Although it has a high growth rate, the story of the perfect diary is still a long way from the next l'or é al. The first reason is its pricing strategy. Cosmetics are famous for their high profit margin, which proves that their huge investment in brand building is reasonable. Although the low price helped PD enter the Chinese cosmetics market, it also affected its profit margin. According to insiders, the average profit margin of major international brands has reached 70%, and the marketing expenses of perfect diary have accounted for more than 40%~50% of its revenue.
We have seen that the offline stores of perfect diary have invested in better brand logo design and more expensive decoration costs, but it is doubtful whether this will improve the profit margin of perfect diary. In addition, in the 618 tmall promotions, the product price of perfect diary was extremely low, which made consumers doubt the product quality and the real production cost.
At present, the number of fans of perfect diary has reached 20million. Its online marketing has almost reached the ceiling. Going abroad and entering the blue ocean markets such as Southeast Asia is an option to grab a larger local market share - but it still needs long-term layout and field investigation, which is challenging. With the intensification of internal competition in online marketing channels, the price of services is likely to increase. Due to a large amount of investment in marketing, but little investment in R & D, the company's operating strength and flexibility are not enough to stand out from its peers. According to the 2019 consumer survey, the perfect diary ranked sixth among the most famous cosmetics brands in China, but its reputation did not make it into the top 20.
In addition, l'or é al also acquired modiface, a technology company, which aims to provide a simple skin diagnosis and skin care planning application using artificial intelligence. It allows l'or é al to integrate technology and green, renewable elements in its services and products. In this regard, there is still a big gap between PD and l'or é al.
In addition to actively expanding and trying to catch up with l'or é Al, paying attention to product quality, improving user reputation and improving user loyalty seem to be more critical. It should be careful not to repeat the mistakes of unifon, which will lead to the increase of inventory turnover days to more than twice that of international brands. Instead of just increasing production, it is better to use funds strategically to invest in beauty technology and other top points, or make effective acquisitions like l'or é Al, which may be more sustainable and prevent potential capital waste.