from local beauty companies, the Top 10 Chinese Cosmetics Brands in 2023 will certainly see a new landscape.
Behind the changes in rankings, companies are evidently not indifferent.
Recently, Pan Qiusheng, Chairman and CEO of Shanghai Jahwa, publicly stated that in 2024, the company will focus on developing interest-based e-commerce and concentrate resources on categories with high gross profit, high growth rate, and high brand premium. With the investment of resources, Shanghai Jahwa’s brands such as YUZE, Baiquji, Shuangmei, and the revitalized Mei Jia Jing brand from last year will undoubtedly make waves in the world of Douyin beauty.
Yatsen also mentioned that the main reason for its revenue decline was the decrease in net revenue from makeup brands, while net revenue from skincare brands increased. In 2023, the annual revenue from the skincare business increased by 11.4% year-on-year to 1.38 billion yuan ($191.2 million), further raising its proportion in the total revenue to 40.5%.
Furthermore, in the fourth quarter of last year, Yatsen achieved a quarterly revenue of 1.07 billion yuan ($148.3 million), a year-on-year growth of 7.9%. This is the first time that Yatsen has experienced revenue growth since the fourth quarter of 2021. It also reflects that Yatsen’s “second growth curve” focused on the skincare business has achieved certain results. After exploring a profitable method, its performance is expected to “turn positive” this year.
Overall, the fluctuations in the rankings of Chinese cosmetics companies indicate that the industry structure has not yet solidified. It further reveals that those companies capable of accurately capturing market trends, channel transformations, and category opportunities are standing at the threshold of embracing a new wave of growth.
