Dongxing Securities: Super Long Double Eleven Promotes Hot Start, Leading Beauty Brands Welcome a Good Start

The Zhitong Finance App learned that Dongxing Securities released a research report saying that with the launch of the Double Eleven pre-sale in 2024, the start time of each platform's activities was much earlier than the same period in '23, and the Double Eleven promotion cycle was lengthened; at the same time, discounts to consumers and brands on all platforms have increased, and the variety of activities is more diverse. However, with the intensification of competition in the industry and the rise of domestic brands, the sales performance of international beauty brands in China is gradually weakening. Against this backdrop, international brands have stepped up their promotion and planting efforts, increased the number of giveaways and investment in promotion, and have now achieved initial results.

Dongxing Securities's main views are as follows:

Double Eleven pre-sale starts in 2024, and major platforms are actively rushing to increase discounts

Judging from the event schedule, Taobao: Pre-sale began at 8 p.m. on October 14, ten days earlier than in '23. The official launch was divided into two waves, 10.31-11.4 and 11.10-11.11. JD: Starting at 8 p.m. on October 14, 11 days earlier than in '23, and pre-sales were cancelled. Douyin: Early access starts on 10.8, and the official period starts on 10.18. Compared with 2023, the event was brought forward 12 days, a 10-day advance period was added, and deposit pre-sale was cancelled. Pinduoduo: The 10 billion subsidy was the first to launch the Double 11 Promotion on October 8, and the platform campaign was fully launched at 00:00 on the 10th and 14th.

Judging from the intensity of the campaign, Taobao: An additional 30 billion yuan in consumer vouchers and red envelopes was invested on top of the official 15% discount or the full cross-store discount of 50 yuan for every 300 yuan campaign. At the same time, high-value vouchers for single products and 88vip high-value vouchers were added; JD: The cross-store full discount was adjusted to a full 300 discount of 50, and a direct discount of the entire market was introduced, and an additional subsidy of 60 yuan per day was introduced. The platform provides all merchants with a subsidy voucher of 200 yuan minus 20 yuan. Douyin: Launching deals such as 15% off one item, official direct discounts, etc. We will supplement the best deals and issue coupons of 20% off to 15% off. Pinduoduo: Launched the “10 billion consumer voucher” campaign for the first time, and upgraded the “10 billion double supplement” to “super double up.” A full discount has been introduced. Consumers can enjoy an instant discount when they reach a certain amount of money.

Overall, the activities of each platform started much earlier than the same period in '23, and the Double Eleven promotion cycle was lengthened; at the same time, all platforms have increased their discounts to consumers and brands, and the variety of activities is richer. Platform competition is becoming increasingly intense in the context of the development of the overall consumption structure in the direction of cost-effective consumption. The positive attitude of the platform has a positive effect on boosting consumer demand and the sales performance of brands.

On the first day of pre-sale on the Tmall platform, sales performance was good, and consumption was high

According to the results of the Double Eleven section released by Tmall on the evening of October 14, the popularity of this Double Eleven promotion is better than last year. Sales in multiple categories are more popular, and consumer demand has been released. In terms of beauty, 13 brands broke 100 million in 10 minutes of sales on Tmall, and 20 brands broke 100 million in the first 30 minutes. In terms of home appliances, the first-hour turnover of major appliances rose 765% compared to the first day of the Double Eleven pre-sale last year, with multiple brands breaking 100 million. In terms of apparel, 125 brands doubled their first-hour turnover year over year.

International brands are increasing discounts and increasing their advantages, but high-quality domestic beauty brands continue to be strong

Against the backdrop of a slowdown in the overall growth rate of the industry, market competition has intensified. According to the first-day sales list of Double Eleven announced by Tmall Beauty (October 14, 20:00-24:00), 3 domestic brands entered the TOP10. This amount was the same as Double Eleven in '23. 5 brands entered the TOP20, less than 10 of Double Eleven in '23. Among them, Perea maintained its TOP1 position, and could rise 7 places to the TOP4 ranking, Youshiyan's ranking rose 6 places to TOP7, and Ou Shiman rose 4 places to the TOP 15. Winona dropped 7 places to 12th place, and Dr. Quadi, Looking for Light, Natsudo, Huazhi, and Dr. Earle dropped out of the top 20. In comparison, the TOP10 domestic brands are relatively strong. Some high-quality domestic brands continue to catch up with the big international brands, but the performance of domestic brands in the TOP10-20 range is weak, and their market share is being squeezed.

With the intensification of competition in the industry and the rise of domestic brands, the sales performance of international beauty brands in China is gradually weakening. Against this backdrop, international brands have stepped up their promotion and planting efforts, increased the number of giveaways and investment in promotion, and have now achieved initial results. Price reduction promotions for international brands will weaken the competitive advantage of cost-effective domestic brands and place higher demands on the product and brand power of domestic brands.

Pre-sales at Li Jiaqi's live broadcast are hot, and many beauty brands have achieved outstanding results

On October 14, Li Jiaqi's live broadcast room Super Beauty Festival pre-sale began. From 8 a.m. on October 14 to October 15, the live broadcast room distributed a total of 500 million yuan of red envelopes for two consecutive days, attracting the participation of many beauty brands. According to incomplete statistics on beauty headlines, Li Jiaqi's live broadcast launched nearly 400 beauty products on the first day of the pre-sale. Domestic goods companies Perea, Huaxi Biotech, Bethany, Giant Biotech, Shangmei Co., Ltd., Freda, Shanghai Jiahua, and Yixian E-commerce all cooperated.

According to beauty headline data, as of 11:00 p.m. on the 14th, Pelaea had locked in total sales of about 550 million dollars, including 15 links with Perea brands, with sales of about 460 million. Giant Biotech has locked in sales of about 630 million, and can cooperate with the US for 4 links, with sales of about 590 million. The Estée Lauder Group has locked in total sales of about 390 million and cooperated with 21 links. Among them, its brand Estée Lauder accounts for 16 links, with sales of about 210 million. The L'Oréal Group locked in total sales of approximately 990 million, of which the Lancôme brand cooperated with 13 links, and generated sales of approximately 440 million dollars.

Overall, the popularity of this Double 11 promotion is quite good. All major platforms have shown a positive attitude. Platform competition is increasing, and the role of super anchors in the promotion continues to be prominent. The overall level of consumer participation is high, leading to leading live broadcast rooms and better sales performance of major brands. International brands are improving their advantages by increasing discounts and growing herbs, but the competitiveness of some high-quality domestic beauty brands continues to be consolidated, and they are optimistic about the development of domestic beauty brands with strong product strength and brand power.

Investment advice: The overall recovery in consumption is weak, but beauty consumption is still booming. High-quality domestic brands with high cost performance have taken on the consumption downgrade shift of many high-end international brands. Combined with the company's own R&D capabilities and enhanced brand power, they have more room for development, and continue to be optimistic about the long-term development of high-quality domestic beauty companies. Competition in the industry intensifies and brand differentiation continues to increase. Beauty brands with technological research and development advantages, classic product development capabilities, and the ability to shape a strong brand image will have a competitive advantage.

Target aspects: Focus on recommending targets that have built strong product strength and brand power, such as Perea (603605.SH) and Bethany (300957.SZ), which are high quality tracks; targets that focus on effective skincare, such as Giant Bio (02367) and Marumi Co., Ltd. (603983.SH), are also expected to benefit.

Risk warning: New industry regulations and policy changes, market competition increases risk.