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It may seem to many that the worst of the epidemic is over and things are gradually recovering. As the experts say Beauty Sourcing that’s not the case. If you walk around the beauty counters, you’ll probably find some products are out of stock because the supplier is temporarily unable to provide them. And the price is higher than before. These are all signs of a supply chain crisis in the global beauty sector. Supply chain is just like a globally interconnected ecosystem. Smooth and stable supply chain can only be ensured by the consistency and collaboration of partners at all nodes of the system. Once a node has a problem, it will have a significant impact on the upstream and downstream of the entire system. Now, the pandemic, along with the conflict between Russia and Ukraine and other trade frictions, has put the global beauty supply chain under unprecedented pressure.
Challenges Facing Beauty Supply Chain
By communicating with several industry experts, we find that the global beauty supply chain is greatly challenged by the following factors:
Consumers’ changing appetite
At this point, the epidemic has not completely disappeared. And its long-term impact on the economy remains unclear. But one thing is certain: consumers’ tastes are changing. They are looking for beauty products for self-expression and psychological comfort, such as lipsticks. At the same time, they are not only concerned about what is inside but also care about whether the packaging is environmentally friendly. Clean beauty, cruelty-free and natural beauty products as well as green packaging are popular among consumers. When it comes to the means of purchase, a growing number of consumers tends to shop online. Thus, the beauty supply chain needs to constantly adapt to consumers’ changing tastes.
Manufacturing delay
Manufacturing delay is another challenge faced by the beauty supply chain. Manufacturing delay may lead to product shortages and backlog of orders to a large extent. This is particularly evident in China. Not long ago, some big cities in China such as Shanghai and Beijing were hit hard by the mutated virus again. Under the influence of China’s dynamic zero-out policy, Shanghai was completely locked down. Factories shut down and residents had to work from home. As a result, there was a backlog of orders and production was delayed. In the beauty supply chain, supplies from Shanghai, China, had been interrupted. The final consequence may be higher prices.
Freight pressure
As it is mentioned above, a backlog of orders may happen. After resumption of production and work, factories had to ramp up manufacturing. When production is finished, freight transport will be under unprecedented pressure, but the number of cargo ships is very limited. In this case, air freight becomes an alternative, but the cost is much higher. The head of Krave Beauty, a Korean beauty company, says its airfreight prices have risen tenfold since 2019.
What Are Beauty Brands Doing in Responses?
One of the main consequence of the supply chain crisis is: higher prices. From raw materials, ingredients to packaging, price rise happens at each link. Eventually, brands will have to raise prices to offset the increasing costs. Faced with this challenge, many enterprises in the supply chain have to take a series of measures to reduce costs to cope with price changes. To some extent, this may affect the financial health of a company and even the quality of the products.
What Can Beauty Sourcing Do for You in This Tough Time?
Based on its specialized industry knowledge, vast supplier alliances, and professional trade show experience, BeautySourcing can help stabilize and optimize the beauty supply chain.
Avoid the middlemen
In some cases, reaching out directly to consumers and avoiding middlemen in the supply of beauty products and packaging will save a lot of costs for businesses. Here, BeautySourcing can help you. The platform has an alliance where many Chinese beauty providers get together. Global buyers can screen products through the platform and then contact suppliers directly. Beauty Sourcing is like a bridge between buyers and suppliers, without charging any intermediate fees.
High quality & affordable price
In the context of rising costs at all stages of the supply chain, brands need to find suppliers who can provide high-quality goods at relatively low prices in order to effectively reduce costs. Only in this way can profit margins be ensured. All vendors on the platform undergo qualification checks and field visits. The quality of the products from these suppliers is guaranteed to meet international standards. In terms of price, they are the factory and can give the best ex-factory price.
Various supply channels
Beauty Sourcing has built a large supplier network where most suppliers come from Guangdong and the Yangtze River Delta region. Brands and other buyers can choose from different suppliers. This avoids the freight transport stress caused by manufacturing delays at one supplier. In addition, expanding the supplier team will also help with enhancing the bargaining power of the buyers.
Trend-following products
Beauty consumers’ preferences are constantly changing. Those who are the first time to launch products to meet their changing tastes, will be able to get an advantage in the market competition. BeautySourcing is an active participant in world-renown beauty events, such as Cosmoprof, Beauty Dusseldorf-Dusseldorf, In-Cosmetics Global, among others. With this opportunity, BeautySourcing is able to learn about product trends and innovations in different regions and gain new insights from industry experts around the world. In particular, BeautySourcing creates an opportunity for international buyers to get contact with Chinese suppliers and products in a real manner—buyers can get real samples and negotiate at the show; they can also search online, preview the exhibition products in advance, and conduct preliminary negotiations.
In general, at a time when global beauty supply chain is under unprecedented pressure, BeautySourcing can help brands and buyers to mitigate and address the challenges they face in terms of manufacturing delay, price rising, stressful freight transport, and consumers’ changing preferences, so as to stabilize the supply chain and weather tough times.
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