Under the background of slower growth of Double 11 and increasingly fierce competition in the beauty market, “she economy” is still nurturing new opportunities. Sandalwood e-commerce data shows that contact lens outperformed in this Double 11 promotion, with growth rate further accelerating entering 4Q; major companies and brands also seized the opportunity to achieve strong growth.
The rise of live streaming e-commerce is a major boost. In recent years, live streaming has gradually become a core scenario for e-commerce promotions. Undoubtedly, contact lens is perfect for live streaming e-commerce: live streamers can directly show what the wearing looks like, and at the same time introduce key information (e.g. product features, promotional packages, etc) to the audience. Also, as a key consumer group, young women have always been important during Double 11, as well as key audiences to live streaming. This time, they became the main targets of contact lens brands.
Sandalwood e-commerce data shows that the sector is growing at a triple-digit y/y on Bytedance and Pinduoduo. On the other hand, Tmall still accounts for more than half of online sales. With the help of live streaming, it achieved a strong growth during this Double 11, hitting the highest level in past two years, becoming the main driver to the industry's acceleration.
In terms of ASP, Tmall and JD are still significantly higher than Bytedance and Pinduoduo, as they have higher branded product mix. Specifically, Tmall ‘s ASP has increased significantly in 4Q23 QTD. As a frequently used consumable product, consumers tend to stock contact lens during promotion season; and this time merchants also took the chance and launched set products with attractive discounts. This move successfully lifted ASP.
By sub-category, compared with traditional contact lens, colored contact lens has become sector’s main focus in recent years; especially after China reopening, this category has recovered to rapid growth.
Unlike traditional contact lens, colored contact lens mainly plays a beautifying and decorative role. However, as a Class III medical equipment in China, only companies with qualifications can sell it. At present, two main groups of companies sell contact lenses: 1) traditional contact lens companies (e.g., Johnson & Johnson, Ginko International (Horien and Hydron), Bausch), which continue to play an important role in the industry; and 2) domestic brands that have caught up from behind (e.g., Moody and Kilala).
Sandalwood e-commerce data shows that in the past three years, international players like Bausch and Ginko International lost online market share, while domestic brands Moody and Kilala gained from them.
The rise of domestic brands mainly relies on product differentiation and a smart online marketing strategy. Take Moody as an example, it cooperates with celebrities and KOLs, let them publish photos and videos of wearing its contact lenses on popular social platforms (e.g., Xiaohongshu, Weibo), achieving the effect of widely promoting its product, while at the same time does not violate the advertisement law's prohibition on spokesperson for medical equipment.
In contrast, traditional brands are not so fashionable with slow product upgrades; Japanese and Korean brands have few domestic distribution channels and consumers pay more attention to their safety issues. Domestic brands therefore are able to attract a large number of consumers through effective product positioning (enhancing fashion and ensuring safety) in past few years. Supported by colored contact lens, domestic brands continuously increased their market share and rise as new leaders in the market.
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