Chicmax`s KANS Brand: A `Made in China` Brand All Set to Reach New Heights?
| Case Code: MKTG477 Case Length: 19 Pages Period: 2003-2024 Pub Date: 2025 Teaching Note: Available |
Price: Rs.400 Organization : Shanghai Chicmax Cosmetic Co., Ltd. Industry : Cosmetics & Toiletries Countries : China Themes: Business Level Strategies, Innovation, Strategic Planning,Market Segmentation |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Chicmax’s Heavy Scientific Research And Innovation Focus
From the mid-2010s, in a quest to gain a competitive advantage, Chicmax began increasingly relying on scientific innovation in its products. As per the demands of the Chinese cosmetics industry, Chicmax undertook a “three-fold leap” in scientific research...
Kans’s Repositioning Triumph
In 2021, Chicmax decided to revamp the KANS brand after studying certain trends sweeping through the Chinese cosmetics industry. In 2021, Chicmax came across a survey conducted by Chinese business network media ‘China Business Network’, which found that nearly 60% of Chinese individuals aged between 20 and 30 felt the pressure of aging, while almost 20% of those aged 20 to 25 were ‘very anxious’ about it. It learned that 28% of young people born after 2000 were already using anti-aging products. All these factors made the anti-aging skincare segment one of the most lucrative categories in the Chinese skincare market...
Capitalizing on The Guochao Trend
International brands like The Estée Lauder Companies Inc. and SK-II had traditionally dominated the high-end anti-aging skincare market in China. Hence, to effectively differentiate itself in the anti-aging skincare market, Chicmax decided to tap into the ‘Guochao Trend’, which had gradually been gaining popularity, especially among young Chinese consumers. Guochao, which translated to ‘national trend’, marked the rise in the reputation of domestic brands and products that incorporated traditional Chinese culture and style among Chinese youngsters. Analysts believed that the Guochao Trend had led to a shift in consumer preferences that challenged the dominance of Western luxury brands in China..
Kans’s Focus on Social Media Videos Through Douyin
Till the 2020s Chicmax had focused on offline channels, but from then on, it made a conscious effort to reach out to prospective customers through e-commerce channels and social media platforms. That way it expected to appeal to the technologically savvy younger Chinese generation. In particular, Chicmax began focusing on Douyin – a social media video-only platform with a strong e-commerce presence – to increase sales. In fact, Chicmax through the KANS brand was one of the first beauty companies to enter the Douyin channel..
Success of Kans’s Anti-Aging Product Line
KANS’s anti-aging products quickly became popular with customers, with Double-A Essence, the Small Blue Bottle series, and the Slim Waist series becoming bestsellers. After the repositioning, KANS achieved notable domestic success, contributing to 43.8% of Chicmax’s RMB 2.6 billion gross profit in 2021, up from 32% in 2019..
Kans’s Rising Eminence in China
In 2023, Chicmax emerged as the only Chinese cosmetics company to win ingredient and formulation awards at the InnoCosme Awards 2023. Among the honors, its independently developed product, Tiracle Pro Kans, received the ‘InnoCosme Ingredient Award,’ while the ‘One Leaf Repairing Moisturizing Face Mask’ earned the ‘InnoCosme Formulation Award.’ Analysts opined that Chicmax’s wins for its two core brands in the ingredients and formulation categories not only affirmed the success and strong momentum of the company’s multi-brand strategy, but also showcased the dedication and innovation of a domestic cosmetics leader with a 20-year legacy in scientific research and product development..
The Challenges for Kans
Chicmax was burdened with high sales and marketing costs that amounted to nearly half its overall revenue. Though it had diversified into multiple brands over the previous few years, 50% of its revenue was still derived from a single cosmetics brand – KANS. The three brands – KANS, One Leaf, and Baby Elephant accounted for around 92% of the company’s revenue. Analysts observed that Chicmax’s marketing costs were straining its balance sheet, while its overdependence on a single brand was very risky..
The Road Ahead
According to analysts, one of the key factors behind Chicmax’s expansion across various categories was its strong R&D capabilities. Chicmax had consistently invested in R&D. For 2019, 2020, 2021 and the first half of 2022, the company’s R&D expenses totaled RMB 82.9 million, RMB 77.4 million, RMB 100 million, and RMB 51.9 million, respectively, representing 2.9%, 2.3%, 2.9%, and 4.1% of revenue. These figures exceeded the industry average for R&D spending..
Exhibits
Exhibit I: China’s City Tier classification by GDP, Political Administration, and Population
Exhibit II: The Rising Clout of Made-in-China Brands in the Chinese Cosmetics Market
Exhibit III: Chicmax’s Timeline
Exhibit IV: Market Share of Brands in Mass Cosmetics, as of 2019
Exhibit V: Companies Information
Exhibit VI A: Key Financials of Chicmax
Exhibit VI B: Revenue and Profit of Chicmax (2021-2023)
Exhibit VII: Chinese Cosmetic Market Size (Estimate in 2025) (In RMB Billion)
Buy this case study (Please select any one of the payment options)
| Price: Rs.400 |
Price: Rs.400 | PayPal (9 USD) |
