Cathay Pacific Haitong: 618 warm-up starts, beauty care brands are expected to explode at multiple points

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that compared to previous peak pre-sales times for various platforms, the three major platforms Tmall, Douyin, and JD will all set to launch the first day of the big promotion on May 13 this year, and traffic competition is even more intense. Since the beginning of the year, Douyin and Taobao and Tmall have successively introduced preferential policies, including service fee reduction/rebate incentives. The platform is shifting from implementing a low price model to a stage of balancing user experience and merchant growth. Domestic products themselves are making efforts to innovate and upgrade their products, optimize their operating matrices, and achieve multiple explosions with the support of traffic. The lead is expected to continue to boost their impressive performance. Structural opportunities are prominent in the beauty protection sector. The 618 platforms extend the promotion cycle, simplify gameplay, and increase support for merchants. Domestic products are striving to innovate and upgrade products and optimize the operation matrix, and the brand is expected to explode more.

Cathay Pacific Haitong's main views are as follows:

The pace of marketing continues to move forward, and platform competition is more intense

Looking at the event cycle, compared to the previous peak of pre-sale times on various platforms, this year the three major platforms of Tmall, Douyin, and JD will all set the first day of the promotion to launch on May 13, and traffic competition is even more intense.

Tmall: Cancelling the full reduction and changing it to a discount. The core strategy is “integrated content collection”. The first wave of early access sales will begin at 8 p.m. on May 13. The first wave of early access purchases will begin at 8 p.m. on May 13. The final payment and spot purchase period will be from 8 p.m. on May 16 to 12 p.m. on May 26, starting one week earlier than in '24.

Douyin: The first phase of the target “larger scale, better products, better experience” campaign is from May 13 to May 26, and the official period is from May 27 to June 18, one week ahead of 24 years.

JD: The promotion began on May 13, 18 days earlier than in '24, and six surprise day events will be set up during this period.

Expanding external traffic entrances and supporting brands with internal subsidies

Taotian's “Red Cat Plan”: Taobao Tmall signed a strategic cooperation with Xiaohongshu to jointly establish a tripartite account. Brand merchants can observe the effects of the entire link from planting to placing an order. Taobao Tmall will also increase investment to heat and stream the merchant's planting notes. The two sides have jointly added an “advertising chain” function under the notes, so that brand merchants can grow plants directly within Xiaohongshu. The merchant subsidy side invested 3 billion in red envelope subsidies, including red envelope incentives, talent rebates, and traffic boosts.

JD's “Jingchuang Double Hundred Plan” and “Pilot Program”: The former plans to invest more than 10 billion dollars in traffic and 2 billion yuan in cash in 2025 to help merchants achieve rapid sales growth through live streaming and short videos; the latter supports advertising during the 618 period and grants 100 million advertising incentives. Furthermore, the takeout business launched on the JD platform this year will also become a high-frequency traffic portal.

Douyin: In addition to the nine major merchant support policies introduced by the platform at the beginning of the year, during the 618 period, the product card commission-free campaign will be opened to all merchants (which can cover the whole of 2025), and traffic incentives and platform consumer voucher support will be provided for participating in instant discounts and direct discounts. As an SS category for beauty, you can enjoy up to 6% and 15% rebate rewards during the early and official periods, respectively.

Focus on the single product explosion and brand-side profit recovery

Since the beginning of the year, Douyin and Taobao and Tmall have successively introduced preferential policies, including service fee reduction/rebate incentives. The platform is shifting from implementing a low price model to a stage of balancing user experience and merchant growth. Domestic products themselves are making efforts to innovate and upgrade their products, optimize their operating matrices, and achieve multiple explosions with the support of traffic. The lead is expected to continue to boost their impressive performance.

Investment advice

Structural opportunities in the 2024 and 25Q1 beauty care sector stand out. They are optimistic about the long-term growth of beauty and personal care companies under product innovation. 618 platforms extend the promotion cycle, simplify gameplay, and increase support for merchants. Domestic products are striving to innovate and upgrade products and optimize the operation matrix, and the brand is expected to explode more. It is recommended to lay out targets that have product innovation capabilities and benefit from racetrack dividends:

1) Personal care sector: Recommending new channels to help innovate products: Ruohuchen (003010.SZ), Dengkang Dental (001328.SZ), Runben Co., Ltd. (603193.SH), and Lafang Jiahua (603630.SH).

2) Beauty and Aesthetics sector: Segmented circuits are expected to grow rapidly under ingredient innovation and emotional value. We recommend brand-driven high-end domestic products Mao Geping (01318), restructuring Collagen Circuit Giants (02367), Jinbo Biotech (832982.BJ), Marumi Biotech (603983.SH), and multi-brand expansion of Shangmei Co., Ltd. (02145), Pereya (603605.SH), Shanghai Jiahua (600315.SH), etc.

Risk Alerts

Competition in the industry intensified, and the incubation and promotion of new products fell short of expectations.