“The vision of JALA Group is to become China’s number one and a world-leading technology beauty and cosmetics enterprise.”
At the end of the year, in the face of an uncertain macro environment, JALA Group Chairman and President Zheng Chunying delivered a resounding speech at the “Born for Beauty in 2023” JALA Group Customer Annual Conference held on December 26th. He stated that when high uncertainty becomes the “new normal,” the opportunities for mass-market brands become opportunities for local enterprises. The competition among China’s leading beauty and cosmetics enterprises has just begun, and it will take at least five years to establish a new pattern.
There is no doubt that the cosmetics industry is in an unprecedented era of rapid change. However, looking back at neighboring countries like Japan and South Korea, their economic changes and the development trends of the beauty and cosmetics industry show that beauty and cosmetics are one of the few industries that can withstand economic cycles and achieve counter-cyclical growth.
After four years and 1,467 days, JALA Group once again gathered nearly a thousand agents and distributors, not only presenting solid achievements for the year 2023 but also announcing new strategic plans that provide a united development direction for their partners.
Exceeded Expectations! JALA Group Continues to Lead
“In the past three years, the global economy has faced significant external shocks due to the pandemic. However, China’s economy, which is in a period of structural adjustment, has shown great potential and resilience, and the overall situation remains positive.” At the beginning of the annual conference, Zhang Jun, Dean of the School of Economics at Fudan University, commented on the development of the Chinese economy.
This potential and resilience also reflect the trajectory of JALA Group’s development. It is well known that the cosmetics industry has been significantly impacted by the pandemic over the past three years. Even as the year 2023 comes to an end, the anticipated revenge consumption by consumers has not materialized. According to data released by the National Bureau of Statistics, the total retail sales of consumer goods reached 4.25 trillion yuan in November, representing a year-on-year growth of 10.1%. However, the retail sales of cosmetics in November 2023 amounted to 54.8 billion yuan, a decrease of 3.5% compared to the same period last year. November is a crucial period for the industry with Chinese Double 11 Shopping Festival, and this 3.5% decline once again reflects the fact that “the cosmetics business has been challenging this year.”
It is worth mentioning that JALA Group has maintained its “leading by half a step” position and has embarked on digital transformation initiatives, such as implementing digital inventory management, despite market pressures over the past few years. These efforts have successfully driven the transformation of the beauty industry. As the reforms continue, JALA Group’s strides have become even more resolute.
According to Zheng Chunying, in 2023, JALA Group achieved significant growth, surpassing revenue and profit targets, and delivered impressive results.
“For over twenty years, JALA Group’s performance has steadily grown. We have become accustomed to annual growth, but achieving such results in the current environment and context is not easy.”
The outstanding performance data, achieved beyond expectations, not only reflects JALA Group’s success but also translates into better business and a better life for every agent and distributor associated with the company.
During the conference, a distributor from the East China region mentioned, “In the past year, our overall business has shown steady growth. Products like the CHANDO facial masks and the Little Purple Bottle serum have been selling like hotcakes in our stores. We look forward to better policies in 2024.” Similarly, a distributor running an online exclusive store for CHANDO in Hunan expressed gratitude towards JALA Group, saying, “Despite the overall cooling in consumer environment and the decline in the entire beauty market, our online store achieved growth in 2023, which exceeded our expectations. This can be attributed to the strength of the products.”
“Three Fullness” vs. “Eight Transformations”
In fact, as a microcosm of China’s economic development, the shift and acceleration of China’s economy are also vividly reflected in the cosmetics industry. At the conference, Yao Beibei, Chief Operating Officer of CBNData, pointed out that the current cosmetics market has undergone significant transformations in eight aspects: ingredient innovation, green sustainability, digitization, category segmentation, fragmented channels, offline format iteration, online differentiation, and marketing innovation.
From these eight changes, we can see that consumer experience is constantly being upgraded, and the market always has new strategies and opportunities. However, as Zheng Chunying mentioned, in the face of complex economic situations and drastic market changes, it is essential to believe in the power of brands and the power of long-termism.
How does JALA Group respond to the tremendous changes in the market? Zheng Chunying summarized it as “Three Fullness,” which means full industrial chain, full-channel champion, and full-domain digitization.
Firstly, JALA Group has complete control over the entire industrial chain, including independent research and development, production, and raw materials. They have also pioneered the “One Inventory” model in the industry, greatly improving fulfillment efficiency and providing strong support for various sales models.
At the same time, JALA Group has consistently pursued comprehensive development in various formats, leading in market share in multiple sectors and maintaining a healthy balance between online and offline. Importantly, from the era of cosmetics stores to department stores and supermarkets, and then to the e-commerce era, experiencing several cycles of development in the cosmetics industry, JALA Group’s market share and brand influence have consistently remained in the top tier.
Take JALA Group’s cornerstone brand, CHANDO, as an example. According to a recent report by Kantar, CHANDO has ranked first in the skincare category among domestic brands for three consecutive years.
It is also worth noting that from 2001 to 2023, CHANDO has been the only Chinese brand to maintain a top market share ranking for over 20 years. This is a true testament to the brand’s long-term focus.
On the other hand, JALA Group has also been at the forefront of industry innovation. Starting from July 2020, they initiated digital transformation, and currently, digitization has permeated the entire chain of JALA Group, including research and development, marketing, production, logistics, management, and services.
As we know, technological innovation is an essential and irreplicable capability in the cosmetics industry. Alongside the advantages of “Three Fullness”, JALA Group has gained a unique technological edge. For example, in June of last year, relying on their own research platform, JALA Group developed and officially launched a core active ingredient with independent intellectual property rights called “HiMurchaSin,” derived from polar yeast. This ingredient has been incorporated into products such as the fifth generation of CHANDO’s Time Frozen Essence.
In 2023, to further expand their technological leadership, JALA Group signed strategic cooperation agreements with Huashan Hospital of Fudan University and Fudan Children’s Hospital of Fudan University, establishing a joint laboratory to specifically research adult and infant skin and hair follicles. The goal is to develop scientifically effective products for consumers.
New Vision, New Strategy: JALA Group’s Journey to the World
The summary of data is the most direct reflection of the correctness and success of a company’s past business strategies. Opportunists may achieve temporary victories, and pragmatists may achieve periodic victories. Only long-term thinkers can achieve permanent victories.
Of course, adhering to long-term thinking does not mean disregarding the present. On the contrary, only by having flexible and adaptable product and channel strategies that closely follow consumer needs and market changes can a company maintain its vitality and competitiveness. Over the past four years, JALA Group has undergone continuous transformation, embracing both the “Product Technology” and “Digital Technology” strategies. It has successfully evolved from a traditional enterprise to a technology-driven beauty company, establishing new competitiveness.
“In 2024, JALA Group will launch Strategy 3.0, with a new vision to become the leading technology-driven beauty company in China and the world. We will focus on beauty from four aspects: dual focus, multiple brands, comprehensive formats, and internationalization, embracing beauty as our core.” With the gradual subsiding of the pandemic’s impact and the successful transformation of JALA Group, Zheng Chunying is confident in the company’s future.
Of course, all the changes made by the company based on its business form are aimed at seizing new opportunities and driving business growth. Zheng Chunying pointed out that since its establishment in 2001, JALA Group has built a multi-brand matrix with CHANDO as the cornerstone brand. It has successfully shaped three unique characteristics: the Himalayas, Oriental Aesthetics, and Technological Leadership. The company possesses three major advantages: a full industrial chain, a champion in all channels, and complete digitalization. Zheng Chunying stated, “With 23 years of accumulation, JALA Group has established a strong reputation in the industry through well-known domestic brands and long-term investment in research and development. We have built a reputation for integrity, reliability, strength, and technological leadership. We will unleash these values, significantly increase market penetration, expand market share, grow stronger, achieve leadership in China, and create a world-class brand that belongs to the Chinese.”
Starting from 2024, JALA Group will have three driving forces for growth. First, it will amplify the influence of its core brand, CHANDO, to drive the development of the entire group’s comprehensive formats and global business. Second, it will focus resources on developing channels that are closer to consumers. Lastly, it will make adjustments and changes in branding, product assortment, marketing methods, and more.
Furthermore, JALA Group has always been at the forefront of sustainable development among Chinese beauty companies. As Zhang Jun pointed out at the annual conference, “In the past 5-8 years, over half of the national and provincial development strategies emphasized protection rather than development, focusing on ecological restoration and preservation. This shows that sustainability is a crucial aspect of China’s future economic development.”
Wang Ying, a partner of ESG Services at PwC China, also stated, “Research shows that Chinese consumers are willing to pay a premium of up to 20% for products that align with environmental protection concepts and have credibility.”
As a meticulous industry that requires technology, research and development, and patience, the cosmetics industry needs to elevate its technological content and added value. All signs indicate that in the future, ESG will no longer be purely philanthropic, but gradually become a competitive differentiator among beauty brands.
JALA Group has clearly recognized this trend early on and continues to make efforts in that direction. It is understood that JALA Group is currently practicing the concept of green beauty from four aspects: green packaging, green ingredients, green production, and environmental protection in terms of environmental (E) protection. On the social (S) level, the company is continuously striving for human sustainability, cultural sustainability, and economic sustainability. In terms of governance (G), JALA Group has developed long-term ESG development plans and established an ESG organizational structure to ensure sustainable development.
During the customer annual conference, JALA Group made a major announcement of the “JALA Group Group 2030 Sustainable Development Strategy Goals.” It is reported that in 2024, JALA Group will comprehensively promote its sustainable development strategy from 12 dimensions, including addressing climate change and protecting biodiversity, promoting sustainable packaging and circular economy, ensuring product quality and consumer rights, and driving digital transformation and data security.
In the current era, which is characterized by thin profits and limited resources, “value” will determine everything. To succeed, one must create significant value, and the same applies to companies. Nowadays, with product technology, digital technology, and sustainable development, JALA Group has positioned itself for the future. “Profoundly understanding hundreds of millions of Chinese consumers and creating a world-class brand that belongs to the Chinese” is not only JALA Group’s declaration but also its self-demand over the past 23 years, which has never changed.
