Kurt, the co-founder of the RED CHAMBER brand: Can't keep up with the fierce competition in the beauty industry? We are still striving to become the best clean beauty brand on the planet. | WISE2024 Future Consumption Conference

On November 29th, the WISE2024 Future Consumption Conference was officially held in Beijing. This conference is hosted by 36Kr Future Consumption with the theme of "Always with You", focusing on hot topics in the consumption industry. It invites more than 20 investment institutions, platform sides, brand sides, and service provider executives to jointly explore new trends and opportunities in the consumption industry. 

In the current highly competitive beauty industry, the subdivided tracks are more explosive, and there are always opportunities to create new growth curves. In recent years, relying on pure beauty, RED CHAMBER has rapidly grown from a red ocean track. Kurt, the co-founder of the RED CHAMBER brand, summarized the three major changes in user demands in the beauty market at the conference. The first is the diversification of scenarios and the daily use. The second is the multi-purpose use of a single item. The third is the enhancement of health awareness.

In response to these changes in demand, Kurt believes that pure beauty is the solution, as it can help users achieve "more easily" and "more confidently" beauty. For this reason, RED CHAMBER has made many efforts - it has created a multi-purpose cream that combines eye shadow, lipstick, and blush, reducing the user's makeup time to one minute; it has developed the first foundation in China that removes the ring 5 component, achieving the dual goals of ingredient safety and excellent makeup effect; it has jointly initiated the pure makeup group standard with the Shanghai Daily Chemical Association and also jointly released the first "White Paper on the Pure Makeup Industry in China", and so on.

Kurt stated that RED CHAMBER has chosen an innovative path, that is, to provide users with a new and better product experience through pure beauty - with a pure formula, convenient products, and a natural makeup look, providing a good solution for users who pursue low-burden beauty and a high proportion of natural ingredients.

"We have set a goal for ourselves to become the best pure beauty brand on the planet."

Kurt, the co-founder of the RED CHAMBER brand

The following is the speech record of Kurt, edited and sorted by 36Kr:

Hello everyone, we are a beauty brand. Specifically, we focus on the pure beauty part in the beauty industry. Compared to traditional beauty products, pure beauty products are safer and more transparent in terms of ingredients. We believe that this is not only a continuation of traditional beauty products, but from a higher level, it is an upgrade of the traditional beauty category.

The Historical Evolution of the Beauty Industry

Today, I would like to share the development process of pure beauty in China, as well as our practice and exploration in this field. We divide the nearly hundred-year development of the beauty industry into four stages:

First, the synthetic beauty period. This period was after the end of World War II, when the petrochemical industry developed rapidly, and mineral oil, including fragrance and pigment components, was widely used in cosmetics. These products did make the beauty products more effective, but correspondingly, they also caused skin problems. So in this period, in more mature beauty markets such as France and the United States, a large number of complaint events were reported, with users experiencing serious skin problems after using cosmetics.

Second, the dangerous beauty period. At this time, not only synthetic ingredients were used, but also hormone special effect ingredients were added. It did make people more beautiful faster and better, but the problems that followed were even more serious. At that time, a more representative international event was that in Japan, a stubborn skin disease called facial melanosis appeared, and the affected users sued the cosmetics company and won the lawsuit after four years. In China, a mercury poisoning incident also occurred in Guangxi due to excessive mercury in cosmetics, causing skin problems.

Third, the beauty regulation period. People's demand for the health and safety of cosmetics is becoming more and more vigorous, and the degree of attention is getting higher and higher. Both Europe, the United States, and China have issued new cosmetic hygiene regulations, and the standards for the use of ingredients, restricted ingredients, and usage amounts have been redefined, and there are also more strict requirements in the production process.

Fourth, the beauty explosion period. After the regulation period, since 2010, the entire domestic beauty market has experienced a significant explosion. Both foreign brands and domestic brands have undergone a significant growth. Domestic brands such as Proya, Perfect Diary, and Florasis have developed rapidly in recent years. In just four or five years, their scale has grown from zero to several billion, and many have also entered the capital market, forming fierce competition with foreign brands.

The Great Potential of the Beauty Market

Let's take a look at the market pattern of foreign brands and Chinese local brands in this period. In 2021, the market share of foreign brands was still 52.7%, and by 2023, the market share of Chinese local brands reached 50.4%.

Looking at the market share of the two neighboring countries, the market share of local brands in South Korea is 73.3%, and the market share of local brands in Japan reaches 80%. Referring to the two markets in Japan and South Korea, the market share of domestic local brands in China has a growth space of 20 - 30%. This is the market pattern of the big beauty industry.

Specifically to the makeup category, compared with the data in the United States, the makeup market in the United States was 130 billion in 2022, and the makeup market in China was 60 billion. Looking at the per capita consumption amount of the two countries, the per capita consumption amount of makeup in the United States is 390 yuan, while the per capita makeup consumption in China is only 42.5 yuan. Combining the gap in market share mentioned earlier, when looking at these two aspects together, we judge that the entire makeup market in China still has more than 10 times growth space in the future.

From the perspective of the makeup category, according to the data from Xiaohongshu, the search volume for lipstick and lip balm categories is far ahead, and lip gloss ranks second. This reflects that the Chinese makeup market is still in the middle and early stages, and consumers in some regions focus more on lip makeup when it comes to their perception of makeup. More subdivided categories such as foundation, eye shadow, and blush still have huge growth potential in the future.

The Three Major Changes in User Demands

Next, let's look at the changes in users in the beauty market:

The first change is the change in scenarios and usage methods. In the past, people thought that makeup was mostly done at home. Every girl had a makeup table at home, and they would put on a beautiful makeup at the makeup table before going out. Now, people wash their faces at home and go out directly. They put on makeup in taxis, subways, and high-speed rails. Some people even put on makeup at the office while getting paid. Why has this happened? On the one hand, people are really in a hurry, especially in first- and second-tier cities. Second, putting on makeup has become very daily, and people no longer treat it as a very grand thing. This is also a good thing for the brand market.

The second is the change of multi-purpose use of a single item. On Xiaohongshu, the search for the term "multi-purpose makeup" increased by 81% in the first half of this year compared to last year, and several brands that predicted this trend in advance and made products have achieved a six-figure growth. Multi-purpose use is not only in beauty, but also in other consumer categories, and it is also related to people's consumption needs. People don't want to carry a bunch of single items in a big bag when putting on makeup. They hope it is more convenient, and it is best to use one product to complete the makeup process.

The third is the enhancement of health awareness. The two pictures on the left. The first is the change in the number of users of Meixiu. Meixiu is an APP for the ingredients of beauty products. In 2019, it had 7 million users, and in 2024, it has 40 million users, representing more than 40 million users checking whether the ingredients of the cosmetics they bought are safe on the APP.

In the consumer trend report of iResearch, two indicators are also mentioned - product ingredients and product efficacy. The proportion of users paying attention to product ingredients far exceeds that of product efficacy. I was very surprised when I first saw this data. For those who make beauty brands, seeing this data will also be a bit sad because a big question mark is placed on the users' trust in you. People are not willing to listen to you talk about how effective your product is. They are more willing to check in the APP whether the ingredients are good and whether they can be used. But thinking optimistically, this is also an opportunity for the brand. After helping users solve the problem of ingredients, this market actually belongs to you.

Pure Beauty is the Solution

Based on the three user changes we have seen above, we have summarized two demands of users. One is to hope to become beautiful more easily. The second is to hope to become beautiful more confidently. How to solve this problem? Our solution is pure beauty. We judge that if we can use pure beauty to help users solve this problem, then pure beauty will surpass traditional beauty and achieve the goal of the initial category upgrade.

The first is to make consumers become beautiful more easily. There are several dimensions to this. One is that the ingredients are difficult. Users cannot figure out the ingredients in the product and have to search for them on the Internet. The second is that there are too many types of products. There are too many categories of cosmetics. The third is that there are too many makeup techniques. How to match the colors of lipstick, blush, and eye shadow? What tools to use for applying makeup? Use a brush or a powder puff?

In conclusion, can we use one product to help users? Therefore, through texture innovation, we have made a multi-purpose cream that integrates eye shadow, lipstick, and blush.

     Kurt, the co-founder of the Zhu Zhan brand at the 36Kr Future Consumption Conference

Who are the users of this product? One is young users. They are always very busy, and it is really best to have a multi-purpose product. The other is mature users. They are more rational. This multi-purpose cream product is both novel and fun, with unique features, and at the same time can meet the needs of users. Based on this product, we have made texture distinctions and created multi-purpose mud and multi-purpose sticks to meet the subdivided demands of the subdivided user market. Different texture products will have different makeup effects, but overall, they are all multi-purpose creams that can be used as eye shadow, lipstick, and blush.

As for how to use this product, just apply it to the nose, cheeks, ears, and mouth. There is no need to worry about how to match the products, how to match the tools, and how to match the colors. When users actually use it, they can even finish putting on makeup in less than one minute, greatly improving efficiency.

The second problem is how to make consumers become beautiful more confidently. In 2020, when we first started doing pure beauty in China, the entire market was indeed blank, but the supply chain, R & D, and formula were also blank. We started from scratch and finally found one from dozens of domestic supply chains to jointly research and develop pure beauty. First, we abandoned the ingredients that are recognized as not usable globally. Second, in order to ensure that the product can compete in the market, we made the first foundation without adding ring 5 and talcum powder. Ring 5 is the core component of traditional foundation. Currently, the mainstream products on the market use the ring 5 component. We are the first brand in China to remove this component to make foundation.

Based on the foundation without ring 5, we subsequently developed products such as loose powder, air cushion, and powder cake with a high proportion of natural ingredients. We are the first brand in China to introduce the international natural index standard into the makeup field. For example, our powder cake truly achieves a 99% natural ratio. Moreover, what makes us more proud is that we have received positive feedback from users on the product, achieving the dual goals of ingredient safety and excellent makeup effect. In addition, the multi-purpose stick is the first natural skin-nourishing and multi-purpose makeup in the market, which can remove dead skin and reduce the occurrence of lip lines.

We have chosen an innovative path, that is, to provide users with a new and better product experience through pure beauty - with a pure formula, convenient products, and a natural makeup look, providing a good solution for users who pursue low-burden beauty and a high proportion of natural ingredients.

Therefore, our brand concept consists of "Sustainable Beauty", "Sustainable Environment", and "Sustainable Spirit". "Sustainable Beauty" means helping users become beautiful more easily. "Sustainable Environment" is reflected in public welfare activities related to product recycling, logistics, and packaging. "Sustainable Spirit" is more about that no matter how the world changes, the brand can stand with users and find its own outlet, thereby supporting the soul of our entire brand.

Based on the above brand concept, we have done some things in recent years. In 2023, we held an offline exhibition and set up a charity sale area outside the exhibition. The number of online shopping returns in China is in the hundreds of millions. And the products in this charity sale are all from the brand's online sales returns. These returns cannot be sold for the second time, but they do not affect normal use. According to the normal process, they would enter the scrapping process. At that time, we noticed that if so many products were scrapped, it would be a waste. We wondered if we could sell them to users who came to the exhibition through a charity sale at a certain discount and donate all the proceeds to the China Green Foundation, giving greater value to the resources that would otherwise be wasted.

This year, we jointly initiated the pure makeup group standard with the Shanghai Daily Chemical Association. This is a milestone for our brand and also a small contribution to the industry. For an industry to achieve long-term and healthy development, a standard is needed to regulate and guide. It took more than a year from planning to implementation of this standard. On this basis, we also jointly released the first "White Paper on the Pure Makeup Industry in China".

The scene of the 36Kr Future Consumption Conference

In the second half of the year, we officially launched our overseas business. We have set a goal for ourselves to become the best pure beauty brand on the planet. It sounds a bit erzhong (a bit naive or idealistic), but it is a more true thought in our hearts.

We hope to turn the brand's aspirations into a universal, enjoyable, safe, and long-lasting beauty experience that everyone can enjoy.