Since its inception, Perfect Diary brand has been very clear about its consumer group, which will be young women born after 1995. This kind of consumer group has a greater degree of acceptance of network information, and is willing to try new products, but also can drive the circle around, bring new traffic for the brand. Perfect Diary also captures this psychology, and puts forward an unprecedented product concept “every consumer can be a product designer.”
This concept helped the brand get on track quickly in its early days. Through consumer feedback, perfect diary quickly attracts consumer groups with easy-to-accept pricing, and after the completion of the original accumulation of capital, perfect diary naturally will not be willing to do some low-end beauty products, the expansion of the product line has become a necessary condition for it to step on a bigger stage.
The expansion path of Perfect Diary and L ‘Oreal Group is the same: merger and acquisition expansion, so Perfect Diary is also nicknamed “China L ‘Oreal”. But in reality, what industry analysts see as the same means of expansion could not be more different.
L ‘Oreal’s acquisition and expansion philosophy is to step by step acquire well-known brands with their own proprietary technology that are more high-end than L ‘Oreal itself. Start with Lancome, which is on the verge of bankruptcy, then Biouquan, Helena, Rhine, Maybelline, YSL. With one international brand, gradually increase the value of the group, and all the acquisitions are to further expand their own product line: daily cosmetics, perfume, makeup, skin care, all categories. And these brands already have loyal customers who don’t need to build hype.
But the perfect journal is different. It is true that Perfect Diary is also supplementing its own product line, and there is no problem in the idea of filling any shortage. However, on the contrary, Perfect Diary has acquired the following brands in recent years: British makeup remover brand Eve Lom, French high-end lady brand Galenic, Taiwan functional skin care brand Dar skin’s mainland business and so on, are relatively small, less well-known brands, but also need a perfect diary push, in order to walk on the mainstream market, want to directly become the group’s cash cow, still need a period of time.
What’s more, perfect diary’s parent company Yi Xian e-commerce, listed on the NASDAQ in the United States, life is not easy. The company was threatened with delisting by the New York Stock Exchange because its share price continued to slide because it was trading below compliance standards. Yixian E-commerce risks being delisted if it fails to get its average share price back above $1 in the next six months.
Yi Xian e-commerce released 2022Q3 performance report. The report shows that Yixian e-commerce achieved revenue of 858 million yuan in the third quarter, a sharp decline of 36.1% year on year; Net loss was 211 million yuan, 41.7% narrower than the same period last year. Yixian e-commerce gross profit of 591 million, year-on-year decline of 35.2%. Gross profit margin was 68.9%. As of September 2022, Yixian E-commerce had cash and cash equivalents and short-term investments of $2.6 billion, compared with $3.14 billion as of Q4 2021.
Moreover, after the big anchors returned to live on Tmall this year, the perfect diary not only did not occupy the popular position as usual, but also did not announce the results of the shopping festival. It can be seen that the sales volume is very mediocre, because there is no perfect diary in the top 20 cosmetics list on Tmall.
From birth to now, Perfect diary has always given consumers the impression of affordable beauty products, and it is precisely because of this parity that consumers can tolerate the imperfections of its products. But perfect diary also know that long-term cultivation of low-end products, profit margins will only be repeatedly compressed, can be used to expand the way to enhance their brand value, in today’s era, has been difficult to go through, especially in the brand itself completely rely on marketing hype.
