Feixi confirms it will streamline department store counters, but it faces more than just "where to sell" so simple

In response to a recent media report that high-end beauty brand Yuxi will withdraw from China's offline market starting in 2021, L'Oreal China's public relations staff told Interface Fashion that Yuxi's brand will indeed streamline its department store distribution channel next year, but it will not cut out the channel completely, "according to the location of the store, the counter's output, and the characteristics of the customer population to evaluate and optimize. "

L'Oreal China said in a brief response to Interface Fashion, "In order to respond to market changes and more effectively meet the needs of high-end consumers, the brand decided to strategically optimize its retail channels, and in the depth of the integration of different advantages of online and offline at the same time, to strengthen the image of the core department store channels to upgrade the image and experience of service to better highlight the status of its high-end skincare and beauty brand. The brand has decided to strategically optimize its retail channels, y integrating the different advantages of online and offline while strengthening the image upgrade and service experience of core department store channels to better highlight its position as a high-end skin care and beauty brand."

"Cosmetics Finance Online" recently reported that Feixi's contract with distributors across the country will not be renewed after the December 31, 2020 expiration. According to some of the distributors, the brand verbally informed some of the distributors over the phone that morning that it would be officially withdrawing from the offline market in China next year.

According to the report, Feixi is boldly cutting down the offline channel, including the brand beauty adviser (BA) has held a meeting online, officially announced the withdrawal of the hundreds of BA official news, and promised that the earliest will be in late December to the direct and third-party employees to the transfer of the job, the opportunity to interviews, and within the scope of the law and the corresponding subsidies. At the same time, Feixi aftermath of the dealer partners are also rapidly advancing, and strive to properly deal with the rights and interests of both sides.

But L'Oreal China did not endorse the rumor. L'Oreal China emphasized the stability of Feixi's performance in recent years, stating that it has "achieved positive growth despite the challenging market environment in 2020." According to the official response, Feixi will concentrate its offline focus on core department store channels. However, L'Oreal China did not explain exactly how it will strategically optimize the retail channel by the time Interface Fashion went to press.

Feixi is currently the only local Chinese beauty and skincare brand under the L'Oréal Group's high-end cosmetics division. It was founded in 1992 by Jin Yuxi, a well-known Chinese-American TV host. According to public information, Yuxi was acquired by COTY in 1996, and the fast-growing Yuxi's annual domestic sales in 1998 reached RMB 300 million. In 1992, China's per capita expenditure on cosmetics is only 5 yuan, to 1996 only reached 10 yuan.

But after 2002, the sales of Feixi began to go downhill. 2004, L'Oréal Group acquired Feixi from Coty, and two years later, Feixi was reorganized from L'Oréal's mass cosmetics department to L'Oréal's high-end cosmetics department.

After joining L'Oreal, Feixi began the road of high-end transformation. As its early clientele was centered on women born in the 60s and 70s, the first step in its transformation was to change its face and use younger spokespersons such as Shu Qi and Du Juan to attract women in the 18 to 40 age group.

However, the transformation of Feixi during the decade of its acquisition by L'Oréal did not have obvious results, and after the initial use of two young image spokespersons, Feixi did not stir up more waterworks. Until 2018, after the development of China's local market in China was elevated by L'Oreal to the group's strategic level, Feixi re-reading has a new action.

First, Feixi launched a new Ganoderma lucidum newborn water that year, wanting to promote brand transformation through high-end products. Secondly, Feixi official announcement of Xu Qing and Zhang Ruoyun two stars as the new spokesman, obviously want to maintain the elegant route at the same time, but also want to attract a more youthful consumer crowd. 2017-2018, Feixi also carried out a retail channel image upgrade, stores and counter image transformation more luxurious, modern and youthful.

In recent years, the reform action frequently and did not bit Feixi reap the expected results. As mentioned in the report, the person in charge of a department store channel in East China believes that the brand is too conservative in marketing, "the money is not spent on the knife edge, and not enough has been done to explore the operation of new social media."

But the problem may not be only here, Feixi product pricing strategy adjustment and new and old product turnover makes the brand in the loss of old customers at the same time, but did not harvest the attention of the new target groups.

As L'Oréal does not publish the performance of a single brand, but I'm afraid that Feixi's radical reorganization of the brand's channel strategy could not be separated from this year's epidemic after the impact on performance. It is important to know that in early 2020, Feixi accepted the new media Morketing interview also said that the brand will focus on cooperation with the second and third tier and other low tier cities retail partners. "Our key markets are not just in Beijing and Shanghai, but the second and third tier cities are more strategic emerging growth markets for Feixi."

But this year's outbreak of the new crown epidemic on the traditional department store channel impact is huge, while promoting the beauty industry to fully accelerate the transformation to online, channel reform for each traditional beauty brands are at this stage have to realize a difficult problem. Before Feixi, another well-known brand under L'Oreal, Maybelline has taken the lead in launching the department store channel retreat.

In October 2020, Interface News reported that Maybelline had withdrawn en masse from the local department store channel in Shanghai in June this year. Department store channel counter losses, is the main reason for Maybelline to give up this channel. In addition, in the past, Maybelline department store counters in Shanghai are operated by dealers, in order to improve the efficiency of the supply company headquarters decided to take direct mode. Today, in addition to Watson's channel, there are only eight directly-managed stores in Shanghai. Earlier in January, Maybelline also withdrew from Beijing, Changchun, Harbin and other places in the department store counter.

L'Oreal China's response at the time was similar to the reform of Feixi, saying that Maybelline "decided to make strategic adjustments to the offline channel, from the previous department store counter channel to the online and offline linkage of experiential stores. Next Maybelline will still have a store plan, the type of store is mainly boutique, that is, opened in the shopping center or fashion business district of the single brand stores."