Cosmetic giants who successfully transitioned with “lipstick benefits†during the economic crisis are now losing to CPI?
On December 27th, some high-end cosmetics began sharply increasing retail prices from January next year, which began in the industry. Famous high-end cosmetics brands including Lancome, Chanel, Biotherm and other brands will further increase their retail prices from January 1st next year, up by 10%. Between -20%.
“The price of cosmetics is influenced by many factors such as raw material costs, R&D investment, manpower and marketing costs, exchange rate fluctuations, taxation, inflation, and the market environment. For some newly formulated new products, price adjustments are normal and complete. Understandable." On the 28th, L'Oreal sent a statement to the newspaper to confirm the price increase.
“But the proportion of raw materials in cosmetics is very small.†A veteran of the cosmetics industry, who declined to be named, believes that the increase in raw materials of cosmetics such as animal and vegetable oils this year is not obvious, whether it is from the adjustment of raw materials or CPI. The reason for the increase in foreign investment prices is a bit "favorable."
Reasons for price increases Foreign brands are the protagonists of this round of price increases. L'Oreal Lancome almost all products are rising prices, the increase rate of 30-100 yuan between, and another brand Biotherm also adjusted its men's skin care series, in the range of 30-40 yuan, and Paris L'Oreal face series products Also raised 20 yuan.
In addition, Chanel and other cosmetics brands will also adjust the price in the near future about 10%, and the Japanese FANCL will also raise some products by 10 yuan. However, Estee Lauder and other brands with Shiseido and Opal and other brands all claim to have no notification of price increases. Both Procter & Gamble and Unilever said they have no plans to raise prices for their cosmetics.
L'Oreal Group's third-quarter financial report showed that sales increased by 5.8% from the same period last year to 4.85 billion euros, of which luxury cosmetics rose by 5.7% year-on-year, professional hairdressing products increased by 2.9%, popular cosmetics rose by 6.5%, and the Asia Pacific region surged by 11.5%. Become the second largest growth area except Latin America.
For the price increase, L'Oreal said that the company is currently being affected by "unfavorable factors such as rising raw material costs, higher tax burden levels, and rising inflation," but stressed that the group is working through internal efforts and taking various measures to overcome Reduce the pressure of unfavorable factors on the price of the product, "in order to maintain the relative stability of prices to the maximum extent, so as to protect the interests of consumers."
In fact, in the face of cost pressures, local companies feel that foreign companies are more profound. Xu Yue, deputy general manager of Australian snow, said that this year, the price of surfactants increased by 50%, menthol prices more than 2 times, raw materials, the average increase of more than 10%, but local brands are afraid to raise prices on the terminal.
The travel supplies manufacturer Ming Fai International [3.06-0.65%](3828.HK), executive director Liu Zigang, told this newspaper that the price of raw materials is not the same every quarter, and the company will adjust the price every quarter. "For us It is said that the prices of plastic granules, cotton yarns, paper, essences, etc. may be more concerned. The price of raw materials is not very obvious, but it is really rising this year."
But Tu Junguang, the managing director of Aotian Group, believes that for cosmetics companies, raw material costs only account for about 10% of the final selling price of cosmetics, and most of them are used for marketing costs such as rent, manpower, logistics, and advertising.
Taking a lipstick as an example, the main raw materials for making lipstick include oils, fats, waxes and colorants, preservatives, antioxidants, flavors, etc., which have not changed much in this year, "but in the marketing channel promotion, manual and In terms of packaging and so on, this part of the overall increase of 30% over the beginning of the year.†Feng Jianjun, general manager of Guangdong Jingshi Marketing Management Consulting Co., Ltd., said that retail sales of cosmetics this year rose about 15%, which is comparable to previous years.
In general, major brands of cosmetics will be adjusted every one or two years. As long as one or more brands have gone up, other brands will follow suit. "P & G rose, we will rise." An Unilever marketing department's understanding of price increases is more straightforward.
"Into the word" conspiracy?
However, in the view of the above-mentioned cosmetics industry veterans, the rising prices of foreign high-end cosmetic brands such as Lancome and Biotherm are more of an industry behavior, and the reason is attributed to changes in the CPI. “The reason is a bit far-fetched.â€
According to his algorithm, “In the case of active agents, cosmetics rarely use active agents. They are only used in facial cleansers. They are only about 3% to 4% of the dosage, so the 50% price increase is for the entire cost. It will only bring about 1%-2% of the impact, while the production cost of cosmetics accounts for less than 10% of the final selling price, affecting 1%-2% in these ten points, then there is only a thousand points in the entire cosmetics price. The impact of one to two.†He believes that adjusting the price by 10% to 20% based on the impact of this one-thousandth is hardly convincing.
In the face of doubt, L'Oreal’s statement to the newspaper stated that for most of the products, prices have not only failed to increase, and even some products have lowered their prices. "For example, a month and a half ago, L'Oreal's shampoo products in Paris reduced the price."
However, the above-mentioned industry sources pointed out that this round of price increase is the "entered in the number" product (the Ministry of Commerce imported batch number of cosmetics products), reflecting the foreign brands want to quickly expand the market and maximize profits.
"After the opening of the WTO, our country promised to lower tariffs, and domestic cosmetics may face a big challenge." However, he believes that foreign cosmetics companies are using this time-consuming period (new approval of imported cosmetics is extremely difficult, domestic brands Did not grow up), accelerate the monopoly of the market, increase profits, "enter the brand name fanfare, quickly expand the market, increase market launches, advertising, etc., and then get profits from consumers who come back."
He believes that the biggest gainers in this round of price hikes will be parallel shops. “Sasa and Qianse shops have more chances because they still have the same price, which may cause some people who originally went to department stores to transfer to this kind of Some stores, whose own purchase price is relatively low, or increase sales, or increase prices, will also give retailers a red envelope at the end of the year."
However, P&G's response to “why the official guidance price has not changed, but channels have risen by around RMB 5†has also pushed the responsibility to retailers. “Value is not only reflected in product prices, but different consumers also have different definitions of value. ... The final price paid by the consumer is determined by the retailer."
On December 27th, some high-end cosmetics began sharply increasing retail prices from January next year, which began in the industry. Famous high-end cosmetics brands including Lancome, Chanel, Biotherm and other brands will further increase their retail prices from January 1st next year, up by 10%. Between -20%.
“The price of cosmetics is influenced by many factors such as raw material costs, R&D investment, manpower and marketing costs, exchange rate fluctuations, taxation, inflation, and the market environment. For some newly formulated new products, price adjustments are normal and complete. Understandable." On the 28th, L'Oreal sent a statement to the newspaper to confirm the price increase.
“But the proportion of raw materials in cosmetics is very small.†A veteran of the cosmetics industry, who declined to be named, believes that the increase in raw materials of cosmetics such as animal and vegetable oils this year is not obvious, whether it is from the adjustment of raw materials or CPI. The reason for the increase in foreign investment prices is a bit "favorable."
Reasons for price increases Foreign brands are the protagonists of this round of price increases. L'Oreal Lancome almost all products are rising prices, the increase rate of 30-100 yuan between, and another brand Biotherm also adjusted its men's skin care series, in the range of 30-40 yuan, and Paris L'Oreal face series products Also raised 20 yuan.
In addition, Chanel and other cosmetics brands will also adjust the price in the near future about 10%, and the Japanese FANCL will also raise some products by 10 yuan. However, Estee Lauder and other brands with Shiseido and Opal and other brands all claim to have no notification of price increases. Both Procter & Gamble and Unilever said they have no plans to raise prices for their cosmetics.
L'Oreal Group's third-quarter financial report showed that sales increased by 5.8% from the same period last year to 4.85 billion euros, of which luxury cosmetics rose by 5.7% year-on-year, professional hairdressing products increased by 2.9%, popular cosmetics rose by 6.5%, and the Asia Pacific region surged by 11.5%. Become the second largest growth area except Latin America.
For the price increase, L'Oreal said that the company is currently being affected by "unfavorable factors such as rising raw material costs, higher tax burden levels, and rising inflation," but stressed that the group is working through internal efforts and taking various measures to overcome Reduce the pressure of unfavorable factors on the price of the product, "in order to maintain the relative stability of prices to the maximum extent, so as to protect the interests of consumers."
In fact, in the face of cost pressures, local companies feel that foreign companies are more profound. Xu Yue, deputy general manager of Australian snow, said that this year, the price of surfactants increased by 50%, menthol prices more than 2 times, raw materials, the average increase of more than 10%, but local brands are afraid to raise prices on the terminal.
The travel supplies manufacturer Ming Fai International [3.06-0.65%](3828.HK), executive director Liu Zigang, told this newspaper that the price of raw materials is not the same every quarter, and the company will adjust the price every quarter. "For us It is said that the prices of plastic granules, cotton yarns, paper, essences, etc. may be more concerned. The price of raw materials is not very obvious, but it is really rising this year."
But Tu Junguang, the managing director of Aotian Group, believes that for cosmetics companies, raw material costs only account for about 10% of the final selling price of cosmetics, and most of them are used for marketing costs such as rent, manpower, logistics, and advertising.
Taking a lipstick as an example, the main raw materials for making lipstick include oils, fats, waxes and colorants, preservatives, antioxidants, flavors, etc., which have not changed much in this year, "but in the marketing channel promotion, manual and In terms of packaging and so on, this part of the overall increase of 30% over the beginning of the year.†Feng Jianjun, general manager of Guangdong Jingshi Marketing Management Consulting Co., Ltd., said that retail sales of cosmetics this year rose about 15%, which is comparable to previous years.
In general, major brands of cosmetics will be adjusted every one or two years. As long as one or more brands have gone up, other brands will follow suit. "P & G rose, we will rise." An Unilever marketing department's understanding of price increases is more straightforward.
"Into the word" conspiracy?
However, in the view of the above-mentioned cosmetics industry veterans, the rising prices of foreign high-end cosmetic brands such as Lancome and Biotherm are more of an industry behavior, and the reason is attributed to changes in the CPI. “The reason is a bit far-fetched.â€
According to his algorithm, “In the case of active agents, cosmetics rarely use active agents. They are only used in facial cleansers. They are only about 3% to 4% of the dosage, so the 50% price increase is for the entire cost. It will only bring about 1%-2% of the impact, while the production cost of cosmetics accounts for less than 10% of the final selling price, affecting 1%-2% in these ten points, then there is only a thousand points in the entire cosmetics price. The impact of one to two.†He believes that adjusting the price by 10% to 20% based on the impact of this one-thousandth is hardly convincing.
In the face of doubt, L'Oreal’s statement to the newspaper stated that for most of the products, prices have not only failed to increase, and even some products have lowered their prices. "For example, a month and a half ago, L'Oreal's shampoo products in Paris reduced the price."
However, the above-mentioned industry sources pointed out that this round of price increase is the "entered in the number" product (the Ministry of Commerce imported batch number of cosmetics products), reflecting the foreign brands want to quickly expand the market and maximize profits.
"After the opening of the WTO, our country promised to lower tariffs, and domestic cosmetics may face a big challenge." However, he believes that foreign cosmetics companies are using this time-consuming period (new approval of imported cosmetics is extremely difficult, domestic brands Did not grow up), accelerate the monopoly of the market, increase profits, "enter the brand name fanfare, quickly expand the market, increase market launches, advertising, etc., and then get profits from consumers who come back."
He believes that the biggest gainers in this round of price hikes will be parallel shops. “Sasa and Qianse shops have more chances because they still have the same price, which may cause some people who originally went to department stores to transfer to this kind of Some stores, whose own purchase price is relatively low, or increase sales, or increase prices, will also give retailers a red envelope at the end of the year."
However, P&G's response to “why the official guidance price has not changed, but channels have risen by around RMB 5†has also pushed the responsibility to retailers. “Value is not only reflected in product prices, but different consumers also have different definitions of value. ... The final price paid by the consumer is determined by the retailer."