The price chases the "goose" to catch the "Mongolia", and Bosideng is no longer close to the people?
The author of this article, Hydrogen Xiaomei, the full text is 3600 words, and it takes about 3 minutes to read.
At present, when it comes to down jacket brands, young people may not even think about it to blurt out three brands, namely Big Goose, Mengkou and Bosideng. In today's national tide, Bosideng is gradually getting rid of some of the original cognitions such as "earthy fashion" and "fashion black hole", and instead, the brand integrates more and more elements of fashion and refinement.
People use real money and silver to pay for domestic brands, constantly pushing up Bosideng's operating performance. In the 2020/2021 fiscal year (as of March 31, 2021), Bosch recorded operating income of 13.517 billion yuan, an increase of 10.9% year-on-year; gross profit margin increased by 3.6 pct to 58.6% year-on-year; and net profit attributable to the mother was 1.710 billion yuan, an increase of 42.1% year-on-year, exceeding the previous market expectation of 40%.
However, behind a series of eye-catching data, Bosideng "accidentally" chose to close offline stores in a big way. As of the end of March 2021, the total number of retail outlets in Bosideng's down jacket business was 4150, a decrease of 716 from the same period last year. Bosideng, which is between the "high-end strategy" and "young people can't afford to love", may not really find the best balance.
(Image source: Bosideng company financial report)
01
High-end = high price?
In fact, the market's perception of Bosideng's "high-end" comes from the year of 2018.
In 2018, Bosideng participated in the runway of New York Fashion Week, and the world's top stars Anne Hathaway, Jeremy Rayner, and Wendi Deng all appeared on the scene to help the brand. Taking advantage of the afterglow of New York Fashion Week, Bosideng has also collaborated with three international designers, former LV designer, former design director Ralph Lauren and Takato Yamamoto.
In September 2019, Bosideng was on Milan Fashion Week again, and invited Nicole Kidman to the scene to help, and also invited Hollywood stars Jissen and widow sister as spokespersons; in November, Bosideng "held hands" with the French temple design master Jean Paul Gautier's collaborative "Bosideng * Gautier Designer Joint Series" down jacket was officially released.
However, "wool out of the sheep", frequent catwalks and marketing, is bound to greatly increase the cost of enterprises, so it is also since 2018, Bosideng began to raise prices in an all-round way, an increase of about 20%-30% in the range, especially the price increase of high-end products reached more than 30%.
In the 2020/2021 fiscal year, in the online sales revenue of Bosideng down jackets, the sales revenue with a unit price of more than 1800 yuan accounted for 31.8%, an increase of 4.3 percentage points year-on-year, and the latest product "windbreaker down jacket" was directly pulled to a price of more than 6000 yuan as soon as it was listed. The company's senior management has repeatedly stressed in public that the trend of Bosideng's transformation to mid-to-high-end will not change.
Although the enthusiasm of Chinese people to pay for domestic brands has not faded in recent years, any consumer has its own price limit. This is also the reason why a down jacket of 10,000 yuan from Bosideng was on the hot search not long ago, and triggered a group of netizens to ridicule "high climbing".
In fact, this down jacket priced at 10,000 yuan is not a new product this year, but the highest-priced "Mount Everest" model in the "Dengfeng Series" launched by Bosideng in October 2019, with a price of 11800 yuan; the lowest price in the series is 5800 yuan; and the full set of limited editions is 4437 pieces.
After browsing the official flagship store of Bosideng Taobao, the author found that there was no product display and specific price information of the down jacket of 10,000 yuan that had previously been on the hot search, and searched according to the price reduction order, the most expensive at present is the newly listed "windbreaker down jacket" series, with a maximum price of 5990 yuan. Other products are mostly between 2000-4000 yuan.
But it should be emphasized that high price does not equal high end. In particular, the financial report data clearly points to the fact that as of March 31, 2021, 72% of Bosideng's retail outlets are located in third-tier cities and below.
Based on this, industry insiders pointed out that although the high-end routes of international brands such as Big Goose and Mengkou are worth learning, the national conditions, positioning, supply chain and market experience behind the brands are different, so Bosideng's bet on high-end strategies should be combined with the actual situation of their own operations.
At the same time, behind the high price, if there is no strong product force and innovation as a support, I am afraid it will be difficult to sustain. This can be seen in the sharp decline in sales of the big goose due to false publicity. What's more, down jackets, as a category that emphasizes warmth, have higher requirements for product quality than other fashion clothing.
02
Once a worry about internal and external troubles
At present, Bosideng's core business is mainly divided into four major segments, namely brand down jacket business, OEM processing management business, women's clothing business and diversified business.
As Bosideng's largest source of revenue, the brand down jacket business accounted for about 80% of the company's total revenue: during the reporting period, the brand down jacket business revenue was 10.889 billion yuan, an increase of 14.5% from 9.513 billion yuan in the previous year; the business revenue accounted for about 80.5% of the total revenue, compared with 78.8% in the same period of the previous year.
In addition, the revenue of the OEM processing management business was 1.536 billion yuan, accounting for 11.4%; the income of the women's clothing business was 947 million yuan, accounting for 7.0%; and the income of the diversified business was about 145 million yuan, accounting for only 1.1% of the total revenue. From the comparison of data, it can be seen that the operation of Bosideng's four major businesses is relatively stable.
Regardless of whether Bosideng's current price has exceeded the affordability of more and more consumers, we still have to admit that this old brand that has been in the field of down apparel for 45 years has grown to this day and still has many places worthy of reference by other commercial institutions. After all, judging from the company's development history, this process has not been smooth.
In the early years, with the advertising and marketing of CCTV Biaowang, the layout of nearly 10,000 chain stores across the country, and the well-rooted advertising slogans such as "best-selling in 72 countries in the world" and "global leading brand", Bosideng successfully planted the cognition of "Bosideng = down jacket" in the consumer market. Coupled with the smooth listing on the Hong Kong Stock Exchange in 2007, Bosideng won the "first brother" status of the domestic down jacket industry.
Since then, in order to break through the seasonal restrictions on down jacket sales, Bosideng has also entered other clothing fields such as men's wear and women's clothing through acquisitions, and announced the opening of a "four-level, diversified, and international" transformation strategy.
But the results of large-scale expansion are often not satisfactory -
On the one hand, in 2013, the avian influenza virus swept the world, a large number of poultry were culled, and the price of duck down and goose down soared, which can be said to have almost strangled the entire down industry;
On the other hand, due to the excellent efficiency in 2012, Bosideng's internal mentality has expanded, and a crazy expansion plan of stores and categories has been proposed, which has proved to be the beginning of "deviation";
At the same time, there are more and more external competitors, ZARA, H&M, Uniqlo, MUJI and other brands have entered the domestic market, taking advantage of the price advantage to do a good job.
Blind expansion, soaring costs, squeezing of domestic and foreign brands, bosideng's influence in the consumer market has not only gradually declined, but also its performance has also fallen off a cliff. According to public information, between 2014 and 2016, Bosideng's revenue fell from 8.238 billion yuan to 5.78 billion yuan; net profit fell from 695 million yuan to 281 million yuan.
After experiencing years of sluggish performance, due to cost considerations, Bosideng had no choice but to embark on the road of self-help of "low-cost destocking" and "closing stores and slimming down". It is understood that between 2014 and 2017, Bosideng net reduced more than 8,000 stores in its down jacket business, and closed the first overseas flagship store in London, England, which was heavily built in 2017.
03
Return to the down jacket "main channel"
From focusing on the main business of down jackets at the beginning of its establishment, to encountering industry pains when rushing to expand new areas, and then to the folding of the diversification strategy, Bosideng has gradually realized that the strength of the company is difficult to support the synchronous development of multiple categories, and perhaps it should first consider taking root in a track.
There is also such a story circulating in the market. The CEO at the time found a well-known strategic consulting agency, which analyzed that Bosideng was facing three fatal problems: one was the aging of the brand; the other was the enemy of the belly, both domestic brands encroaching on the market, and overseas brands seizing the high-end; third, doing everything, but nothing was done.
The waterloo of performance and the decline in consumer perception have forced the once-household brand to readjust its strategic direction. In 2018, Bosideng changed the diversification and four-season strategy advocated in previous years, proposed to "focus on the main channel, shrink diversification", and returned to the main business with the strategy of "down jacket expert".
While refocusing on the down jacket business of the main brand, Bosideng has also upgraded channel upgrades and operational optimization to a new strategic height, with the goal of high-quality development in the next three years. Of course, this also represents the men's, women's and children's clothing business that was extended to solve the down jacket sales off-season in that year, and was finally proved to be a failure.
In today's fierce business competition, no change means "death", and chaotic change also means "death". Every step of the business road must be stepped on solidly, even so fine that every detail can not be biased.
Bosideng, which returned to the main channel of down jackets, did usher in its own glory moment for the second time, which led to the total revenue of 13.517 billion yuan and net profit of 1.710 billion yuan in the 2020/2021 financial report, an increase of 10.9% and 42% respectively. This is also the third consecutive year that Bosideng has achieved double growth in revenue and profit.
But here we have to mention the inventory turnover problem of Bosideng.
Bosideng's inventory turnover reached 175 days, the company's highest turnover days in nearly five years. Although the company gave the following explanation - in early 2020, due to the impact of the new crown epidemic, the inventory level was high at the beginning of the year; in the second half of the year, the purchase price of raw materials continued to rise, and the reserve procurement of certain raw materials was carried out. In any case, Bosideng's inventory turnover has become significantly longer.
For many people to call Bosideng "China's version of the big goose", industry insiders believe that the biggest difference between Bosideng and the big goose is the different way of brand premium -
Canada Goose entered the fashion field earlier, is supported by culture, which is consistent with the current and future consumption trends for a long period of time; and Bosideng belongs to the capital strong push and pull type, star endorsements, short-term marketing stimulus may produce phased effects, but in the long run, it is also necessary to promote the overall environment such as quality, price, terminal, and service.
In the view of industry insiders, compared with other clothing categories, high-end down jacket raw materials are high, technology development is difficult, and the top consumer groups are limited, so Bosideng, which focuses on laying third-tier and below cities, faces certain challenges in taking the high-end route of down jackets. In addition, from the perspective of market experience, retail brands want to innovate existing sales channels, and the interests involved are also very large.
For Bosideng, in the future, finding ways to break the source of income is too single and identifying the positioning of differentiated brands (matrix) may be more long-term than simple and rude high prices.