Reporter | Fang Wenyu Editor| Jiang Yuyue
Han Shu, who took the lead in terminating his contract with Wu Yifan, is going public, and will rush to the IPO after 7 years.
On January 17, according to the Hong Kong Stock Exchange, Shanghai Shangmei Cosmetics Co., Ltd. (hereinafter referred to as "Shangmei Group"), the parent company of domestic cosmetics company Han Shu, submitted a prospectus to the Hong Kong Stock Exchange for listing in Hong Kong.
According to the prospectus data, Shangmei Group has achieved steady growth in operating performance in recent years. In 2019 and 2020, the adjusted profit of Shangmei Group was 114 million yuan and 265 million yuan respectively, and the adjusted profit in the first three quarters of 2021 reached 285 million yuan, an increase of 45.3% over the same period of the previous year.
01
Revenue of 3.3 billion multi-brand layout
According to public information, Shangmei Group was established in 2002. Before 2015, the company was named "Shanghai Kaka Cosmetics Co., Ltd.", which was later changed to "Shanghai Shangmei Cosmetics Co., Ltd."
In December 2020, the company type was changed to "joint-stock limited company", which shows the strong listing ambition of Shangmei Group.
According to reports, in 2015, Lu Yixiong, founder and CEO of Shangmei Group, said that he planned to complete the company's listing in 2018, when the IPO plan was not completed.
Lu Yixiong, founder and CEO of Shangmei Group
Earlier, Ge Wenyao, who was the chairman of Shanghai Jahwa United Co., Ltd., said, "Lu Yixiong is not short of cash, he wants to go public, listing means that it must be standardized, and there will be more talents and funds after listing." ”
Shangmei Group also said in the prospectus that the net proceeds from the IPO will be mainly used for brand building, improving research and development capabilities, and strengthening product penetration by increasing the breadth and depth of the sales network.
According to the Frost & Sullivan report quoted in the prospectus, the size of China's cosmetics market is expected to reach 845.3 billion yuan in 2020 according to retail sales, and it is expected to reach 1.3 trillion yuan in 2025.
It is worth noting that according to the Frost & Sullivan report, Shangmei Group is the only domestic cosmetics company with two skincare brands with annual retail sales of more than RMB2 billion in 2020, the two brands are Han Shu with retail sales of 2.9 billion yuan and Yiyezi with retail sales of 2.2 billion yuan.
In terms of financial performance, Shangmei Group achieved steady growth in operating performance during the reporting period, with revenue increasing from 2.874 billion yuan in 2019 to 3.382 billion yuan in 2020; adjusted profit of Shangmei Group in 2019 and 2020 was 114 million yuan and 265 million yuan, respectively, a significant increase of 132.5%.
Among them, the revenue mainly comes from the three brands of Han Shu, Yiyezi and Red Elephant, which contributed 91.8% of the total revenue in 2020.
According to the prospectus, in order to meet the changing market demand, Shangmei Group is constantly incubating and developing new brands for different consumer groups.
In 2019, Shangmei Group has successively launched the public sensitive skin skin skin care brand "High Muscle Energy" and the pregnancy muscle sensitive skin care brand "Amil", launched the wash brand "Jifang" in 2021, and plans to launch the skin care brand "An Minyou" for sensitive skin and the high-end anti-aging brand "Yamada Farming" this year.
Chao Chenglin, director of the Industrial Space Research Institute, told the "21CBR" reporter that the multi-brand strategy uses product and positioning differentiation to cover as many consumer groups as possible, which will help to improve market share. At the same time, attention should be paid to the integration of the same type of brand to improve product quality.
02
Increase the size of e-commerce to get rid of the awkward positioning
Han Shu and Yiyezi have all entered the consumer's field of vision with crazy screen-brushing advertising, and marketing costs are not cheap.
Han Shu once revealed to the media that in 2016, the company's advertising scale expanded to 1.5 billion yuan. In the words of Lu Yixiong, "Advertising may not be able to make a brand, and it is difficult to make a brand without advertising." ”
While frantically throwing money into implants, title TV series and variety shows, Shangmei Group is not soft in inviting celebrity endorsements.
Lin Zhiling, Guo Caijie, Naza, Jing Tian, Nicholas Tse, Lu Han, Wu Yifan, Tong Liya, etc. have all been the spokespersons for Shangmei's products.
After 2019, Shangmei Group began to lay out online and successfully survived the epidemic barrier.
Among the online channels, Shangmei Group has long-term cooperation with major e-commerce platforms such as Tmall and JD.com, and has also actively explored new growth potential in emerging media platforms such as Douyin and Kuaishou. From January to November 2021, Han Shu's GMV on Douyin was about 820 million.
Dai Yusen, an investor of Perfect Diary and a partner of Zhen Fund, previously told the "21CBR" reporter that the new brand of domestic products has more effective marketing channels and environment.
"With Taobao Live's revolutionary communication and marketing approach, even a very small, very early brand can quickly and efficiently reach thousands of users and establish close connections with them."
According to the prospectus data, The online sales of Shangmei Group in 2020 were 2.543 billion yuan, accounting for 75.2% of the total revenue, an increase of 69.0% over 2019.
In 2021, the most out-of-the-loop event of Shangmei Group is "terminating Wu Yifan".
Han Shu immediately lifted the endorsement cooperation with Wu Yifan, resulting in a sharp increase in traffic in the brand Taobao live broadcast room that night, and the number of viewers reached millions. According to statistics, the peak number of online people in HanShu Live that night exceeded 42,000, with sales reaching 2.96 million yuan and selling more than 6,000 boxes of masks.
The carnival is temporary, and in recent years, the decline of the Shangmei Group has gradually emerged.
According to Euromonitor data, in 2020, the top five local cosmetics groups in China are Baijiling Group, Galan Group, Shanghai Jahwa, Shangmei Group and Polaria. At the same time, Yixian E-commerce and Bethany can also be close to the top ten in their subdivision tracks.
Most of these brands are multi-brand strategies, and Shangmei Group does not have an advantage.
In addition, cosmetic raw material manufacturers such as Bloomage Bio also joined the battle, and its Kwadi, Mibel, and Runbaiyan gradually divided the market.
Lu Yixiong also admitted that after experiencing rapid growth, the two major brands of HanShu and Yiyezi are facing the pressure of slow growth and product upgrading.
For Shangmei Group, which has been working in the sinking market for many years, today's brand positioning is slightly embarrassing.
Continuing to take root in the sinking market will obviously not be the preferred strategy of Shangmei Group, as can be seen from its plan to launch a high-end anti-aging brand "Yamada Farming" this year.
Changing the brand positioning upwards is not an easy task.
Zhuang Shuai, founder of Bailian Consulting and an expert in the retail e-commerce industry, previously told the "21CBR" reporter that the transformation of beauty brands mainly looks at three aspects: media, channels, and vision, and Shangmei Group has not been able to play well.
Taking the marketing media as an example, the exposure of Perfect Diary, Huaxizi's key B station, Little Red Book, Han Shu and Yiyezi is relatively low.
"International brands have mature experience, sound sales networks, strong channel strength, and basically there is no market in China that cannot be conquered." Zhuang Shuai said, "In the field of cosmetics, the more sinking the market, the more recognized international brands; people in first-tier cities are more likely to accept new domestic brands such as Huaxizi and Perfect Diary." ”
If you want to seize the old domestic products in the new market, it is really difficult.
"High-end brands can launch low-end versions to snipe the low-end market, and low-end brands turn to high-end, and they need to slowly climb the image positioning, which is a difficult process." Independent financial commentator Zhou Zhengguo told 21CBR.
It is not difficult to go public in the United States, and what may cause Lu Yixiong a headache may be how to get rid of the embarrassing positioning and capture the hearts of consumers.
Title image source: Han Shu KANS Weibo