At the close of the first quarter, the competition among Chinese cosmetics brands is intensifying.
According to the latest data from CHAILEEDO Intelligence, in the first quarter of 2024, Kans’s total GMV (Gross Merchandise Volume) on Tmall and Douyin, two major e-commerce platforms, reached 21.86 billion yuan, surpassing Proya’s 20.09 billion yuan. Among them, Douyin alone contributed 20.07 billion yuan to Kans’s GMV.
This also signifies a new competitive landscape for Chinese cosmetics brands.
Kans surpassed Proya
The first quarter has drawn to a close, and the GMV performances of two highly anticipated Chinese cosmetics representative brands have been revealed.
According to the latest data from CHAILEEDO Intelligence, in the first quarter of 2024, Kans’s GMV on Tmall was 179 million yuan, on Douyin it was 2.007 billion yuan, with a total GMV of 21.86 billion yuan across both platforms; while Proya’s GMV on Tmall was 1.247 billion yuan, on Douyin it was 762 million yuan, with a total GMV of 20.09 billion yuan across both platforms.
It is evident that in the first quarter, both Kans and Proya achieved a “flying start” by surpassing the 2 billion yuan mark in total GMV on both Tmall and Douyin platforms. However, the latest data also shows that in the first quarter of this year, Kans surpassed Proya with a 177 million yuan advantage, becoming the top brand in total GMV across both platforms.
Furthermore, looking at the performance by month, although Kans’s overall GMV in February and March was not as high as in January, there has been a trend of GMV rebounding since March. Similarly, Proya’s March GMV accounted for 45.1% of the total GMV in the first quarter, reflecting its strong growth momentum.
In addition, looking at the platforms separately, Proya’s Tmall GMV is 1.64 times that of Douyin, while Kans’s Douyin GMV is 11.2 times that of Tmall.
However, Kans’s focus on Douyin is also within expectations. According to the financial report data released recently by Shanghai Shangmei Cosmetics Co., Ltd. (hereinafter referred to as “Shangmei Co., Ltd.”) for the year 2023, Kans’s GMV through the Douyin platform reached approximately 3.34 billion yuan for the whole year, an increase of about 374.4% compared to the same period in 2022.
According to the “2023 China Cosmetics Yearbook” produced by CHAILEEDO Intelligence, apart from Kans, the GMV growth of the top 5 brands on the Douyin platform in 2023 was less than 90%. Among them, the second-ranked L’Oreal brand had a GMV of 2.381 billion yuan, a year-on-year increase of 71.14%; and the third-ranked Proya had a GMV of 2.288 billion yuan, a year-on-year increase of 62.9%.
Comparing the data from the same period last year, Kans achieved 60% of the GMV on the Douyin platform for the entire year of last year in just one quarter and even approached the full-year Douyin GMV of the L’Oreal brand last year, which can be described as “leaving others in the dust” on the Douyin platform. Similarly, Kans’s achievements have also gained recognition from the capital market. As of April 2nd, the total market value of Shangmei Co., Ltd. is 20.3 billion Hong Kong dollars, doubling compared to the 10 billion Hong Kong dollars on the day of its listing in 2022.
Douyin’s growth rate is fast
In its 2023 financial report, Shangmei Co., Ltd. specifically mentioned that Kans’s success stems from its focus on the “Kans Red” series, “Kans Red” gift boxes, and Douyin channels, with the “Red Wasp Waist” gift box as the mainstay, leveraging short dramas and other formats to explode on the Douyin platform. Looking at the full-year data for 2023, according to CHAILEEDO Intelligence, Kans’s GMV on Tmall was 479 million yuan, and on JD.com it was 249 million yuan, which is significantly lower compared to the 3.34 billion yuan GMV on Douyin.
Moreover, from the GMV structure in the first quarter of this year, the Kans brand also emphasizes its focus on the Douyin channel, with Douyin GMV accounting for approximately 92%, while the Tmall platform accounts for less than 10%.
In comparison, Proya’s performance on both platforms seems more balanced. According to CHAILEEDO Intelligence data, in the first quarter of this year, Proya’s Tmall channel GMV was 1.247 billion yuan, and Douyin channel GMV was 762 million yuan, accounting for 62% and 38% of the total GMV across both platforms, respectively.
From this data, it can be seen that Proya is more competitive on the Tmall channel, and the GMV on the Douyin platform is also considerable. Proya’s leading advantage on the Taobao platform also helps it achieve stronger explosiveness during Tmall’s major promotions. During Tmall’s Beauty 38 Refresh Week this year, Proya surpassed foreign brands such as L’Oreal, Lancôme, Estée Lauder, and OLAY, ranking first in both beauty and skincare categories.
CHAILEEDO Intelligence data also shows that during the 38 major promotions period (March 1st to March 8th) this year, Proya’s single-brand GMV on Tmall alone reached 495 million yuan, ranking first in the skincare category. The outstanding performance during the major promotions period also led to Proya’s total GMV across both platforms reaching 907 million yuan in March this year. This indicates that festival promotions can still bring considerable traffic and GMV growth to the Tmall platform, highlighting Proya’s operational capabilities across both platforms.
Overall, Kans has seized a new round of growth opportunities by leveraging its operational advantages on the Douyin platform since last year, while Proya has demonstrated strong explosiveness during major promotions with its solid platform foundation on Tmall. This also reflects the vigorous growth momentum of Kans and the stable e-commerce foundation of Proya, two leading Chinese brands with over 20 years of history, both making strides forward.
Why Kans suparssed Proya
Undeniably, although Proya’s total GMV in March surpassed that of Kans, it is indisputable that Kans achieved the highest total GMV across both platforms in the first quarter of this year. So, why was Kans able to surpass Proya in the first quarter?
Without a doubt, the key to Kans’s success lies in its focus on Douyin. Firstly, Douyin has emerged as the second-largest e-commerce platform for cosmetics, following the Taobao ecosystem. According to data from CHAILEEDO Intelligence, the GMV of the cosmetics market on Douyin reached 168.37 billion yuan in 2023, a year-on-year increase of 47%, while the GMV of the Taobao ecosystem declined by 11.7%. From this perspective, the rapid growth of the cosmetics market in Douyin provides a natural environment for Chinese brands to achieve growth.
With this growth, more and more brands are entering Douyin, making it crucial to understand how to leverage Douyin’s traffic. Kans has adopted the strategy of using short dramas and self-branded content rather than relying on KOL promotion. By using short dramas to reach Douyin’s audience and promoting cost-effective gift box products as their main explosive items, Kans has weakened its dependence on top influencers and created its network of self-promoted accounts.
Thus, by adjusting its traffic strategy promptly while fully leveraging Douyin’s rapid growth, Kans has capitalized on the growth dividend brought by the Douyin platform. Not only has it become the fastest-growing brand on Douyin, but it has also achieved rapid development on the platform’s foundation.
However, it is worth noting that although Proya’s growth and GMV on the Douyin platform are not as high as Kans’s, it has adopted a similar strategy: strengthening its self-branded content while managing the balance between self-promotion and influencer promotion. For example, Proya has established multiple self-promoted accounts targeting key products. Many analysts believe that self-promotion not only helps brands maintain more control over their messaging but also establishes a more solid brand traffic base.
In summary, from the first-quarter GMV performance of Kans and Proya, it is evident that, for Chinese brands, aside from ensuring product quality, leveraging platform advantages and mastering platform strategies are crucial operational strategies and key weapons to win market recognition in online channel competition. Perhaps, this will also become the “magic weapon” for the next Chinese brand to outperform its competitors.
