It's another cold winter, and down jackets have become a winter must-have for many consumers.
The Red Star Capital Bureau noticed that this year's down jackets have frequently aroused heated discussions among netizens on the Internet due to the ** problem, and topics such as "domestic down jacket price increase" and "domestic down jacket sold to 7,000 yuan" have rushed to Weibo hot search.
In this heated discussion, the domestic head down jacket brand Bosideng (03998HK), which has naturally become the object of consumer "condemnation".
In recent years, Bosideng has indeed been actively carrying out brand transformation, which has also put Bosideng in the challenge of high-end transformation.
Data map according to ic photo
1) Bosideng seeks transformation and upgrading.
Founded in 1976, Bosideng started out as a contract processing and OEM processing businessIn November 1992, the founder, Gao Dekang, registered his own down jacket brand "Bosideng".
Before 2017, Bosideng was a group company engaged in diversified business, in addition to down jackets, it also operated a number of apparel brands such as OEM, children's clothing, and workwear.
In 2018, Bosideng, which was not operating well at that time, began to seek business transformation, and the company decided to return to the main owner brand, the Bosideng brand, and put forward the strategy of "focusing on the main channel, focusing on the main brand, and shrinking and diversifying".
To this end, Bosideng has made a lot of changes in the design, marketing, channels, and chain of the main brand.
According to Bosideng's latest financial report, the company achieved revenue of 74700 million yuan, a year-on-year increase of 21%;Net profit was 9200 million yuan, a year-on-year increase of 25%.
From the perspective of revenue structure, the branded down jacket business is still the largest revenue of the group**, with a revenue of about 49400 million yuan, accounting for 66% of total revenue1%；The revenue of OEM processing management business is about 20400 million yuan, accounting for 27 percent of total revenue3%；* Business income is about 3900 million yuan, accounting for 53%；The revenue of diversified clothing business was about 96.4 million yuan, accounting for 1% of the total revenue3%。
*: Corporate financial reports, Red Star Capital Bureau.
It seems that Bosideng's performance after the transformation seems to be good, but in fact, there are still hidden worries behind it.
On November 28 this year, when the company's management accepted a group interview and answered questions, Rui Jinsong, executive director, senior vice president and general manager of Bosideng's business unit, admitted that due to the warm winter, because the temperature in October this year was higher than last year, the company's "operating pressure was also greater", but the overall sales situation improved in November, and sales also increased well during the Double 11 period.
In addition, from the perspective of inventory, in the interim results report for the six months ended September 30, 2023, Bosideng's inventory was 387.3 billion yuan, a year-on-year increase of 1278%。
According to the annual report, Bosideng's revenue growth rate has declined since fiscal year 2020, and it will achieve revenue of 167 in fiscal year 20237.4 billion yuan, an increase of 35%；In the same period, the net profit was 213.9 billion yuan, a year-on-year increase of 37%。The year-on-year growth rate of revenue and net profit both hit a new low in the past seven years.
In the secondary market, as of December 21, 2023**, Bosideng's share price was 3HK$48 shares, with a total market capitalization of 379HK$5.2 billion, compared to 625 Hong Kong dollars shares, has been nearly halved.
2) The five-year marketing expenditure exceeds 20 billion.
As mentioned earlier, Bosideng has focused on the main business of down apparel since 2018 and started the transformation and upgrading of the brand. It was also in this year that Bosideng began to enter the era of price increases.
According to Guoxin** research report, in 2017, the proportion of down jackets with a Bosideng brand of more than 1,800 yuan was 48%, and in 2018, down jackets above 1,800 yuan accounted for ** to 241%。
In addition, according to Dongxing** research report, in 2017, before the transformation of the Bosideng brand, the average tag price of products was 1000 yuan-1100 yuan, and since 2018, the average price of the tag price has continued to rise, and by 2021, the average price of the tag price will be about 1800 yuan. After all, the average price of Bosideng down jacket tags has increased by 63%-80% in four years.
Bosideng has also given a corresponding response to ***.
At the June 2022 earnings conference, Zhu Gaofeng, chief financial officer and vice president of Bosideng, said: "In the past five years, Bosideng's overall average growth** has been in double digits. Before the brand transformation in 2017, the average price of Bosideng's tag price was about 1,000 yuan to 1,100 yuan, and it will reach about 1,800 yuan in 2021. But our sales have been steadily rising, so overall, I think people still agree with the price increase. ”
It is worth mentioning that Bosideng has previously launched a "Dengfeng" series of tens of thousands of yuan, and this year Bosideng has launched an outdoor long goose down jacket priced at 7,800 yuan, which has also caused great controversy in the market after its launch. According to the data of Bosideng Tmall***, the product coupon is 7419 yuan, and the current sales volume is only double digits.
*: Tmall. However, the overall performance has also significantly increased Bosideng's gross profit margin. According to the financial report, the gross profit margin of Bosideng brand down jackets is basically maintained at more than 65%.
At the marketing level, in order to strengthen the high-end brand image of "professional + fashion" for consumers, Bosideng is also very generous.
For example, we hire designers who have worked for Hermès, Prada, and Versace to publish co-branded modelsLanding in international fashion weeks and cooperating with top stars;Joint Antarctic scientific expedition launched a professional warmth series;Both Canada Goose and Bosideng have launched the "Extreme Cold Fitting Room" project and so on.
In terms of endorsements, Bosideng's brand spokespersons include not only popular film and television stars such as Yi Yang Qianxi and Yang Zi, but also ski genius Gu Ailing, mountaineer Xia Boyu and so on.
This is also reflected in Bosideng's financial report. According to the financial report, in the past five fiscal years, Bosideng's advertising and other marketing expenses have risen - from 34. in fiscal year 2019$400 million** to 61 by FY20232.5 billion yuan, and the advertising and marketing expenditure in the five fiscal years was as high as 24.8 billion yuan;The selling expense ratio basically remained above 35%. If you add 2023 24 for the first half of the fiscal year 20300 million yuan, and the advertising and marketing expenditure in five and a half years is as high as 26.8 billion yuan.
3) Whether the mass market has been lost.
After returning to the main brand of Bosideng, Bosideng's brand image has indeed changed, becoming more fashionable and more high-end. However, does this also make Bosideng further and further away from the mass market?
After all, at present, China's down jacket market is still mainly based on the mass market.
From the perspective of consumers, according to the data of APS Consulting in 2021, through the analysis of the transaction data of down jackets on a mainstream domestic e-commerce platform, it is found that consumers buy down jackets the most in the range of 200-500 yuan, and the sales volume of down jackets above 1,000 yuan accounts for less than 5%.
In addition, iiMedia Consulting data shows that in 2023, most Chinese consumers are more willing to buy down jackets within 1,000 yuan, and the most concentrated segment is 400-600 yuan, only 33% of consumers choose a price of more than 1,500 yuan.
In fact, according to the data of the China National Commercial Information Center, from the average price calculation, the overall average price of down jackets in 2021 will be 550 yuan. The average price of Bosideng tags is 1,800 yuan, which may be difficult for most consumers to accept.
From the perspective of Bosideng's product matrix, in the down jacket sector, in fact, in addition to the main brand, Bosideng also has a mid-range Snow Fly brand and a low-end Bingjie brand.
However, from the perspective of revenue, in the latest half-year performance as of September 30, 2023, the Bosideng brand achieved revenue of 44200 million yuan, flying in the snow is 2700 million yuan, while Bingjie's revenue fell 65% year-on-year3% to 0100 million yuan.
Obviously, the two down jacket brands Snow Fly and Bingjie have made a limited contribution to Bosideng's revenue, which means that Bosideng still has not opened the low-end market.
In the mass market, in fact, a number of players have been run, such as Yaya, which focuses on cost performance, will have sales of more than 10 billion in 2022, Yalu has also achieved billions of revenue through online channels, and more Internet celebrity brands have also achieved good results in the mass market.
At this point, Bosideng is also in a very embarrassing situation. Although the high-end of the main brand has achieved certain results, in order to consolidate the high-end brand image, it is necessary to continue to invest in cultivating the minds of usersIn the mass market with a large market space, the competitiveness of Flying in the Snow and Bingjie is relatively lacking, resulting in Bosideng not having an advantage.
Brief summary. Bosideng, which started with a parity and people-friendly strategy, has changed the development trajectory of the company after its strategic transformation in 2018. Nowadays, Bosideng has frequently attracted market attention due to first-class problems, and enterprises may also give a more positive response to the market through product quality and design.
Red Star News reporter Liu Mi.
Edited by Yu Dongmei.
*Red Star News, Prizes for Reporting!）