Business has its cycles. It is undeniable that offline channels and the cosmetics market have survived the impact of the external environment in previous years and are now entering a new phase of alternating trends. How to face the new challenges brought by the recovery of offline channels and how to win the battle during this crucial period of transformation are important questions for every company.
Marubi, which has successfully navigated through countless market cycles, has taken a breakthrough and assertive stance by introducing the strictest “anti-counterfeiting and price control order” ever seen. This move marks the beginning of 2024 and also provides significant driving force for the development of offline channels, reassuring the channel partners who have always supported Marubi and leading Marubi into the next era of higher quality.
Offline First Battle: Strict Anti-Counterfeiting and Price Control Order
In 1993, renowned economist James Moore first proposed the concept of a “business ecosystem,” where individuals and organizations within this organic economic entity depend on each other and evolve together through continuous interaction. The competition is no longer between companies, but between ecosystems.
For beauty and cosmetics companies, reshaping offline channels undoubtedly requires a reevaluation of the relationships between products, data, and channels. It is essential to internalize every aspect of the ecosystem, including producers, suppliers, distributors, and consumers, into a healthy system in order to truly achieve strategic transformation.
During the recently concluded 2024 Marubi Annual General Manager Conference, Sun Huaiqing, Chairman and CEO of Marubi, clearly outlined Marubi’s current channel strategy: “E-commerce is the growth engine, department stores are the brand highlands, daily cosmetics are the offline foundation, beauty is the professional base, and new retail is the new business area.” This not only highlights the importance of offline channels but also demonstrates Marubi’s confidence and courage in continuously expanding its offline presence.
Although optimizing offline channels remains a long-term proposition for Marubi, the first shot of 2024 has already been fired.
At the conference, Marubi made a significant announcement by introducing the most stringent “anti-counterfeiting and price control order” in history. They presented six powerful measures from both institutional and implementation perspectives to safeguard the company’s lifeline of operations. Marubi also signed “anti-counterfeiting and price control agreements” with hundreds of regional distributors, collectively pledging to maintain Marubi’s channel order, unite against common enemies, and strictly adhere to market boundaries.
Throughout the entire development process of offline channels, price chaos and counterfeiting have always been among the criticized issues. Many brands have suffered the collapse of pricing order in their distribution channels, which ultimately damages their brand image and commercial value, turning them into mere traffic generators for offline stores.
To thoroughly address these problems, it requires brand awareness in streamlining channels, maintaining price integrity, and providing sufficient support and profit margins for distributors. It also requires distributors to have an understanding of safeguarding the healthy development of the market and consciously maintaining market order. Marubi’s “anti-counterfeiting and price control order” aims to tackle the conflicts of people, products, and prices that arise in offline channels.
Marubi’s anti-counterfeiting and price control campaign involves both institutional and implementation aspects, ensuring strict policy implementation from product to supply chain, from the source to the end channels.
At the institutional level, Marubi employs a combination of “cloud warehouses, product differentiation, and covert codes” to curb counterfeiting from the source. With the help of their proprietary big data module, they have introduced anti-counterfeiting traceability codes and covert codes, enabling product traceability and optimizing management from the source.
At the implementation level, the CEO personally takes charge, firmly placing the “anti-counterfeiting and price control” measures at the top of the ideological agenda. Additionally, a market inspection team has been established, dedicated to nationwide and all-channel inspections. They impose strict penalties for any violations, leaving no room for leniency, employing high-pressure measures. In necessary cases, legal action will be taken against counterfeiters who scrape or tamper with codes. This comprehensive approach of “inspection, reporting, and accountability” aims to counter counterfeiting and price chaos throughout the entire supply chain.
Marubi’s strict “military order” against counterfeiting and price chaos has garnered high praise and support from distributors in dozens of provinces and cities, including Beijing, Guangdong, Henan, Hubei, Zhejiang, Ningxia, Inner Mongolia, and Xinjiang. They affirm, “Price chaos has always been a headache, and Marubi’s new policies are truly surprising. We are fully supportive!” “Marubi is one of the first brands this year to propose measures to combat counterfeiting and prevent price chaos. If they can truly implement it, we will undoubtedly be more motivated.”
Directly managing, cracking down on, and controlling the distribution end is undoubtedly the cornerstone for the stable and healthy development of offline channels. As the first Chinese brand in 2024 to make anti-counterfeiting and price control its “first shot of the new year,” Marubi not only demonstrates its attitude to the market but also provides reassurance to its distributors and channel partners.
Seize the Opportunity Period: Marubi’s Updates
Behind every corporate transformation lies accurate insights into the macro environment and the overall market. Marubi’s standardization and reinforcement of offline channels also stem from its forward-looking understanding of the current market environment.
According to data from the National Bureau of Statistics, the retail sales of physical stores above a certain threshold increased by 4.9% year-on-year from January to November of the previous year. The cumulative growth rate accelerated for three consecutive months, with convenience stores, department stores, specialty stores, and brand flagship stores experiencing retail sales growth of 7.4%, 7.7%, 5.1%, and 4.5%, respectively, showing comprehensive improvement in growth rates.
Focusing on the cosmetics industry, according to the “2023 China Cosmetics Yearbook” published by Qingyan Intelligence, the scale of offline channels for cosmetics in 2023 reached 392.61 billion yuan, representing a 0.8% year-on-year growth. Additionally, although the offline channels have been slow to recover after a few years of macro market challenges, as of 2023, the offline cosmetics market still accounted for 49.2% of the total market size.
As the market trends recover, the popularity of offline channels is visibly returning to the right track at an alarming speed. It has become an important market that beauty brands cannot ignore or abandon, playing a crucial role in expanding consumption and market boundaries. That is why in recent years, dozens of beauty brands that were previously active online have also started to heavily invest in offline channels.
The revival of offline is an ongoing process, and Marubi has also seized this rapidly changing market cycle. In Sun Huaiqing’s view, the Chinese cosmetics market is undergoing a period of comprehensive updates, including market updates, export updates, brand power updates, and growth updates. With the establishment of increasingly complete supply chain systems and research and development systems, Chinese brands like Marubi are leveraging their strong resilience in research and development, manufacturing, funding, and brand building to establish a competitive advantage that international giants cannot match. They are emitting increasingly strong signals of growth to the market.
Forward-looking insights enable every step taken by Marubi to be stable and successful. Based on the already disclosed financial data, Marubi achieved double-digit growth in revenue and net profit in just the first three months of 2023, with growth rates exceeding 30%. Moreover, according to Sun Huaiqing, Marubi’s offline channel share continued to rise in 2023, and both online and offline channels achieved above-average growth. Brands such as Dabao and PL even achieved double-speed growth.
Channel and speed updates form the foundation of growth, while brand, product, and audience updates serve as Marubi’s intrinsic driving forces for growth. In terms of product development, Marubi adheres to scientific innovation, research and development, and communication, focusing on the anti-aging and base makeup sectors, and has created a series of popular blockbuster products. At the same time, its priority insights into recombinant collagen have made it a pioneer in the field of recombinant collagen research and development.
In terms of brand building and audience expansion, through continuous brand communication and optimized positioning, Marubi has successfully tapped into the younger, emerging consumer groups in first and second-tier cities, accumulating a population asset of hundreds of millions.
It can be said that with keen insights into channels, forward-looking research and development, refined brand marketing, and strong digital driving force, Marubi is embracing a new round of market changes with a resilient posture of speed updates, technological updates, brand updates, product updates, audience updates, channel updates, supply updates, organizational updates, and intelligent updates.
New Year’s Explosive Product “Dazzling” to Activate Channels
Of course, regardless of how channels are constructed, it is ultimately the generation after generation of products with hardcore competitiveness that support brand growth.
As early as 2007, Marubi launched the Elastic Protein Ace series, deeply ingraining the product in the minds of consumers. That established its leading position in the field of anti-aging for the eyes in consumer consciousness. Since then, Marubi has iterated the iconic series, introducing small molecule hydrolysis technology in 2018 to use smaller and better-absorbing elastic proteins.
This year, to activate channels and continue the brand’s highlights in memory, during this critical period of channel transformation and intergenerational consumer changes, Marubi will launch a new product called Marubi Elastic Protein Time-Locking and Firming Anti-Wrinkle Essence. On one hand, it will stimulate the memory of potential consumers through classic advertising slogans, awakening loyal users. On the other hand, it will further strengthen the classic image and its leading position in the field of anti-aging for the eyes, further expanding its customer base offline and online.
In fact, Marubi had already launched a “Golden Needle Essence” product before this, which became a core product for Marubi in just one year and achieved super-fast growth every year. This time, while continuing the form of the new essence, Marubi has added its exclusive patented supermolecular protein and elastic framework peptides, supplementing elastic proteins and providing strong spring network support for the skin to achieve anti-aging effects.
In fact, Marubi has been engaged in research and development in the eye care and anti-aging field for over 20 years, and anti-aging products now account for over 80% of Marubi’s total product structure. It has built an exclusive targeted anti-aging system by deconstructing different signs of skin aging and anti-aging needs, dividing aging into five levels, and providing corresponding anti-aging strategies for different levels of skin aging, advocating a “targeted” approach rather than an “age-based” approach.
All of this also relies on the development of core talents. Currently, Marubi has formed a research and development team composed of Chinese and international experts, high-level talents, and other personnel, including 10 Ph.D. holders and post-doctoral researchers, as well as an external research and development expert team of over one hundred people, two of whom are Nobel Prize winners.
As of now, Marubi has accumulated a total of 504 patent applications, including 394 invention patents and 16 recombined collagen protein patents, with 20 core raw materials and participation in the formulation of 53 industry standards. In addition, in 2023, Marubi successfully filed for registration of one new cosmetic raw material, making it a leader in the registration of new raw materials for cosmetic brands.
In 2023, Marubi has established its own “Marubi New” in terms of development speed, research and development technology, brand building, product channels, target audiences, supply chains, organizational talents, and data intelligence. In 2024, Marubi, starting from a brand-new point, has made further preparations in various fields, taking the strictest measures with the “Anti-Smuggling Control and Price Order.”
As Sun Huaiqing said, Marubi in 2024 is even more “new” in all aspects!
