12,000 words to fully interpret Perfect Diary: from organizational structure to growth strategy

As a growth engineer and a straight man, I focus on studying systematic enterprise growth methodology.

In order to study the best practices in the beauty industry, I spent two months digging through Perfect Diary’s public intelligence and data (open-source intelligence, referred to as OSINT). (BTW, I have not had any contact with anyone from Perfect Diary)

According to our estimates, Perfect Diary's omni-channel sales in 2019 exceeded 3.5 billion yuan (purely estimated, please refer to official data for the real data), and they have only been in business for three years.

Next, I will dismantle Perfect Diary from the following five dimensions:

• Founder's Story
• Boundaryless Team
• Product-side transformation
• Marketing rules
• New retail ambitions

As for whether their products are good? Can marketing be replicated? Can the growth be sustained? Please make your own judgment.

After all, this year's epidemic is a global black swan, and no one knows how long we will have to wear masks, so there is basically no need to sell lipstick. However, the eyes can still be shown, and ladies who love beauty can also put on some eye shadow and apply some eyebrow powder. It is also possible that after the epidemic situation improves but the overall environment deteriorates, a new wave of "lipstick economy" will come.

1. Brand story of new species

I found that the naming of many cosmetics brands and luxury brands follows a pattern - the brands are named after their founders.

For example, Estee Lauder, Louis Vuitton, P&G (jointly named by the two founders), Gucci, Chanel, and Dior. (L'Oreal and Shiseido are exceptions)

We might as well make a bold assumption: the founding talent is the soul of the brand, and the vision and ambition of the founder and founding team are the core driving force for the brand to grow.

It is not difficult to imagine that when these brands first started out a hundred years ago, the entrepreneurial conditions might not have been as good as today's Internet celebrities, and it took them decades to gradually grow stronger.

Back to the research on Perfect Diary, digging into the background and vision of the founding team is naturally the first step.

Through simple equity penetration and searching the official website of Yixuan E-Commerce, we can basically identify the three founders who hold shares: David Huang, Vincent Chen and John Lyu .

(BTW, Christy Sun is David Huang’s wife, Vincent and John should be partners in Eslite’s e-commerce business)

Because the founding team all graduated from Sun Yat-sen University in Guangzhou, and because Sun Yat-sen's nickname was "Yatsen", the company name "Guangzhou Yatsen E-Commerce Co., Ltd." is easy to explain. The official meaning of its brand name "Perfect Diary" is Unlimited Beauty, which means beauty without limits . This reminds me of the naming logic of L'Oreal, the world's number one cosmetics group.

One hundred years ago, Eugene Schueller, who was fascinated by chemistry, created a new type of non-toxic hair dye and named it "L'Oreal". The word "loreal" comes from the Greek word "opea", which means beauty. This is also what I mentioned before. One of the few consumer brands that is not named after its founder is the Japanese Shiseido. The naming logic of Shiseido was extracted from the passage in the Book of Changes: "Great is Kun Yuan, where all things are born."

I can actually understand why David Huang did not use his own name to name the brand. My first impression was that Huang Jinfeng might sound more like a soy sauce brand.

In addition, after studying the background of the founders of Perfect Diary, a passionate story came to my mind:

During the graduation season of a certain year, several classmates from Sun Yat-sen University made a promise: 10 years later, we will work together to create a "new L'Oréal Group" in the place where our dreams started. After that, the three friends went their separate ways, looking for the secret weapon to become a new species. Finally, the three returned to the place where their dreams started with their industry experience and began their endless pursuit of beauty. (The background music played was the soundtrack of the Three Kingdoms animation film, The Dawn of Heroes)

Although the story is made up by my imagination, becoming the "new L'Oréal Group" and the "new Estee Lauder Group" is indeed the vision mentioned in many PR articles of Perfect Diary, and its Baidu Encyclopedia also verifies this statement.

Data source: Baidu Encyclopedia

2. A new species of borderless team

Since we want to become the "new L'Oréal Group" and the "new Estee Lauder Group", we must learn from the strengths of others and initiate fundamental changes in the practices of these international brands in order to adapt to the increasingly complex user needs and business environment.

Most international brands are giants that have gone through long economic cycles. They have found partners with whom they can cooperate well through years of fighting. The specific manifestation is that the professional division of labor is very clear, and we will work together with many agencies to complete the work, for example:

• Advertising placement and content production will be handed over to WPP Group and 4A companies;

• The operation of Tmall Mall is handed over to TEP (Tmall agent operation);

• If you need technical development, find an outsourcing team;

• Strategic research can be conducted by hiring a well-known consulting firm;
• You can find various ISVs by opening the data tags;
• There are also dedicated operating companies for offline channels;
• You can also look for OEM and ODM factories for product development.

The advantage of this is that the leverage of your own brand team is huge. You just need to find the strongest professional team in the market. A small number of people can steadily leverage a large business, and it is not easy to make mistakes. Anyone can make the difference without them. But from another perspective, in the Internet age, the fragmented organizational structure has to some extent affected the integration of omni-channel data. Excessive internal and external consumption is not conducive to rapid iteration and trial and error. It is also difficult for international brands' teams in China to concentrate their efforts on major tasks, and sometimes they even need to persuade foreigners.

A major feature of the New Species team is that they dare to internalize various functions. It seems that except for the supply chain, they have basically handled everything else by themselves. Perfect Diary even has a Xiaohongshu MCN that can serve other brands.

Perfect Diary has posted more than 400 positions on 51jobs alone, and this recruitment logic is almost unimaginable for international brands.

Data source: 51jobs

By combining resumes and recruitment data, I can basically draw a rough outline of Perfect Diary's company structure and job responsibilities. It's just a rough sketch and may not be accurate, so I won't show it in detail.

Data source: GrowthBox

During my exploration, I deeply felt that this borderless team function has very effectively supported Perfect Diary's rich gameplay in product, marketing and new retail . Next, we will continue to interpret the transformation of new species from these three perspectives.

3. Product-side changes of new species

3.1 Use big-brand OEMs to make affordable alternatives

Almost all of the world's strongest cosmetics OEM and ODM factories are rooted in the Yangtze River Delta and the Pearl River Delta. After years of OEM for big-name cosmetics, they have become very systematic. Even rapidly rising domestic brands can easily stand on the shoulders of giants.

After checking the national cosmetics registration data, I found that Perfect Diary had registered nearly a thousand SKUs from 2017 to 2020. I took a quick look and they should all be produced by OEM factories.

Data source: National Cosmetics Registration Network

Perfect Diary has cooperated with dozens of OEM factories in total, and its main OEM factories produce the same products as big brands. It can be said that they do not want to be inferior to others in the birth of their products.

Data source: GrowthBox

At the same time, in order to better cooperate with OEM factories, Perfect Diary has recruited a number of factory representatives. Just like a buyer, they are stationed at various sources of goods, and once there are new products or packaging materials, they will immediately arrange and combine them and quickly iterate them.

You can also search for resume data of OEM factories on recruitment websites. Some employees will mention some project experiences in cooperation with brands in their resumes.

Although there is not much information about the cooperation, just looking at Perfect Diary’s Tmall store, it has put nearly a thousand SKUs on the shelves in a year, which shows how skilled it is in cooperating with the OEM factories, and at the same time it has greatly reduced the R&D cycle.

Data sources: Tmall, Magic Mirror e-commerce data, GrowthBox

Perfect Diary not only efficiently uses the same OEM factories as big brands, but also compresses gross profit margins to the extreme.

With some big discounts in conjunction with marketing festivals, it soon became an affordable alternative in the minds of fairies, or " affordable substitute" for short.

Data source: GrowthBox

I also specifically looked for some strategies on how to make substitutes. The difference between the lips in the picture is indeed not that big, but the price is only a fraction of that!

(Picture from Zero Point Planting Grass)

I even found a substitute for Perfect Diary in another guide by PanLinEnn, a B station up master, and the price was just a fraction of Perfect Diary.

I can't help but sigh: It is really not easy to do business in China, and it will probably take a long time to increase added value.

3.2 Quantitative product selection in the digital age

After solving the problems of supply chain and R&D, the most important thing on the product side is product selection. After all, all brands use similar supply chains, so whether they can create a hit product depends on their own ability.

In my opinion, product selection in the digital age has become very much like a quantitative trading game. You need to conduct in-depth research on the needs of Generation Z in the market, public opinion, data from other competitors, and data from your own consumers in order to win a good battle in the process of purchasing, selling, and inventory management.

According to the information, David Huang used to be a senior executive at Yunifang, so I took a look at Yunifang’s financial report.

Unexpectedly, since its listing in 2018, the profits of Yunifang (the parent company is called Yujiahui) have been declining. The financial report shows that the company's operating income in the first half of 2019 was 973 million yuan, a year-on-year decrease of 0.82%, and the first time that the growth rate has been negative since its listing; the net profit attributable to the parent was 5.96 million yuan, a year-on-year decrease of 90.83%.

As of the end of the third quarter of 2019, Yujiahui's inventory amounted to 741 million yuan , and the inventory turnover days reached 227.84 days. At the same time, marketing expenses amounted to 677 million yuan. The listed companies Marubi Co., Ltd. (603983.SH) and Proya Co., Ltd. (603605.SH), which also focus on the research and development, production and sales of cosmetics, had inventory amounts of only 174 million yuan and 281 million yuan, respectively, during the same period, and inventory turnover days of 105.25 days and 92.21 days, respectively.

From a macro perspective, competition in the skin care products market is still quite fierce, and everyone has inventory backlogs. When Perfect Diary started out, it avoided the skincare market and focused on cosmetics. It was not until 2019 that it launched personal care products.

Facts have proved that they bet on the right track: from January to November 2019, Tmall's cosmetics sales reached 27.676 billion yuan, a year-on-year increase of 79.4% compared with 2018. The development momentum of cosmetics is much more ferocious than that of skin care products.

Judging from Perfect Diary’s current performance and financing valuation (US$1 billion, RMB 7 billion), it has basically surpassed its old owner Yujiahui (market value of RMB 3.1 billion). Perfect Diary has obviously found a good "quantitative product selection strategy."

An excellent product selection strategy is naturally inseparable from the research of public data sources. Here are three commonly used ones:

• Consumers’ public opinion data on social media, such as Weibo, Douyin, Bilibili, and Xiaohongshu
• Public data of competing products in the market, such as Tmall sales, user reviews, etc.
• Mining of own sales data

I have also seen many PR articles mentioning that Perfect Diary is a brand that is immersed in social media.

Since we need to study public opinion data, crawler engineers are naturally indispensable, and the crawler engineers in their team seem to have a high salary. Moreover, Perfect Diary is the company that has the most comprehensive omni-channel digital marketing in the beauty industry that I have seen. They must have done a lot of research on media platforms, which we will interpret here in part 4.2.

Another angle is to monitor sales in the market. The complex color system of beauty products makes monitoring very difficult. There are tens of thousands of SKUs on Tmall that sell well, and each color is similar in the eyes of straight men, which makes it quite difficult. But if we convert the color into RGB or HSV data, we can immediately start interpreting it using a machine.

Here we can show you how to use machine learning and big data to study the correspondence between color numbers and sales.

Thanks to our partner "Magic Mirror E-commerce Data" for providing professional technical support and e-commerce data. These technical experts are awesome!

The first step of the research was to extract product images of 40,000 lip gloss SKUs from Tmall and extract the color based on the position of the lips in the images.

Finally, you can get the RGB data of each lipstick SKU.

Data source: Magic Mirror e-commerce data

Data source: Magic Mirror e-commerce data

Each dot is a SKU, but 40,000 colors are too many. We can use 25 colors for K-means clustering. Finally, the 40,000 colors were simplified into the following 25 colors. Combined with Tmall sales, we can see which colors are selling well.

Data source: Magic Mirror e-commerce data

Among them, color No. 12 was monopolized by Perfect Diary's Little Black Diamond and MAC's Little Chili Pepper, and hundreds of thousands of pieces were sold on Double Eleven. Not only that, Perfect Diary also has many other popular colors.

In time, perhaps beauty color selection and sales forecasts may be as accurate as weather forecasts.

The last part is the study of Perfect Diary’s own sales data, which we will interpret in Section 4.3 of the article. Next, let’s take a look at the marketing strategy of the new species.

4. Marketing rules for new species

The marketing of new species is mainly divided into three parts, which are organically combined to support the marketing funnel from cognition - conversion - repeat purchase.

Data source: GrowthBox

4.1 Eclectic co-branded products and new spokespersons

When I was looking through Perfect Diary’s product registration records, I found that they released a puppy eyeshadow palette a week ago.

I was shocked when I took a look at the packaging. The cover was actually Li Jiaqi’s Bichon Frise Never!

Although Perfect Diary’s previous popular products were all co-branded, such as with Discovery, National Geographic, the Metropolitan Museum of Art, the British Museum, Game of Thrones, etc., I still underestimated their determination to bring goods, and they even did not let go of the traffic of Gouzi.

You may be curious, why the co-branded products are mainly European and American IPs?

Although Perfect Diary is a domestic product, its brand story still emphasizes its encounter with British fashion designers and bringing European and American makeup styles back to Asia. Therefore, this setting is easier to understand.

Judging from the results, China’s post-90s and post-00s consumers are indeed very receptive to this marketing logic. After all, many co-branded products have broken sales records on Tmall.

Generation Z consumers pay attention to the values ​​​​promoted by brands, so humanity, pets, environmental protection and feminism are more likely to stand out among a crowd of brands. It is full of cultural sense and can give consumers enough motivation to share, which is a typical social currency.

By collaborating with these well-known international brands, Perfect Diary has established the gene of "international fashion" from the very beginning. This approach also reminds me of Gucci, which has enjoyed a second spring in recent years.

In recent years, Gucci has been promoting retro style through creative director Alexander Michele's personal love for Florence and Renaissance style, and targeting young people through digital marketing. Not only has it maintained rapid growth for more than a dozen quarters, but the proportion of young users has also increased significantly, which is very rare in the luxury industry. Michele’s Instagram account rarely posts product photos. Instead, he travels around Europe all day, taking photos that “draw inspiration” from ancient castles, churches, and Renaissance buildings.

In addition to global collaborations, Perfect Diary also has one of its strengths: barrier-free communication with fan girls .

Perfect Diary favors the new generation of talented idols who are good at singing, dancing and rapping. It has collaborated deeply with Zhu Zhengting and Lai Guanlin, and even directly named them after the titles of their idols' fans. For example, the 50,000 pieces of Zhu Zhengting's same black diamond 208 "Pearl Sugar Color" were quickly sold out.

(Fan circle girls light up Shanghai Aurora for Zhu Zhengting)

(Perfect Diary and Zhu Zhengting dominated the big screen in New York's Times Square for three consecutive days)

I still remember that I wrote Yi Yang Qianxi's name wrong in an article, and the comment section was instantly flooded with complaints from his fans. But the good thing is that my article became very popular, and Toutiao also gave me a Qingyun Award for that article. From that moment on, I truly understood the tremendous power of the fan circle, which is probably a pleasure that a straight man like me is not worthy of enjoying.

4.2 Public Domain Traffic Distribution and Grass-Seeding Matrix

If we want to summarize the characteristics of the new species in acquiring customers through public domain traffic, it is

• Know how to leverage channels and partners: for example, in-depth cooperation with Xiaohongshu, traffic support from Tmall, and doubling plan with Tencent
• Produce massive amounts of consumer-oriented content (both self-made and third-party produced): 140,000 Xiaohongshu notes, more than 13,000 Taobao live broadcasts, nearly 10,000 information flow advertising materials, and tens of thousands of Douyin videos, Bilibili videos, and Kuaishou videos.
• Good at omni-channel content distribution and social marketing: every social channel can be searched, no blind spots can be found
• ROI-oriented: Still mainly based on performance advertising, a lot of splash screen purchases are also made, supplemented by KOL recommendations. The ratio of performance advertising to promotional advertising is estimated to be 64:1, with an annual expenditure of at least 500 million yuan.

Perfect Diary's contact with users in public domain traffic has evolved from a line into a spider web. No matter whether you are on Douyin, WeChat or Bilibili, you can be captured by it. Since there is too much content, we can only briefly show some of it here.

We would like to thank Youmi Technology, Guoji Technology, and Wasu Technology for providing Perfect Diary’s public domain marketing data. The suppliers are ranked in no particular order.

Information flow advertising

First, Perfect Diary launched nearly 10,000 information flow advertising creatives. We collected 7,000 of them for a simple analysis.

Video materials are definitely the bulk of the content, and there are basically two types of content: educational content and promotional content.

Data source: AppGrowing

You can also refer to the following advertising copy

Data source: AppGrowing

We created an advertising word cloud

Data source: AppGrowing

The splash screen ads of Bytedance are also a battleground, and are a relatively integrated brand-effect operation. It seems that Perfect Diary has invested heavily in it to launch new products.

Taobao Live

There were more than 13,000 Taobao live broadcasts selling Perfect Diary products, which was quite popular.

Data source: WaShu Technology, GrowthBox

Since the logic of Taobao Live itself is: hot products + low price discounts + KOL sales ; similarly, Perfect Diary also arranges its own live broadcast under this main strategy.

Taking the black diamond endorsed by Zhu Zhengting as an example, Perfect Diary’s live broadcasting reached its peak in November and December 2019. In November and December, there were 66 anchors with more than 8 million fans who participated in the live broadcasting (there were only 92 anchors with more than 8 million fans who participated in the live broadcasting throughout the year);

Looking at the Explorer's Twelve Color Eye Shadow, thousands of anchors were continuously deployed in November and December, ranking first in the number of live broadcasts among all products. Taobao live streaming can directly sell goods, so there is still a certain positive correlation between it and sales volume.

Data sources: Magic Mirror e-commerce data, Washu Technology, GrowthBox

The gradual penetration of Station B

Perfect Diary has been precisely targeting people born after 1995 and Generation Z since its inception, and naturally will not ignore this traffic depression. Perfect Diary has also invested a lot of effort in guiding the Up masters on Bilibili to recommend Perfect Diary products based on affordable beauty reviews and beauty tutorials. The Up masters of Bilibili have combined their own characteristics and deeply integrated Perfect Diary products into the content, such as ancient style and photography, allowing consumers to experience the characteristics of the products in an immersive way and successfully achieve the effect of planting grass.

Xiaohongshu Channel

I have written about this before, so I won’t comment on it here. It is said that Perfect Diary has a deep relationship with the senior management of Xiaohongshu, so it has privileges in terms of traffic, but we don’t have any clear evidence. Please refer to the previous article:

Through data mining, we studied Perfect Diary’s two major growth strategies

Summary of public domain traffic

Perfect Diary has really achieved the ultimate in controlling content materials. Most of them are produced by the in-house team and connected to KOLs by the business team controlled by itself. We searched the entire Internet and only found a few companies that undertake content production for Perfect Diary, and their business is limited to helping Perfect Diary produce TVC advertisements .

• ZJMX Studio produces single-color and nine-color eyeshadow TVCs: http://www.zjmxdesign.com/
• Discovery Explorer 12 Color Series TVC: https://www.xinpianchang.com/u10000935?from=articleList

There is no doubt that Perfect Diary is the company with the strongest content production capabilities that I have observed so far, and it is also extremely sensitive in controlling content distribution channels.

Although the cost is certainly huge, from another perspective, money is not scarce, but the ability to convert money into results is scarce. This logic of burning money for scale is actually a model that the capital market likes. This is why Perfect Diary was led by Hillhouse Capital and Sequoia Capital. However, the accounts must be carefully calculated. This terrible environment is both a cold winter and the spring of the lipstick economy.

4.3 Private Domain Traffic Data Platform and Marketing System

Chinese companies have been enjoying various dividends for a long time, but they have neglected refined operations, resulting in poor retention and repurchase. At the same time, they do not attach importance to establishing contacts and connections with end users, and prefer to rely on third-party channels to sell. Abroad, based on the customer telephone and email system, it is entirely possible to run a company's own CRM at low cost and conduct one-on-one conversations and marketing activities with users efficiently. However, this system has been almost completely broken down in China by super apps, and the only function left for phones is to order takeout.

The private domain traffic we are talking about now basically refers to the WeChat ecosystem, but if you still equate the sales of the WeChat ecosystem with micro-business, you will probably be at a disadvantage in the future brand DTC (Direct to consumer) competition.

In my opinion, in the future, China's largest acquaintance network - WeChat (including enterprise WeChat) will become the most important means of retention and refined operations for small and medium-sized enterprises, and the cost will be relatively controllable.

The reason is very simple. In theory, you can add all your users within the WeChat ecosystem without spending any money. As long as one of you and your user knows the other's WeChat ID (or some mobile phone number is also fine) and the other party accepts the friend request, the matter is established, and WeChat does not charge you a penny for it. And you don’t get any commission when you sell goods to your friends on WeChat. You can sell whatever you want within the legal scope, anytime and anywhere, as long as your users don’t block you.

After all, such conditions do not exist for companies in the Taobao and Toutiao products. The main revenue of Taobao and Toutiao comes from advertising fees. Their business model means that they only want to earn your marketing fees. If you want to recommend a new product to your old customers, you may have to do it through advertising. Therefore, many companies are using Taobao and Toutiao to advertise and acquire customers, and then trying to retain users in the WeChat ecosystem for repeat purchases.

From the perspective of long-term interests, brands must establish a bridge of direct communication with end users!

The medium through which Perfect Diary directly establishes a trusting relationship with end users is the beauty adviser (BA), who is a role like Li Jiaqi. Their primary goal should be to provide consumers with suggestions on how to become more beautiful, and to promote those beauty products after making new customers. The Perfect Diary version of BAs are called "Xiao Wanzi" and "Xiao Meizi". They are composed of thousands of personal WeChat accounts and are in the WeChat friend list of millions of beauty consumers . They are operated by hundreds of specialists behind the scenes.

How to manage so many personal accounts?

We saw Guangzhou Yidu Network Technology Co., Ltd. as the service account technology supplier of Perfect Diary. Their product is called Aike SCRM, which is a well-known marketing tool in the WeChat ecosystem.

However, during the 618 shopping festival last year, WeChat vigorously banned personal account management tools, and companies like Huzan almost all stopped operations for restructuring. The CEO of Aike also said that since then, they have been fully committed to developing more compliant enterprise WeChat operation and management tools.

So how does Perfect Diary solve this problem now?

I found a "doubling plan" released by Tencent Smart Retail in March 2019. This is WeChat's official brand private domain traffic training plan, and Perfect Diary is included in it. As Perfect Diary is a fast-growing new retail company, Tencent should hope to work with them to create an industry benchmark. Therefore, it is possible that it has been treated like a whitelist to a certain extent, allowing it to operate private domain traffic on a large scale without harassing users.

Even if the problem of operational tools is solved, what magic makes millions of consumers add these beauty consultants?

In fact, there is nothing magical about it. It is mainly profit-driven means such as giving out money and providing welfare.

The main means are:

• Put a red envelope card in the product and add a beauty consultant to receive 1-100 yuan.

• Send beauty eggs to offline retail stores and collect them with a beauty consultant.

• With a beauty consultant, you can also participate in limited-time flash sales, buy everything at a discount, and receive a bunch of free gifts.

In addition to WeChat personal accounts, there is also a huge matrix of WeChat public accounts and mini-programs

• Official Accounts: PerfectDiary, Perfect Diary Beauty Research Institute, Perfect Diary Beauty TV, Perfect Diary Beauty Girl, Perfect Diary Laboratory, Perfect Diary Experience Store, Perfect Diary Campus Alliance

• Mini Programs: Abby's Choice, Perfect Diary Flagship Store & perfectdiary, Perfect Pet Gift, Perfect Gift, Perfect Diary JD Mall, Perfect Diary Offline Experience Store, Perfect Diary Member Mall, Perfect Diary Fan Alliance, perfectdiary flagship store

I currently see three main user paths:

• The password red envelope card attached to the product——Xiao Wanzi personal account——Wanzi Xinxuan applet (beauty guide + mall + live broadcast)——Xiao Wanzi Play Beauty Research Institute WeChat group

• The password red envelope card included with the product——PerfectDiary service account——Perfectdiary flagship store mini program

• Offline new retail store customers——Xiaomizi personal account——Perfect Diary Member Mall (Beauty Guide + Mall + Live Broadcast)——Xiaomizi WeChat Group

Therefore, it can be clearly seen that Perfect Diary’s private domain traffic is only used for repeat purchases, and basically they are users who have bought products or visited offline stores.

Some people may ask, what is the difference between this and WeChat business?

Next, I will take Perfect Diary as an example to explain to you Perfect Diary’s technologically enhanced version of WeChat business.

First of all, Perfect Diary must have a data middle platform within the WeChat ecosystem!

First, let’s take a look at Perfect Diary’s three main mini-programs. They all have the same data interface.

When I first observed it, I thought Perfect Diary’s main sales force was Youzan Mall, but when I looked carefully later, I found that the key shopping malls that Perfect Diary used to divert traffic had already been developed by itself.

According to our observations, the product data of all Perfect Diary mini programs are called from the api.mall interface and come from the same database. However, each mall mini program operates almost independently and has the ability to issue coupons independently. After all, the functions of the three mini programs are different, and the intensity of the marketing activities is naturally different. We can also use API to infer the effectiveness of Perfect Diary’s private domain traffic marketing campaigns and estimate sales.

There is also a third domain name, stat.perfectdiary.com. I guess stat means statistics. It is used to count user behaviors. For a normal shopping mall, this is the minimum. In theory, Perfect Diary can identify which products each user has browsed, what products they may be interested in, and which products they have added to the shopping cart. Ultimately, it can collect the user's intentions and also play a role in developing new products and optimizing purchases, sales and inventory.

Next, let’s interpret Perfect Diary’s marketing platform!

As an engineer, I am very interested in any systematic engineering, so I lurked in a Perfect Diary group for a month and fully recorded some of their operating methods and marketing results. A marketing platform needs to include several parts:

• Digital ready content: Xiao Wanzi posts 3 to 8 content-rich posts on WeChat Moments every day, and there are tons of promotional pictures and texts in the group, and occasional WeChat live broadcasts, etc.

• Automated content distribution: completed by nearly a thousand mobile phones through group control

• Personalized marketing activities: Perfect Diary has adopted a model of guiding users to privately chat with Xiao Wanzi to receive coupons.

We mainly observe the Abby's Choice mini program as an example. From the name, we can see that it does not just exist to sell Perfect Diary. Since Xiao Wanzi is a BA, she takes the selective route. Not only does it sell Perfect Diary products, it also has a personal care product line. It also helps several friendly companies sell products, such as "Soocas" toothbrushes and hair dryers, Little Autine's co-branded cosmetics, Cosbeauty's skin rejuvenating devices, etc.

Xiao Wanzi's marketing activities have obvious characteristics. It gives people the feeling that they are clearing out inventory. It seems that they want to avoid the embarrassing situation of Yu Nifang's 700 million RMB inventory.

• Promotion intensity: Big discounts, bundled sales, such as second item for 1 yuan, buy two get one free, half-off sales, 3 items for 99 yuan
• Marketing rhythm: Announcement a few days in advance, three flash sales at 10 am, 2 pm and 6 pm on the day of the event, several big events every month, and various small events in between.
• Content materials: A lot of copywriting with emojis, evaluation content, Wanzi's test pictures, etc. (I guess emojis may be used to prevent WeChat from banning them. Although they are a bit ugly, for those born in the 1990s who can read Martian language, this should be a piece of cake)

Let’s take a look at the following case study of Perfect Diary’s New Year Goods Festival (January 10-12, 2020):

Warm-up starts on January 9

All promotional items can only be viewed but not purchased. The main preheating information includes: promotional products, discount levels, coupon collection notifications, live broadcast previews, etc., to create a sense of urgency for the event.

January 10th – January 12th Official event

Xiao Wanzi simultaneously posted discount information and live broadcast links in the group, interspersed with evaluation pictures, and supplemented with words such as "low stock", "no need to miss it", and "grab it on time at 12 o'clock", fully mobilizing consumers' shopping impulses and building momentum for the event.

The total transaction volume in 4 days is estimated to be 10 million.

The sales of the hot-selling products at the event are as follows, and this is just a small-scale event among Perfect Diary’s many sales sprees.

Data source: Wanzixinxuan applet, GrowthBox

From the end of December last year to the beginning of January this year, Xiao Wanzi also sold Xiaomi's ecological chain brand Soocas hair dryers (RMB 5 million in seconds), Cosbeauty beauty devices (RMB 3.5 million in seconds) and Xiao Aoting's co-branded cosmetics (RMB 4 million in seconds) in the group.

This proves the powerful cross-sell and up-sell capabilities of social marketing, and is truly worthy of the name unlimited beauty$$.

In general, Perfect Diary has invested a lot of manpower and technical resources in the WeChat ecosystem to retain customers, and the direct repurchase sales are estimated to be around 400-500 million yuan a year. In 2019, Perfect Diary's sales on Taobao and Tmall are estimated to be 2.4 billion.

Although the direct financial returns are not that high, Perfect Diary is still increasing its investment in this area.

Then we can only interpret it as a strategic investment, and its implicit purpose is to supplement the following capabilities:

1. Strong inventory removal capabilities

2. Ability to incubate new products and new brands

3. Ability to collect user terminal data

4. Build multi-touchpoint capabilities

5. New retail ambitions of new species

Perfect Diary’s current product gross profit margin is not high, and the profit margin is too low to enter other channels, so raising funds on its own to develop offline channels may be the best option. Moreover, the cost of acquiring customers online is not low, and it is only likely to get higher and higher, eventually approaching the cost of acquiring customers offline. This also means that any new species that want to grow big must have the ability to acquire customers through omni-channel .

Judging from Perfect Diary's current new retail store opening logic, it is mainly based on Innisfree, which opened 500 stores in China in 8 years.

There are two specific indicators in Perfect Diary’s new retail PR:

1. Open 600 stores in three years (estimated to be from the beginning of 2019 to the end of 2021)

2. Recruit 3,000 BAs for offline stores starting in 2020, including 500 makeup artists

However, this epidemic is truly a black swan on a global scale, which has directly led to the closure of shopping malls, the suspension of all renovation work, a sharp drop in customer flow, and employees being unable to return to work. The YTD (year to date) indicators will definitely not be achieved. However, almost all of Perfect Diary’s offline users have remained in the WeChat ecosystem. Even during the epidemic, at least they can still stay connected.

5.1 Open 600 offline stores in three years

Mr. Huang has the confidence to open 600 stores in 3 years, presumably because he recruited the big shot Mr. Feng to join the team.

We collected data from all of Perfect Diary's offline stores on Dianping.com and found that Perfect Diary is indeed promoting this plan, and it can be clearly observed that it can be divided into: the initial trial and error period + the accelerated promotion period. From January 2019 to the end of January 2020, Perfect Diary opened a total of 54 stores, which were concentrated in first-tier cities in the south and new first-tier fashion cities in the inland.

Data source: Dianping.com, GrowthBox

Perfect Diary store quantity heat map

Data source: Dianping.com, GrowthBox

What demonstrates Perfect Diary's ambition to conquer the offline market is not only its fast store opening speed, but also its "immersive" marketing experience. As far as I can remember, only companies like Apple, which are not short of money, like to open offline experience stores. And basically no store sales are required, only the user's NPS (net promoter score) is required to be high.

Each of Perfect Diary’s stores is built to meet the standards of a “net celebrity check-in store,” and the store’s design team is Betwin from South Korea.

South Korea’s soft power in beauty and interior design is indeed quite strong. Innisfree is also a Korean brand, and the design of its flagship store was also done by a Korean team.

(The interior design of Perfect Diary Chengdu store, the picture comes from the global design trend network http://loftcn.com/archives/139599.html)

Perfect Diary’s Chengdu Chunxi Road Experience Store claims to be the largest single brand store in China, with an area of ​​1,000 square meters and four floors. The location of Chengdu is also very interesting as Perfect Diary’s largest offline store. In addition to being no less than that of first-tier cities in the country in terms of leisure economy, Chengdu is also building China’s “medical beauty capital”. It is expected that medical beauty revenue will reach 100 billion yuan in 2025. It can be seen that Perfect Diary is also very far-sighted in location analysis. I also went online to find some shop guides to learn, and I found the following:

• Perfect Diary Chengdu Chunxi Road Experience Store has product display areas on the 1st, 2nd and 3rd floors, with plenty of open space for product display and display, which is quite design-oriented;
• What is more worth mentioning is that it has a seating area on the 4th floor, providing tea and seating, which increases the duration of entry to the store;
• The 5th floor is Perfect Diary’s member home, providing dressing tables, new product displays, etc. It is a special area for providing value-added services to Perfect Diary members.

Perfect Diary applies the "draining" thinking online and offline. The BA who enters the store on the first floor will use language to guide customers to the second and third floors to experience more. After purchasing and checking out, the BA will give away a 10 yuan voucher for the tea counter on the 4th floor, which will apply the "shop exploration journey" of the young ladies to the extreme.

(Pictures are from Pinguan App http://www.pinguan.com/article/content/17829)

5.2 Recruiting 3,000 beauty consultants

The PR manuscript also often mentions a goal: in 2020, we will recruit 3,000 first-line beauty consultants, including 500 makeup artists.

I guess this Flag should be collapsed, unless the epidemic ends in the first half of the year, the lipstick economy may still break out in the second half of the year.

Do you still remember the beauty advisor BA (Beauty Adviser) I mentioned before? Li Jiaqi was the BA at L'Oreal counter before.

Perfect Diary has a complete beauty consulting system online and offline. At present, BAs have a large investment and small returns, but they are Perfect Diary’s own brand contacts that can be dispatched at any time and are zero-distance to terminal consumers. They are the core resources for collecting first-hand data of users and mastering market trends. They are the new "new contacts" that brands need to grasp closely.

Not only that, we can see that its experience design is almost in line with the experience of the Apple Store.

Everyone knows that there is no cash register in Apple's official store. Users pay directly through the clerk's work machine on the spot, and wait on the clerk to deliver the product from the back warehouse to themselves. In terms of collection, Perfect Diary is the same as Apple. After the user selects the product, he directly scans the QR code on his BA's work phone in place to pay (it is just that the user needs to pick up the goods at the cash register), and minimizes waiting as much as possible.

In addition, the advantage of this is that, like Xiaowanzi online, consumers directly settle with the BA, which is conducive to tracking the performance of individual BAs and evaluating ROI.

Mutual diversion and multiple powder washing have become the standard operation of Perfect Diary. It is said that Perfect Diary’s repurchase rate can reach 70%.

We found an extremely unusual high-frequency word "Beauty Egg" among the tens of thousands of comments from Dianping. Recovering the comments found that Perfect Diary has been using "Beauty Egg" to attract traffic from offline to online. Users who come from offline stores scan the code to add the "Xiaomiko" personal account, and then find a BA to get the beauty egg.

After scanning the code, it will be added to Xiaomeizi's WeChat personal account, and customers will be invited to join the group and follow the service account. In other words, only spending the cost of one beauty egg, Perfect Diary returned the offline customer circle to the online store, and equipped the WeChat ecological touchpoints of personal accounts + groups + mini programs, and the subsequent operation logic is the same as that of Xiao Wanzi and Wanzi Xinxuan. Don’t underestimate this small “QR code”. Perfect Diary also specially provides interns with this code, which specializes in doing this work in the ground promotion.

"Offline and offline beauty and makeup team" will not produce returns in the short term. According to Indy Wind's PR manuscript data, it was only after 5-6 years that the offline revenue could reach 4 billion yuan, and a single store could achieve sales of 500,000 to 1 million yuan per month.

We have counted the total opening time of Perfect Diary’s new retail store. According to the monthly sales of 750,000 yuan per store, the revenue of offline stores in 2019 was about 100 million yuan.

It can be seen that new retail stores are actually strategically invested in the same private domain traffic as WeChat ecosystem.

Assuming they can understand your skin, hair, and face shape through face-to-face contact, and these data correspond one by one with the online BA data, the collection of consumer portraits will be quite complete.

On the other hand, online and offline BA recommends appropriate products because of their understanding of consumers, and builds trust over time. Then Perfect Diary’s BA becomes the exclusive beauty consultant for consumers, and the products that can be sold are gradually not limited to the brand itself. At that time, cross-sell’s product categories will be more extensive than the current Wanzixin Selection, and I’m not surprised that it will be made into Sephora.

6. Summary of new species

Perfect Diary has shown a "lab-level" scientific entrepreneurial strategy from the fields of team, supply chain model, digital marketing, new retail layout, etc.:

• Core team: Leaving from traditional industries and creating a boundless team
• Product side: Really achieve digital product selection and forced production and supply chain business model
• Marketing side: To acquire customers through all channels, and to do repurchase on WeChat
• New retail: Small steps to trial and error to rapid iteration of offline new retail determination

We won’t draw too many conclusions here. There are a thousand Hamlets in the eyes of a thousand people. Whether an enterprise can succeed depends on the ability of the team, and on the other hand, it depends on the general trend of the world. I couldn't help but think of the "Book of Changes" that Shiseido referred to: "The most profound Kun Yuan, all things are born."

Author: Growth Black Box

Source: Growthbox (ID:growthbox2)