Text|Tu Lin
Source | Mantis Finance (ID: TanglangFin)
Since the beginning of this year, domestic cosmetic contact lenses have been favored by capital frequently.
In January 2020, 4iNLOOK completed a 200 million yuan A+ round of financing;
In April 2020, Meitonghui, a vertical e-commerce platform for Meitong, completed strategic financing;
In May 2020, COFANCY completed the tens of millions of Pre-A round of financing;
In June 2020, MOODY completed a round A financing of 60 million yuan;
In October 2020, Kerala has successively completed Pre-A and A rounds of financing with a cumulative amount of nearly 100 million yuan.
Among these brands, there are "old-timers" like 4iNLOOK, which has been established for 12 years, and "small fresh meat" such as COFANCY and MOODY, which were just born last year.
Why did the domestic cosmetics that were not “out of the circle” in the past suddenly rise? And behind the frequent optimism of the capital market, who is more likely to become the "unicorn" in the industry?
Why did domestic cosmetics suddenly rise?
The term "cosmetic contact lenses", on the surface, is the category name of products such as "color contact lenses", but in fact it is a registered trademark of Johnson & Johnson.
Although Johnson & Johnson has strictly stated that " all kinds of cosmetic lenses that are not distributed by Johnson & Johnson can not be called cosmetic lenses on the market." But what is helpless is that both consumers and the entire market have apparently acquiesced that cosmetic contact lenses represent a product category.
Before understanding the cosmetic contact lenses market, we need to briefly understand the "cosmetic contact lenses".
From the perspective of the wearing cycle, there are daily, semi-monthly, monthly, quarterly, semi-annual and annual cosmetic contact lenses. Generally speaking, the shorter the wearing period, the higher the frequency of replacement, the higher the hygienic coefficient and the less damage to the eyes.
From the material point of view, there are hydrogels and silicone hydrogels to choose from. In terms of eye health and wearing comfort, silicone hydrogels are superior to hydrogels. Therefore, the price of silicone hydrogel lenses is generally slightly more expensive.
From the point of view of the production process, the difference between a cosmetic contact lens and an ordinary contact lens is the addition of a "pigment layer". Therefore, most of the contact lens brands represented by Johnson & Johnson use a process called "sandwich technology" to prevent the pigment layer from directly contacting the eyes.
From Haichang, which brought contact lenses to China as early as 1985, to Johnson & Johnson, which first launched its cosmetic contact lenses in China in 2004, to Choli from Korea and luna from Japan, which were active in the early days. These foreign brands are almost all in the Chinese cosmetic contact market.
So, why did domestic cosmetic contact lenses fail to develop?
On the one hand, domestic brands of cosmetic contact lenses started late. The well-known national brand "Halison" was only established in 2009. By this time, overseas brands including Johnson & Johnson, Haichang, Bausch & Lomb, etc. had already occupied most of the Chinese market.
For products with high safety requirements such as contact lenses, most consumers will give preference to brands that already have market recognition. Therefore, it is actually very difficult for Xinsheng National Brand to grab the market.
On the other hand, unscrupulous pupils and imitation products have consumed the market's patience with domestic cosmetics. Hitomi is the "cosmetic contact agent". Those who are familiar with cosmetic contact lenses know that in the past, the purchase channels of cosmetic contact lenses were actually very single. Brands such as Johnson & Johnson, Bausch & Lomb and Haichang only officially entered Tmall in about 16 years. Therefore, the purchase of cosmetic contact lenses at that time basically relied on purchasing agents and Wechat merchants.
The "agent" link in the middle gives unscrupulous merchants a chance to take advantage of the loopholes. According to a shopkeeper who has been engaged in the cosmetic contact industry for many years, the cost price of domestically labeled imitation products is only 2-8 yuan. However, as far as the manufacturing process of cosmetic lenses is concerned, it is difficult to guarantee the safety of the product at this price.
Needless to say, the harm of the "three noes" cosmetic contact lenses can range from inflammation of the eyes to necrosis of the cornea or even blindness...
As a result, for a long time, domestic cosmetic contact lenses have not been able to have their own voice in the market.
But in recent years, the situation has quietly changed. According to "China Optical Technology Magazine", the number of European and American brands in the domestic contact lens market is gradually declining in recent years. From 2017 to 2019, it dropped from 30% to less than 20%. However, the share of Chinese and Japanese brands has continued to rise, from 50% to 60%.
Behind the change in the situation, first of all, market supervision played a role.
On June 1, 2014, the revised "Regulations on the Supervision and Administration of Medical Devices" were formally implemented. The US contact lenses belong to the third category of medical devices and are also covered by the Regulations.
After the "Regulations" was promulgated, according to the Beijing Food and Drug Administration, contact lenses, especially colored contact lenses, are included in key supervision targets. According to the new method, businesses who sell contact lenses without a "medical device business license" will be punished at least Starting at 50,000 yuan.
Under the instructions of the new "Regulations", market regulatory authorities in many places have successively launched special inspections on US contact lenses.
Under the heavy blow, domestic small workshops and the "three noes" brand have gradually been rectified. The mixed atmosphere of the entire cosmetic contact lenses market has finally improved.
Secondly, the domestic consumer market for cosmetic contacts is becoming more mature.
Ten years of premise and cosmetic contact lenses, many people will associate it with labels such as "non-mainstream" and "unsafe". But after a long period of market precipitation, consumers' perceptions of cosmetic contact lenses have changed.
In Xiaohongshu, the number of notes related to cosmetic contact lenses exceeds 610,000. Under the topic of TikTok's “Shooting Contacts Recommendation”, the number of related videos has already exceeded 30 million.
It can be seen that the high thresholds of US contact lenses that were difficult to purchase and few choices in the past are gradually being broken, and the entire consumer market has matured.
Finally, the "national brand style" in the beauty field has become a catalyst for the rise of domestic cosmetic contact lenses.
As we all know, the popularity of the national brand in the entire beauty field is expanding.
Under the influence of "restricted Korean orders" in the past few years, consumers' impression of Korean makeup is gradually being diluted. At the same time, national-brand beauty products such as Perfect Diary and Huaxizi are taking advantage of the trend, which has gradually increased consumer confidence in domestic brands.
In the past, when buying cosmetics, because they had no choice, they had to buy foreign brands. Nowadays, there are more and more new domestic brands. Driven by psychological factors such as convenience and quality, national brands have gradually gained the favor of consumers.
Similarly, "Guofeng" has also blown to domestic cosmetic contact lenses, allowing new brands including COFANCY, MOODY, etc. to grow rapidly. Data shows that only 2 months after MOODY went online on Tmall, monthly sales have exceeded 1 million. The growth rate is considerable.
In short, under the help of multiple factors, the domestic cosmetic contact lenses brand that has undergone nearly ten years of precipitation has finally ushered in a "breaking circle" trend.
Behind the "preferences" of capital, who has more opportunities for "old predecessors" and "small fresh meat"?
Of course, the capital market is optimistic about the domestic cosmetic contact lenses brand, more because of its broad growth space in the future.
According to the China Report Network "Analysis Report of China's Cosmetic Contact Lens Industry in 2020", by 2020, the number of myopia patients in my country will reach 700 million, and the prevalence of myopia in the 16-24 year old group will reach 94%.
And this part of the group happens to be the most concerned generation Z youths, most of them value "appearance." Therefore, cosmetic contact lenses that can take into account both "correction of vision" and "enhanced appearance" have a greater opportunity for development.
What's more worth mentioning is that the data shows that the market penetration rate of contact lenses in China is about 10%, far lower than 40% in the United States and 20% in Japan. This means that the entire US contactor market has not yet been squeezed into the Red Sea, and the "Nuggets" have a great chance of success.
In addition, although cosmetic contact lenses can only be regarded as a small category, the dividend period of the market segment has arrived.
Judging from the new consumer brands that have become popular this year, Sanban is aimed at coffee, Vitality Forest is aimed at sugar-free sparkling water, and lululemon has won the hearts of consumers with just a pair of yoga pants.
From this point of view, it is not surprising if the US contactor circuit will usher in a development boom in the future.
Currently, domestic cosmetic contact lenses can be roughly divided into three categories. The first category is traditional contact lens brands represented by Weikang and Hilion. The first category is channel brands represented by 4inlook and miomi. The remaining category is the new cosmetic contact lenses represented by MOODY and COFANCY.
From the initial financing information, except for traditional contact lens brands such as Weikang and Hilion, the latter two brands are all gaining the favor of capital.
So, among them, who is more likely to become a "unicorn" in this field?
We might as well compare the four aspects of supply chain capabilities, channel building capabilities, marketing capabilities, and R&D capabilities.
The first is supply chain capabilities.
Cosmetic contact lenses are different from cosmetic products. They belong to the category of medical devices in terms of major categories and require high professionalism in production technology. At the same time, based on the characteristics of products with a high frequency of replacement of cosmetic contacts, only by maintaining product quality can the user's repurchase rate be improved, and product quality is related to supply chain capabilities.
According to industry insiders, currently, relatively mature US contactor supply chain companies are mainly located in South Korea and Taiwan. In mainland China, there are only a few first-line foundries represented by Jilin Ruierkang Contact Lens Co., Ltd. and Gansu Kangshida Technology Group Co., Ltd..
For channel brands like 4inlook, because they mainly represent other brands, there is no need to make difficulties in the supply chain. What is more important is to do a good job of quality control to prevent poor quality products from flowing into the hands of consumers.
Kelala, who is also the "older", has reached a global strategic partnership with INTEROJO, the world's largest contact lens factory.
What about the new brand? The founding team of COFANCY stated in an interview with "Snowball" that Ketang has cooperated with the largest contact lens manufacturer in Taiwan Province.
And another brand, MOODY, seems to have the intention to spend huge sums of money to build its own production base.
In terms of stability, new brands that cooperate with first-line manufacturers and choose self-built production bases may be better than channel brands that cooperate with multiple brands. However, the new brand has not received too much market feedback due to its short establishment time, and it is currently impossible to conclude that it is absolutely superior to channel brands.
Let's look at the ability to build channels.
Sales channels are nothing more than online and offline. Among the above-mentioned brands, 4inlook and miomi, as channel brands, have offline physical stores and have been rooted offline for many years. It is not difficult for it to enter the online market, after all, offline brand awareness has been cultivated.
Kerala, established in 2009, has also laid out offline channels. Since 2018, Ke La La has successively opened more than ten store counters. According to the news on its official website, Kerala will speed up the expansion of offline stores. It is estimated that the number of stores nationwide will reach 100 in 2021.
The new brands COFANCY and MOODY are real online brands, and they have been on Tmall for a short time.
It is true that these two new brands have achieved good sales through high exposure. But before them, there are powerful "old men" like Ke La La occupy the head position. Data shows that starting from May this year, the sales of Kerala have further surpassed international brands such as Haichang, Bausch & Lomb, Johnson & Johnson, becoming the No. 1 brand of color pupils in all categories on Tmall.
On the whole, in terms of sales channels, the new brands are far less advantageous than the previous old brands.
Then there is marketing ability.
In the new consumer era, brands want to grow quickly and cannot do without "marketing."
In terms of marketing, almost all new brands have chosen Douyin, Xiaohongshu, Weibo and other content platforms. The number of marketing channels is no different from other Internet celebrity brands. The top bloggers or celebrities first create momentum for the brand, and then let the waist bloggers and amateur bloggers help them continue to increase their voice.
From the perspective of marketing effects, the same model from MOODY's Yu Shuxin and the same model from COFANCY's Anqi were sold out. MOODY's cross-border launch of the Little Prince co-branded model and the co-branded gift box created with Yongpu Coffee have also received a lot of praise.
In contrast, the marketing efforts of old brands are relatively weak. Take Xiaohongshu as an example. Whether it is 4inlook or Kelala, its brand is not as popular as the rising star COFANCY (COFANCY is COFANCY).
In general, new brands will be easier to "out of the circle" in terms of marketing because of the new consumption. But in terms of channel building capabilities and supply chain capabilities, it will take some time for new brands to catch up with old brands.
The last is research and development capabilities.
In fact, in addition to ensuring safety and comfort, it is difficult for the category of cosmetic contact lenses to differentiate. For brands, more is to strengthen original research and development on the pattern and color of cosmetic contact lenses to distinguish them from other brands.
At this point, the difference between independent brands and channel brands is very obvious. According to the company's data, the new brand MOODY has the highest proportion of trademark applications in the "scientific instrument" category, reaching 83.33%. The channel brand 4inlook has only 40.44%. Since the latter adopts the "consignment sales" model, a lot of thought has been spent on the "advertising sales" part.
But this does not mean that the new brand is better. After all, judging from the current financing of these brands, they will have enough funds to invest in research and development in the future. To determine the level of research and development strength between the new and old brands, there is still a waiting time.
According to the forecast of Mob Research Institute, by 2025, the market size of China's cosmetic contact lenses will reach 50 billion yuan. This means that the entire cosmetic contact industry is accelerating into an explosive period.
Among the above-mentioned dominant domestic cosmetic contact brands, who will be the first to break through may have an answer soon.
*The pictures in this article are from the Internet
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