Analysis of Brand Strategy: How Han Shu Surpassed L'Oreal to Dominate the Beauty Industry
Introduction: The Evolution of Brands in an Era of Change
Lü Yixiong, founder of Shangmei Group, once proposed a profound business insight: the essence of business has never changed, and the laws of communication remain constant; only the physical scenarios for information delivery have evolved. This concept is perfectly exemplified by Han Shu's explosive growth in 2023. According to official operational data disclosed by the brand, Han Shu achieved an astonishing GMV (Gross Merchandise Volume) of 3.34 billion yuan on Douyin e-commerce platform throughout the year, with a year-on-year increase rate as high as 374.38%. Not only did it secure its position at the top of beauty products on this platform but also left international giant L'Oreal trailing behind by nearly 1 billion yuan. This phenomenal performance not only rewrote its own best record in its 21-year development history but also reshaped the competitive landscape in China's skincare market for 2023.
By deeply analyzing Han Shu's rise trajectory, we can clearly outline five interconnected strategic pillars: precisely capturing traffic dividend windows, focusing product strategies on lower-tier markets, innovating content revolutions through short drama marketing, concentrating on core products' logic for blockbuster items, and continuously strengthening research-driven product capabilities. These elements together form a complete path for Han Shu’s leap from a traditional domestic brand to an industry leader—its successful experience is worth learning from all domestic brands seeking breakthroughs.
Chapter One: The Art of Strategic Positioning Amid Traffic Changes
Han Shu's development journey serves as a textbook example of China's traffic evolution. As early as during television shopping's golden period in 2008, the brand proactively signed contracts with over thirty mainstream TV shopping channels nationwide and quickly became sales champion across these channels. When cosmetics specialty stores (CS channel) emerged around 2010, Han Shu adopted a 'rural encircling cities' channel strategy that built up an extensive distribution network covering tens of thousands outlets nationwide. Just before social e-commerce exploded in 2019, it keenly captured potential within Xiaohongshu and live-streaming commerce which laid groundwork for subsequent growth.
The breakthrough short drama marketing campaign launched in 2023 represents peak artistry in traffic operation for Han Shu. The brand profoundly understands that user attention has become one scarce resource amid information overload today; traditional hard advertising continues to decline while short dramas featuring complete narrative structures maintain users’ focus for extended periods ranging from three to five minutes while creating natural scenes for product placement opportunities. Unique advantages inherent within this content format include first matching fragmented characteristics perfectly aligning with mobile internet users’ consumption habits; second significantly enhancing acceptance rates due to story-driven viewing experiences; lastly allowing flexible adjustments based upon marketing rhythms thanks modular production modes.
Chapter Two: Precision Product Strategies Targeting Lower-Tier Markets
In light China’s dualistic structure within beauty markets ,HanShu made astute strategic choices . While most brands pursued high-end demands among middle-class consumers residing primarily urban areas ,the team discovered via consumer data analysis : majority population inhabiting lower-tier markets prioritized cost-effective basic skincare sets priced between RMB300-400 .This demographic showcases distinct profiles : limited knowledge about skincare yet strong willingness learn ; decision-making processes emphasize practical value rather than premium branding alongside heightened demand comprehensive solutions instead individual item stacking . The launch Red Waist series aligns seamlessly with these market needs . Priced at RMB399 after meticulous calculations ensures price advantage against international giants like Loreal whose similar set retails at RMB419 whilst guaranteeing sufficient profit margins support channel promotions.Product efficacy design employs “anti-wrinkle + diminish fine lines + brighten skin tone + hydration” four-dimensional matrix addressing urgent concerns faced women aged between24-40 years old.Additionally commendable was how they successfully expanded gifting scenarios targeting “children buying gifts mothers” through sophisticated packaging designs holiday gift box concepts enabling intergenerational penetration into their user base.