K-Bright, Unilever’s only self-developed brand, is on the verge of losing its foothold in China
On February 2, a search by a reporter from Beijing Business Daily found that many of the flagship stores of K-Bright, a skincare brand owned by Unilever, had been closed, and some sellers on Taobao were clearing their stock at low prices, and said they would not sell it again.
In recent years, the continuous expansion of China’s beauty market has become the main battlefield of competition among brands, and Unilever has also become one of the competitors. However, it is not clear that Unilever will be able to rely on an “acquire, acquire and acquire” strategy to gain a share of the market after the collapse of its own brand, which was expected to be highly developed.
Flagship stores on multiple e-commerce platforms were closed, Taobao stores were cleared at low prices… K-Bright, Unilever’s in-house brand, seems to be pulling out of China, as has been reported online.
A search by a reporter from Beijing Business Daily on February 2 found that flagship stores of K-Bright, Unilever’s self-developed brand, on e-commerce platforms such as Taobao, JD.com and Xiaohongshu have all been closed. K-Bright products on JD.com and Xiaohongshu have also been removed from the shelves. Although there are still a few K-Bright products for sale on Taobao Tmall, the customer service of many Taobao stores said that the K-Bright products are being cleared at low prices.
The customer service of a Taobao store named “Paris Xiaojing” said that the brand’s products are currently on clearance sale, but may not be available in the future. Shanghai Left-Right cosmetics franchise shop customer service also said that the current brand products in the low clearance. Previously, K-Bright Aurora Bottle Essence was sold for more than 300 yuan, but now it’s only about 80 yuan.
In addition, K-Bright’s official Weibo account and WeChat official account have both stopped updating.
Accompanied by the above situation is the news that K-Bright will withdraw from the Chinese market. Sources said that K-Bright will withdraw from the Chinese market, and is currently in the process of liquidation. In this regard, Beijing Business Daily reporter contacted Unilever for an interview, as of this publication did not receive a response.
It is known that K-Bright is a Korean light luxury skincare brand launched by Unilever in 2018. Its products include star single products such as “Aurora Botter” essence and “Little Ice Beadle” freeze-dried powder. Meanwhile, K-Bright also covers subdivided categories such as flour, toner, emulsion and face cream, with a total of 11 SKUs, and the product price ranges from 98-328 yuan.
When K-Bright Cabelli just entered the Chinese market, it adopted the WeChat store for its debut, but failed to enter Tmall and JD for the first time. For the layout of offline channels, although a dedicated operation team has been set up, the expansion plan of CS channel has been shelved and has not been really implemented, so the products are mainly sold online. In terms of product experience, many Chinese netizens on Taobao, Xiaohongshu and Weibo reported that the product experience was not good and the product packaging design was “unreasonable”. In terms of sales, K-Bright’s marketing method of giving away toilet detergent was ridiculed by netizens as “weird”.
Lai Yang, vice president of Beijing Society of Business Economics, said that Unilever’s brand positioning at the consumer level is more in the aspect of daily cosmetics and care products, while in the field of beauty makeup, Unilever does not have a very outstanding brand and consumer base. Based on this, even if a light luxury brand like K-Bright is independently researched and developed, it will be difficult to develop due to the lack of a certain market user base in the early stage.
Rely on “acquisitions” to conquer the Chinese market
With the continuous expansion of the domestic cosmetics market, China has become one of the main battlegrounds for various brands. Unilever has also been promoting its acquisition of brands into the Chinese market.
According to incomplete statistics, from March 2015 to 2019, Unilever has completed a total of 17 acquisitions in the field of beauty makeup and personal care. Unilever has also introduced all the brands it bought into the Chinese market.
In 2017, Unilever launched Hourglass, a recently acquired high-end cosmetics brand, into China; In September of that year, Unilever acquired AHC from private equity firm Bain Capital and Goldman Sachs for 2.27 billion euros, pushing the brand’s presence in China in 2018. In 2019, Unilever introduced high-end Hollywood skin-care brand Katesomerville; In 2020, it introduced the high-end skincare TATCHA, which was acquired by 3.4 billion yuan.
In the process of continuous acquisition, Unilever was also gradually adjusting its structure, and to the high-end layout. It is understood that the acquisition of a number of brands, involved in four high-end products, including Ren, Kate Somerville, Hourglass, Tatcha. At the same time, Unilever is selling some low-end, niche brands. Earlier, Unilever said it would sell some of its smaller persona brands to tidy up its portfolio and move into faster-growing areas.
Industry insiders said Unilever has been building up its beauty pyramid in the Chinese market by acquiring a number of light luxury beauty brands while trimming down its less profitable businesses.
At the beginning of 2021, Unilever and Hangzhou GoLong Holding Co., Ltd announced the establishment of a joint venture, GoUni. Unilever said that it would work with Hangzhou GoLong to build a local Chinese team to operate cutting-edge high-end beauty brands and focus on the introduction and incubation of overseas cutting-edge high-end brands. It is understood that Hangzhou GoLong has helped Procter & Gamble, Johnson & Johnson successfully introduced a number of brands into the Chinese market. Clearly, the introduction of acquisitions is still a theme for Unilever.
Lai Yang said that the advantage of the acquisition strategy is that it can directly integrate existing resources without investing too much in research and development, and quickly achieve market promotions. However, there are also inevitable shortcomings, such as uneven brands, different levels of research and development, and different product quality. It is difficult to form a unified plan between brands and the overall development of enterprises, just like a mess of sand. Even some products may face certain risks due to quality design and other problems.
As Unilever’s only home-grown brand in recent years, K-Bright has been placed high hopes. Unilever China officials have said that the brand is mainly to further enhance Unilever’s professional position in the Asian beauty market and global personal care category. But that hope has been dashed as K-Bright’s China market has stumbled.
The independent research and development of the brand failed to achieve better development, Unilever can only hope in the “bought brands”. At present, most of the beauty brands Unilever has acquired have entered Tmall International. Except for AHC sales volume, sales of other products are mediocre. According to the sales data on Taobao, 493 people paid for the top-selling products in the overseas flagship store of Tmall, a high-end skincare brand. At Hourglass, the cosmetics brand, 578 people paid for its top-selling products in its overseas flagship stores.
In contrast, its biggest competitor Procter & Gamble’s SK-LL flagship store has 27,000 payers for the highest sales volume of products. The highest sales volume of Olay’s official flagship store was 45,000 people. Unilever, by comparison, has no advantage.
In addition to foreign brand challenges, the rise of domestic brands also forms a certain challenge. In the field of cosmetics, Perfect Diary ranks No. 1 on the 2020 Singles’ Day makeup list, followed by Florasis. In terms of skincare brands, the monthly sales volume of the whitening series products launched by Proya on Taobao is basically around 10,000, while the average sales volume of Unilever is less than 1,000+. In addition, the old brands such as Shanghai Jahwa and Marubi are also constantly laying out the middle and high-end product system, and the emerging web celebrity brand is constantly rising. It is not easy for Unilever to lay out its strategic layout only through “acquire, acquire and acquire”.
Xu Xiongjun, a strategic positioning expert and the founder of Shanghai Jiude Positioning Consulting company, said that Unilever does not have strong brand recognition in the field of beauty makeup for consumers, especially compared with L ‘Oreal, Estee Lauder and other brands, brand recognition is not dominant. In addition, due to the lack of independent research and development, its products are not original enough, and it has not formed its own user accumulation in the beauty makeup field.
At the same time, says Lai Yang, Unilever has too much recognition in the area of cosmetics, and it will be difficult to transition to high-end beauty products. The positioning nature of its own enterprise development has limited Unilever’s development in the field of beauty makeup. In addition, as there is no independent research and development and the lack of independent research and development, it is difficult for enterprises to form their own barriers, and it is difficult to form strong competitiveness in the long-term development.