The Zhitong Finance App learned that SPDB International released a research report saying that according to Qingyan intelligence, as of November 10, all major e-commerce platforms had achieved double-digit GMV growth during the “Double 11" period. Among them, Taotian/ Jingdong/ Douyin increased 25.8%/10.5%/21.8% year-on-year respectively. With the overall recovery in e-commerce sales, the “Double 11" beauty sector performed well this time. The growth rate of major brands in the Chinese cosmetics industry has slowed slightly under the influence of a higher base, but under the trend of increasing investment in international brands driving a recovery in brand growth, I still believe that leading domestic brands have strong competitiveness on the popular skincare circuit. It is recommended to focus on Giant Life (02367) and Perea (603605.SH).

SPDB International's main views are as follows:

The longest “Double 11" in history has come to an end, and personal care and beauty sales are growing impressive

According to Star Map data, during the “Double 11" promotion period data (October 14 to November 11, 2024 vs. October 24 to November 11, 2023), personal care and beauty sales on integrated e-commerce platforms (including e-commerce) increased 22.5% year-on-year. According to Qingyan intelligence, as of November 10, the beauty circuit of all major e-commerce platforms achieved double-digit GMV growth during the “Double 11" period. Among them, Taotian/ Jingdong/ Douyin increased 25.8%/10.5%/21.8% year-on-year respectively. Although the year-on-year increase includes a certain increase in scale due to the extension of the promotion period, it is still believed that the growth of the “Double 11" online beauty circuit has returned to a relatively rapid growth trajectory.

The promotion period has been extended again, and the price war has cooled down

As predicted, the duration of this “Double 11" promotion has been extended once again. Take Tmall and Douyin as an example. “Double 11” was brought forward to October 14 and October 8, respectively, which is 1 week and 12 days longer than last year's “Double 11.” The lengthening of the promotion period has also provided consumers with more time to compare prices and consider. This is also to adapt to the current weak consumption environment. Based on this, it was observed that during this “Double 11" period, although low prices were still the focus of merchant competition, the competitive environment also returned to rationality. Among them, some brands broke out of the price war by adjusting giveaway packages or raising prices (compared to previous big promotions). This is mainly due to the fact that beauty brands' daily sales offers have already lowered prices, so there is little room for further price reduction during the promotion period. At the same time, breaking out of the price war also allowed the brand to reshape its brand image and have more profit margin.

Major international brands are fighting back, and domestic brand replacement is still mainstream

Compared with the strength of domestic brands during the “Double 11" period in previous years, the popularity of international brands has clearly rebounded this year. In the top 20 sales volume of Tmall Beauty's “Double 11" brands this time, international brands occupied 16 seats, which is close to last year's “Double 11" promotion, but the ranking of domestic brands has declined markedly — with the exception of Perea, which is stable at number 1 in the top ten lists, Winona's ranking has declined from fifth to ninth. SPDB International believes that the good performance of international brands in this promotion is due to: (1) increased investment in broadcasting: major international brands moved forward year on year in the Douyin channel rankings; (2) Japanese brands picked up after the nuclear sewage discharge incident, and SK-II and Skin Key brand rankings rose year on year. The overall trend of domestic substitution continues. In the same list, the domestic brand “Double 11" also ranked first last year, and is in a stable position.

The performance of major domestic beauty companies is stable

Pereyar: The company announced that during the “Double 11" period in 2024, the company's main brand Peralea ranked first in the beauty category on platforms such as Tmall, Douyin, and JD (according to GMV). Among them, the main brand Perea increased 10% +/ 60% +/ 30% + year over year on Tmall, Douyin, and JD platforms, respectively (data statistics are from October 8 to November 11, 2023 and 2024). According to SPDB International estimates, the main brand “Double 11" GMV increased by about 20% year-on-year across all platforms.

Giant Biotech: According to the company's announcement, in 2024, the “Double 11" promotion, recombinant collagen dressings, collagen sticks, focus creams and other products ranked high in various segments, with a total brand exposure of 1.38 billion. During the “Double 11" period, Kefu Mei's GMV on Tmall, Douyin, and JD channels increased by 50% +/ 100% +/ 200% +, respectively, and omnichannel grew 80% +; on Tmall, Douyin, and JD channels, respectively, grew 100% +/ 500% +/ 200% +, and omnichannel grew 150% +. Overall, Giazi Biotech's brands performed in line with expectations during the “Double 11" period.

Investment risks: Industry demand slows down; online competition for cosmetics intensifies.