Nowadays, there are dozens of toothpastes, which are almost becoming luxuries.
In Beijing, when you walk into supermarkets, even convenience stores such as 711 and Rosen, the toothpaste with a price of more than 10 yuan on the shelves has become the main force. The price of a single toothpaste of common brands such as black, crest and lengsuanling is more than 15 yuan, and some are more than 20 yuan. The unit price of Italian brands Mars and French brands regenerate, known as "toothpaste Hermes", is almost more than 100 yuan (calculated by 110 grams).
Compared with the "price war" on the shelf, the competition in the domestic toothpaste market is becoming increasingly fierce.
On the one hand, domestic old brands desperately break through, such as LMZ, Shuke, lengsuanling, etc; On the other hand, foreign toothpaste brands are aggressive, with blacks, crest, Colgate, etc. accounting for more than 40% of the domestic market share. In addition, the new online popular brands such as usmile and banbanban have even played tricks with toothpaste. The toothpaste paste is colorful, added with various edible spices, and added cool concepts such as international fragrance masters.
With the help of various concepts of toothpaste composition and efficacy, the price of toothpaste has soared. The toothpaste brands recommended by celebrities such as Jingtian, Zhang Li and Zhao Lusi are "half and half", and the average unit price is 68 yuan.
The players of new and old toothpastes have made a pattern of CO branding, changing packaging, promoting new ingredients and playing with new functions. On June 6, dengkang oral, the parent company of lengsuanling, pointed out in the prospectus: "we should constantly optimize the product structure, improve the sales of medium and high-end products, and drive the price center of products to move up." Simply put, we have to sell products with more expensive unit prices.
Why doesn't the toothpaste that used to cost 5 yuan a stick smell good?
A "profiteering" business
As for Leng Suanling who wants to be in the high-end market, Lai Yang, member of the expert committee of the China Federation of Commerce, said: "they want to jump out of the low-end price war."
Nowadays, the toothpaste market with less than 5 yuan accounts for less than 20%. According to the data of the national development and Reform Commission, the price of toothpaste in China has maintained an upward trend from 2015 to 2021. As of July 2021, the price of toothpaste in China was 10.75 yuan / box (about 120 grams). At present, toothpaste with more than 15 yuan has accounted for 35% of the market share.
Then do you know the real cost of a 20-30 toothpaste?
Although there are many kinds of toothpastes on the market, they contain almost the same basic raw materials, which are mainly composed of friction agents, wetting agents, thickeners, sweeteners, surfactants and spices, of which friction agents account for 40% - 50%. And the toothpaste that costs tens of dollars is expensive in some auxiliary functions such as whitening and preventing gum bleeding.
Zhang Yakun, consumer brand analyst of dolphin club, told the market: "as far as I know, the relatively expensive toothpaste on the market at present is not because of any innovation and breakthrough in ingredients, which leads to the rise in costs and prices. Now most of the ingredients are conceptual, and the core ingredients have not changed."
According to the prospectus released by lengsuanling, from 2019 to 2021, the sales unit price (ex factory price) of its adult toothpaste (100g) was 2.54 yuan, 2.55 yuan and 2.62 yuan respectively, while the unit cost in the same period was 1.53 yuan, 1.47 yuan and 1.50 yuan respectively.
In other words, the cost of producing a toothpaste is only 1.5 yuan, and a dealer of Leng Suanling also revealed to the market: "Leng Suanling has increased the price for several waves, and now the cheapest anti sensitive toothpaste wholesale price has been sold to 5 yuan a piece." According to the industry regulations, the retail price of lengsuanling is set according to the multiple of the wholesale price, such as the wholesale price of 5 yuan, and the retail price starts at least 10 yuan.
Regarding the reasons for the price rise, dengkang oral replied to the market: "in addition to complying with the development direction of diversified toothpaste demand and high-end products, it is also to expand its market share in medium and high-end toothpastes."
According to the quotation given to the market by a toothpaste OEM enterprise, the toothpaste industry is really a "profiteering business". The wholesale price of 20 boxes of single toothpaste is no more than 3 yuan, but the recommended retail price increases by more than 400%, ranging from 15.9 yuan to 29.9 yuan. " The cost of these so-called enzyme and baking soda "net red toothpaste" is about one yuan.
However, Zhang Yakun said, "a lot of toothpastes mainly depend on marketing and packaging design. In addition to the basic element of beauty, they also need to spend money on marketing and grass planting, including finding celebrity endorsements."
For example, Procter & Gamble, the parent company of crest, spent $11.5 billion on global advertising in fiscal 2021. Domestically, the sales cost of Yunnan Baiyao in 2021 was 3.896 billion yuan, and the sales cost of weimeizi (Shuke), which is rushing to the Hong Kong stock exchange, was 508 million yuan in the first three quarters of 2021.
Leng Suanling also made great efforts in sales. After years of holding hands with Wu Xiubo, Leng Suanling signed a new generation of actor Wu Lei as the brand spokesperson in 2021. In addition, Leng Suanling also sponsored the second season of "yearning for life" and "creative camp 2019".
From 2019 to 2021, the sales expenses of dengkang oral cavity were 276 million yuan, 266 million yuan and 279 million yuan respectively, accounting for 29.24%, 25.8% and 24.45% of the operating revenue respectively.
Playing with high-end cosmetics
Efficacy is an important reason for the upgrading and iteration of toothpaste. After all, the original intention of China's first toothpaste 100 years ago was to clean the mouth.
Before the regulations on the administration of cosmetics labeling was issued in 2008, toothpaste, toothbrush, dental floss and other products used for teeth and oral cavity had no clear attribute regulations, but were generally classified as daily chemical products, and this new regulation officially gave toothpaste the status of "cosmetics". From 2008 to 2013, and then to the regulations on the supervision and administration of cosmetics issued in 2021, toothpaste was finally recognized as a cosmetic by laws and regulations, and will be managed with reference to the provisions on general cosmetics.
In addition, according to the regulations, if you want to claim that your toothpaste has the effects of caries prevention, plaque inhibition, dentine hypersensitivity and gum problem reduction, the filer must evaluate the efficacy in accordance with national standards and industry standards.
In other words, toothpaste brands should not advertise that their toothpaste has various "magical" effects at will. In 2015, Crest's double effect white toothpaste was fined 6.03 million yuan for constituting false advertisements, which was also the largest ticket for false and illegal advertisements in China at that time.
In fact, the biggest function of toothpaste is cleaning, but the public's expectation of toothpaste is not limited to the initial cleaning effect. Therefore, various functions frequently appear on the toothpaste stage, from the original Chinese herbal toothpaste of Tianqi and LMZ, to the anti sensitive toothpaste of lengsuanling, to the moth prevention and whitening effects of Colgate and crest, and later the medicinal effect of "preventing gum bleeding" of Yunnan Baiyao.
On the surface, it is an iterative upgrade of efficiency, but in fact, it is a war without smoke of gunpowder between daily chemical enterprises. From 1985, the production and sales of LMZ herbal toothpaste exceeded 100million tubes to the early 1990s, when foreign brands such as Colgate and crest entered China on a large scale. Foreign brands once occupied 80% of China's daily chemical market. Until Yunnan Baiyao launched a high-end toothpaste with a unit price of 22 yuan in 2005, domestic products successfully broke through and grabbed a part of the market share.
Under the effect, several major toothpaste brands, including foreign capital, state-owned enterprises and private enterprises, took turns to "sit on the throne" and repeatedly staged the "Three Kingdoms kill". In 2020, the top ten domestic toothpaste brands in annual sales were Yunnan Baiyao (including jinkoujian), black, crest, lengsuanling, Colgate, etc.
However, this does not mean that the pattern of the domestic toothpaste market has been determined, because in addition to these basic functions of whitening, cavity prevention and allergy resistance, the composition and efficacy of toothpastes are increasingly "subdivided", such as high-efficiency allergy toothpaste, traditional Chinese medicine gingival protection toothpaste, oral mucosa repair toothpaste, baking soda toothpaste, biological enzyme toothpaste, probiotic toothpaste, etc.
According to the 2021 tmall oral care consumption trend insight white paper, ingredient innovation is one of the main trends in the oral care market. More and more mature cosmetics and food ingredients, such as probiotics, baking soda, enzymes, amino acids, etc.
Compared with the basic efficacy, the current efficacy not only brings more stories, but also favors the so-called efficacy skin care of "high-end cosmetics", and "efficacy skin care" also appears in toothpaste
Teeth ". Referring to the cosmetics market, the value of toothpaste will directly double with these so-called special "effects". For example, an ordinary 160g black toothpaste costs 12.9 yuan,
The price of a 110 gram lengsuanling, which focuses on medical research and allergy resistance, is 29.9 yuan.
Lai Yang, a member of the expert committee of the China Federation of Commerce, said: "products are more and more segmented, in fact, in order to reflect more and more differentiation in demand."
According to the great route strategy consulting doctor, "the original ordinary toothpaste has become a toothpaste that can socialize, freshen the breath and whiten the teeth. At this time, the toothpaste has exceeded its original value, and has become a product that can help solve problems in the eyes of consumers, not just a single tooth cleaning tool."
Besides anti allergy, what's the story of lengsuanling?
Leng Suanling, who has been making money in the sinking market for 30 years, simply wants to impact the high-end market and raise his value is not easy.
According to the analysis of past data, for ordinary cleaning toothpaste, 10 yuan is the price watershed accepted by consumers. When a toothpaste is used as a functional product to solve oral problems, the price of more than 20 yuan is easy to accept.
However, Leng Suanling's image of "low price" for many years has long been popular, and the choice of low price strategy is also based on the previous market environment. Dengkang oral cavity, the parent company of lengsuanling, was formerly Chongqing Toothpaste Factory before completing the restructuring in 2001. At that time, the well-known brands in the market included Zhonghua in Shanghai, Lantian liubizhi in Tianjin, LMZ in Liuzhou, Guangxi, Jieyin and Heimei in Guangzhou, kanggeling in Dandong, and three needles in Harbin.
From the perspective of the whole oral care track, China's oral care market grew steadily from 2016 to 2020, with the total retail sales increasing from 49.6 billion yuan to 88.4 billion yuan. According to the 2021 tmall oral care consumption insight trend white paper released by tmall, since 2010, the number of oral patients in China has increased year by year and reached 700million in 2019.
In the big cake of oral care, the toothpaste market ranks first, and the toothpaste market is divided into whitening, gum care (Chinese herbal medicine), anti allergy and other categories according to efficacy. Among them, whitening toothpastes and gum care toothpastes account for more than 53%, and anti sensitive toothpastes account for only 10%.
Not only is the market share of the anti allergy track not high, but the threshold of toothpaste itself is not high, including anti allergy. Therefore, after all kinds of players play the concept of anti allergy, the market share of lengsuanling, the leader in the anti allergy field, has also fallen from more than 90% at the end of the 20th century to 60% today.
While lengsuanling wants to impact the high-end market, the competitor that lengsuanling can't get around is comfort, a high-end anti allergy brand under glansurk. Compared with lengsuanling, comfort is more inclined to layout the market of more than 100 yuan, and the market layout of 0-25 yuan is less.
Interestingly, even without the layout of the high-end market, the current gross profit margin of lengsuanling has far exceeded the level of its peers. Its gross profit margin increased from 39.79% in 2019 to 42.1% in 2021. The gross profit margin of children's toothpaste was nearly 20 percentage points higher than that of adult toothpaste, which was 59.87% in 2021.
Compared with its peers, lengsuanling's gross profit margin is not only half higher than that of LMZ, but also far higher than that of Yunnan Baiyao by 27.15%. This also increased lengsuanling's revenue from 944 million yuan in 2019 to 1.143 billion yuan in 2021, and its net profit from 63.16 million yuan to 119 million yuan.
In addition to the popular product lengsuanling, dengkang oral has a new layout. It has launched electric oral products such as sonic electric toothbrushes and dental flushers of the brands of "dengkang", "lengsuanling" and "beilele", as well as subdivision products such as tooth desensitizer, oral antibacterial paste, oral antibacterial care fluid, dental bar, orthodontic toothbrush and so on.
The Board Secretary of dengkang oral told the city: "the company will focus on the layout and development of a series of electric oral care categories, such as electric toothbrushes and dental flushers, to form the second curve of enterprise development."
Consumers have not been "moved" by it yet. According to the prospectus, the sales of dengkang oral electric toothbrush, oral medicine and beauty care products in 2021 were 6.66 million yuan and 8.91 million yuan respectively, accounting for only 0.58% and 0.78% of the revenue. In contrast, Shuke's electric oral care and mouthwash accounted for 25% of its revenue, with a revenue of nearly 300million yuan.
33 years ago, Chongqing Toothpaste Factory ("the predecessor of dengkang oral cavity") entered the market with lengsuanling, a popular product, but for so many years, the company has no popular products except lengsuanling, and the growth of the enterprise must depend on the continuous introduction of phased popular products, so that the growth of the enterprise can be higher than one wave. If we only rely on price increases to harvest high-end consumers, consumers will turn to the next cold and sour spirit.