Opportunities for new brands targeting young generation

In the recent Tmall Double11 shopping festival, the Chinese local brand Perfect Diary (完美日记) exceeded international brands including MAC and Estée Lauder to become the top brand within the makeup category for the 1st time.

The core target of Perfect Diary is 18-25 years old students or fresh graduates who just start working. These users have relatively weak consumption power. Perfect Diary’s strategy is to pursue a rapid growth of users first, even though it means sacrificing on gross margin.

New generation brands like Perfect Diary mostly focus on direct sales channels. The absence of middle dealers gives the brands full control of setting the price. Ultimately, money earned mainly depends on market size but not margin.

Market research on Chinese young generation described their consumption behavior as willful but smart. They don’t mind spending but not tempted by big brands. They do much research before buying. This gives an unprecedented opportunity to new brands. There is no better time to start a truly Chinese skincare brand right now!