Domestic brands rapidly raising their game

Life experiences

To cash in on the guochao trend, numerous Chinese brands are entering the market to meet the increased demand.

The number of Chinese brands on Douyin, the popular streaming platform, rose by 508 percent in the 11 months from April last year to March, with domestic brands comprising 92 percent of the top-sellers.

On the Xiaohongshu lifestyle platform, where users also share life experiences, as of the end of last year, the number of domestic brands exceeded 78,000. Users have searched for such brands more than 1.2 billion times.

Wang Yajuan, chief marketing officer at Xiaohongshu, said, "Newly emerging domestic brands on our platform have produced a variety of high-quality goods, customized and experiential consumption services to meet increased demand from young people with strong personalities and distinct aesthetic tastes."

It is important for new brands to launch products that are readily accepted and welcomed by consumers, Wang added.

In 2019, Alibaba launched the New Chinese Products Program, helping the annual sales of each of 134 domestic brands exceeded 1 billion yuan on the Tmall e-commerce platform.

In April 2020, Alibaba announced the New Chinese Products Plan 2020 by launching upgraded digital channels for domestic brands in fields such as store livestreaming, cross-border fashion shows, offline exhibitions, and new product research and development. The aim was to add three Chinese brands to each consumer's shopping cart.

As a beneficiary of the guochao trend, Liu Mengzhong, co-founder of the XDG beauty company, believes that its products designed specifically to treat oily skin are a must-buy for the younger generation.

Liu and two other co-founders launched XDG in 2019, introducing its first set of products a year later, when a large number of Chinese beauty brands appeared on the market.

"Although there were competitors in the beauty sector when we started our business, many of them didn't have specific, high-quality and effective products for targeted customers, which became the main focus of our work," Liu said.

XDG, which continues to focus on offering simple, effective and reasonably priced products for young people with oily skin, has set up a laboratory for research and development of products that have a simple formula but a large proportion of scientific ingredients.

It has 17 products on the market, including two patented items to treat oily skin and acne. The company aims to increase its annual revenue from 120 million yuan last year to 360 million yuan next year by providing a better service and upgrading its products.

Liu, who next year plans to sell products in physical stores exclusively to treat oily skin, said, "In addition to our applications to join online platforms such as Xiaohongshu, Douyin and Taobao to attract more consumers, our skin care specialists offer one-on-one services, including advice on how to select and use products to the best effect."