Hua Xizi is on the hot search again. After the public opinion incident involving Li Jiaqi's "beating of workers" occurred, Hua Xizi lost her voice for nine days. Just as the public opinion subsided, Hua Xizi released a letter of apology on the afternoon of September 19. The full text was more than 400 words but the key information was basically zero, which once again aroused the anger of netizens. Public opinion has changed from whether a 79 yuan eyebrow pencil is expensive to whether Hua Xizi is good at public relations.

9 days, a failed apology letter

Some netizens commented on this letter, "It was said but it seems like it was not said."

Some netizens commented sharply, "90% of the apology is advertising, and 10% of the apology is still nonsense."

Why is this letter an extremely failed PR case?


(Source: Hua Xizi’s official Weibo)

Judging from the content of the letter, the first four paragraphs can be roughly translated as "Sorry, we are occupying public resources. We will listen to everyone's suggestions and continue to work hard." The last four paragraphs are roughly translated as "We are a domestic brand, please continue to support us."

The full text does not give consumers an explanation for the problems with the product and price, nor does it take any practical actions to make up for it. However, the most controversial thing is that Huaxizi advertised itself under the banner of apology. From the public opinion incident of Li Jiaqi's "beating of workers" to the present, Huaxizi has not responded positively to consumers from beginning to end. It is no wonder that netizens did not pay for this apology.

Bohu Finance will sort out the timeline for you:

On the evening of September 10, Li Jiaqi brought Hua Xizi eyebrow pencil and angrily criticized netizens, "Why is 79 yuan expensive? Sometimes I look for my own reasons, whether my salary has increased in so many years, and whether I have worked hard."

In the early morning of September 11, Li Jiaqi apologized for his live broadcast remarks. Huaxizi’s official customer service responded, “The store’s products are relatively cost-effective.”

On September 11, Huaxizi responded to online rumors that the factory was in Japan, stating that the products were all domestically produced and had records for inspection.

On September 12, Huaxizi was rumored to be a Japanese brand, saying that these were all rumors and reported the case to the police.

Since the public opinion fermented, Huaxizi has not made any official response to the "expensive price" mentioned by consumers. During this period, Huaxizi also released a promotional Weibo content as the official supplier of the Hangzhou Asian Games.

During this period, Hua Xizi had many ways to ease public sentiment, such as "roughly giving gifts", "reducing marketing costs and thus lowering prices", "improving cost performance" mentioned by netizens, or one netizen shared: "Reply to 'I forgive you' in the comment area, and ten lucky family members will be selected and each family member will be awarded a thousand yuan." However, Hua Xizi chose to publish a painless apology letter.

In the words of a netizen, "The apology letters written by AI are better than it."

Data shows that after the Li Jiaqi incident, the transaction volume of Huaxizi’s Douyin live broadcast room plummeted by 90%.

According to the transaction amount of Hua Xizi’s Douyin live broadcast room, it dropped from 1 million to 2.5 million yuan on September 10 to less than 100,000 yuan on the 11th, and was rarely suspended thereafter.

The ridicule about Hua Xizi has also changed from complaining about the expensive products to a currency unit exclusively for migrant workers, with 1 Huaxi dollar = 79 yuan. For example, the price of a single piece of wine-filled chocolate launched by Moutai a few days ago may exceed 20 yuan, that is, one Moutai chocolate = 0.25 Huaxi yuan.

Huaxizi is changing from an image of a domestic brand that is easy to use and reliable to a high-priced mid-to-low-end brand that even working people cannot afford.

The PR department is at a standoff with the founder.

Even AI can write a good open letter, so why did Hua Xizi shoot herself in the foot?

Someone is popularizing science online. Generally, this kind of statement is drafted by the public relations department, passed up to the top, and finally signed by the boss and finalized. "The final word-of-mouth article with zero information shows that the entire company is numb." Some people also boldly speculated that Hua Xizi’s “nonsense response” did not look like a public relations department.

However, there was a new explanation of the matter on September 20. According to "Acorn Business Review", it was learned that Huaxizi's public relations team has more than ten people and is a systematic public relations department, not a "grass team" as rumored by the outside world. Among them, a "VP of public relations" at the decision-making level is the highest-ranking person who has resigned. The specific number of resignations cannot be disclosed.

"A Letter" was not written by the company's public relations department, but entirely by the personal will of boss Wu Chenglong.

An insider revealed: "Huaxizi met with many public relations companies in the past week, and all the plans that Huaxizi Public Relations + Marketing could propose were proposed, but the decision-makers did not adopt them."

Immediately, "Hua Xizi Public Relations Department may resign collectively" instantly rushed to the top of the hot search list.

It is understood that Huaxizi’s public relations department had already submitted their resignation application before the “Letter” was issued. Now only some young public relations professionals who have just joined the industry are left in Huaxizi. "Due to professional ethics and integrity, we had no choice but to resign. The boss's decision-making was too different from the advice provided by the public relations department. We tried to persuade the boss before the "Letter" was issued, but the boss could not go against his will and ultimately did not stop him. After all, the brand and the company belong to him."

Even Hua Xizi's public relations officer couldn't help but complain, ""A Letter" is like a 'primary school student's composition.'"

When it comes to Wu Chenglong, the founder of Huaxizi, people usually use two words to describe him, that is, mysterious. Even though the Huaxizi brand is selling well on all major platforms, Wu Chenglong rarely appears in front of the public. Even for company insiders, there are very few opportunities to see him.

Wu Chenglong has rich experience in e-commerce marketing. According to public reports, before founding Huaxizi, he was the operations director of Pechoin’s Tmall flagship store. During his tenure, Pechoin entered the e-commerce field and sales increased significantly.

In 2014, Wu Chenglong founded a marketing planning company to focus on the e-commerce industry. During the same period, he operated the Tmall Water Code flagship store with good results.

But do those who understand marketing really understand users?

People's News published an article in March 2021. This was also the first time Wu Chenglong was interviewed by the media. He said that he usually attaches great importance to user feedback. He will spend at least half an hour every day checking user reviews and feedback users' opinions and suggestions to the corresponding person in charge as soon as possible.

At the beginning of its establishment, Huaxizi elevated "user co-creation" to the level of brand strategy, and also established an "Experience Officer Operations Department" to implement all aspects of user co-creation. For example, they will develop a small program "Huaxizi Experience Officer" on WeChat. Users who have purchased Huaxizi products will receive a letter and be invited to participate in the experience of makeup products.

When developing a product, Huaxizi will first achieve 60%-70%, then screen multiple experience officers through a mini program, send free samples, follow up on usage feedback, and then complete the development of subsequent products.

Starting from 2021, the frequency of "co-creation" between Huaxizi and users will become higher and higher. According to official reports, from 2016 to 2021, the number of Huaxizi experience officers increased from the initial 30 to more than 200,000. Later, professional anchors, professional makeup artists, beauty bloggers and other professionals were also added.

It can be seen that Huaxizi attaches great importance to user feedback. For example, a Huaxizi eyebrow pencil has gone through 8 iterative upgrades, nearly 200 proofing experiments, and 1,000+ user reviews and screenings.

Of course, Bohu Finance has no intention of clearing Hua Xizi's name. If he makes a mistake, he will be beaten. It is undeniable that Huaxizi strives to listen to user opinions in product research and development. As a national brand, it is not easy to step out of China and gain a foothold in the world.

However, brand positioning needs to be determined accurately. As one netizen commented sincerely, domestic brands can usually only earn lower profits in the smile curve theory. They need to earn higher profits by improving product quality and consumer recognition, rather than relying on short-term hot spots to achieve success.

The label “domestic brand” cannot be abused

In Hua Xizi's apology letter, "domestic products" and "Chinese brands" were repeatedly mentioned, but it is clear that netizens do not want to pay the bill.

“I feel that buying domestic products now is considered a kind of moral kidnapping.”, “Just because we are patriotic does not mean that we are willing to be taken advantage of.”, “I hope that companies like this will not consume the patriotic sentiments of ordinary people.”

At present, domestic brands are divided into two categories. One category is national brands represented by Fenghua, Huiyuan, and Hongxing Erke, which rely on scale for profits. They occupy an irreplaceable position in the industry with their strong offline channel network.

These brands follow a steady and steady factory production route. For example, Fenghua relies on reasonable production planning, raw material procurement and inventory management from the beginning to control the production rhythm and reduce costs. Once upon a time, its Bee Flower Conditioner, which cost two or three yuan a bottle, became a well-deserved top brand in China.

However, as international brands such as Unilever, Procter & Gamble, and L'Oreal have entered the Chinese market, brands such as Bee Flower have moved towards the lower market. When it comes to the selection of product ingredients, they only choose the right ones, not the expensive ones. They use the most common raw materials on the market, and even cancel the advertising department. Gu Jinwen, the founder of Fenghua, once said, "Instead of spending a lot of money on advertising, it is better to rely on product quality to win and pass on profits to consumers."

According to reports, the average gross profit margin of Bee Flower products was 15% in 2004, while the gross profit margin of foreign brands at that time was more than 40%. With low gross profit margin, Bee Flower’s market share reached about 35%, becoming the number one in the industry at that time.

For a long time, high cost performance has made the old domestic brands represented by Bee Flower and become synonymous with them.

After Li Jiaqi's live broadcast crashed, domestic brands such as Fenghua, Yumeijing, Vitality 28, Lotus, and Jingxin have received unprecedented attention. After September 11, Fenghua broadcast nearly 95 hours of ultra-long live broadcast, adding 2.76 million new fans, more than 30.95 million viewers, and sales exceeding 25 million yuan. However, in the previous month, the best sales of Fenghua’s live broadcast room were on Chinese Valentine’s Day, with cumulative sales exceeding 5 million yuan, and the highest number of viewers for the live broadcast was less than 1,000 people.


(Screenshots of Bee Flower, Vitality 28, and Lotus MSG Douyin)

Another type of domestic brands, mainly Huawei, Li Ning, and Anta, rely on their investment in technology research and development and the layout of high-end businesses to earn high added value.

For example, Huawei's 10-year research and development expenses exceeded 977.3 billion. Among them, Huawei Mate60 equipped with Kirin 9000s chip not only broke Western technical barriers and returned to the 5G track, but also achieved autonomy in the entire industry chain. It has also opened a deep hole in the high-end smartphone market.

For another example, Anta achieved the success of FILA's operation through the "buy, buy, buy" approach and reaped the benefits of high-end products. Li Ning rose to prominence in 2018 when the “national trend” was at its peak, and also took advantage of the situation to incubate a number of high-end brands.

To sum up, domestic brands must either achieve the ultimate cost-effectiveness or have competitiveness that others cannot copy. Otherwise, you will fall into an embarrassing situation like Hua Xizi.

Last time Bohu Finance analyzed in "Li Jiaqi, Destroying "Li Jiaqi"" that from the current domestic beauty brands, there is a common problem of focusing on marketing and neglecting R&D. Brands are busy developing concepts, packaging, co-branding, and celebrity endorsements, while neglecting continuous product innovation and quality control, making it impossible for product capabilities to continue to support consumer demand and to form core competitiveness.

In the end, marketing expenses are so squeezed out that brands and OEMs are working for anchors. Compared with international cosmetics giants, Hua Xizi can be said to have no technical competitiveness.

One fact is that Huaxizi cannot escape its foundry roots, and with its huge marketing investment in live streaming and social traffic, in the early days Huaxizi’s monthly marketing investment alone on live streaming platforms such as Li Jiaqi was as high as 20 million yuan, accounting for more than 20% of total marketing expenditures.

After spending money, the brand power has not improved, which gives consumers a feeling that it is "neither high-end nor affordable."

In the process of developing a brand, it is inevitable that it will encounter various problems and challenges. However, the label "domestic brand" cannot be abused. Although many "domestic products" have been gradually replaced by foreign brands in recent years, for example, "Lotus MSG", which once ranked first in the world in terms of monosodium glutamate output by a single factory, has also ceased production this year, which is sad.

While supporting domestic brands, we also hope that domestic brands will be self-reliant and self-reliant, rather than blindly relying on emotional cards to overdraw consumers' trust. Perhaps Hua Xizi should think carefully about "who am I" now.

Reference sources:

1. Acorn Business Review: Dialogue with Hua Xizi’s resignation PR: The statement is like a primary school student’s composition, unable to resist the will of the boss

2. City boundary: Hua Xizi might as well not apologize

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