Image source @ Visual China
Text | Consumer Industry, author 丨 Niko, reporting | Consumer world
Stationery belongs to the typical "small products, large industries", and the market size has exceeded 100 billion. From the analysis of the entire industry chain, what are the opportunities and challenges in the stationery industry?
01 Stationery industry: small products hide a big market
The stationery industry is a typical "small product, big market", and unconsciously, the market size has reached hundreds of billions of dollars.
According to the "2022-2028 China Stationery Industry Market Special Research and Development Strategy Analysis Report" released by Zhiyan Consulting, the global stationery market size was 175.2 billion US dollars in 2013, and the market size in 2020 was 189.6 billion US dollars, and the average compound growth rate from 2013 to 2020 remained at 1.13%.
Among them, the scale of China's stationery market reached 163.891 billion yuan.
In the Internet era, the rise of online office, some stationery is replaced by electronic products, resulting in a certain impact on the stationery industry, the growth rate has changed from double-digit growth before 2013 to single-digit growth, 2013-2019, the annual compound growth rate of the domestic stationery industry is about 7.8%.
▲Image source Zhiyan Consulting
According to functional use, stationery can be divided into office stationery, writing instruments, student stationery, and other educational supplies, corresponding to the market share of 61%, 21%, 12%, and 6%, respectively.
From the perspective of consumers, the consumer population of the stationery industry is mainly about 300 million students and about 100 million office workers. From the combined effect of the birth rate, population aging, national education funding, and the expansion of higher education, the main group of stationery consumers may fluctuate slightly in the next few years, but the overall situation remains stable.
From the perspective of per capita stationery consumption, although the average stationery consumption of Chinese is increasing, the per capita stationery consumption in 2018 was 105/year, compared with 240/yuan in developed countries, there is still a large room for improvement.
From the perspective of the number of stationery enterprises, the industry continues to develop and expand, the data show that there are currently 5.1816 million registered "stationery supplies" related enterprises, and the number of stationery-related enterprises registered in the past ten years has increased year by year. At the same time, it also presents the characteristics of small scale and large number of enterprises, with sales of more than 10 million stationery companies accounting for 10%, while there are only 4 stationery companies with sales of more than 1 billion, accounting for 0.05%, which are Chenguang Stationery, Qixin Group, Guangbo Shares and True Color Stationery.
At present, most of the domestic processing stationery enterprises, most of the enterprises have long been OEM OEM processing, serving overseas brands, low added value of products and lack of core technical innovation.
At the same time, limited by the degree of mechanization of the production mode of China's stationery industry is not high, it is a labor-intensive industry, and with the general rise in the price of chemical raw materials, the profit margin of China's overall stationery industry is low.
For example, in 2020, the gross profit margin of Stationery Products of Qixin Group and Guangbo Co., Ltd. has dropped to less than 20%, and only a few enterprises such as M&G Stationery have maintained a gross profit margin of about 30%.
According to Euromonitor data, the US writing instrument industry CR5 in 2019 was 66.3%. The CR5 of the Japanese writing instrument industry is 62.5%, compared with the concentration of developed countries such as the United States and Japan, the concentration of the Chinese market is still very low, and there is still a lot of room for improvement.
From the perspective of sales channels, the main sales channels of the stationery industry are offline channels. The data shows that in China's total offline sales in 2019, modern grocery retail stores accounted for 36.5%, and traditional grocery retail stores accounted for about 13.9%.
With the integration of the industry, leading enterprises have occupied a favorable position in the market due to their advantages such as scale, brand recognition and wide channel coverage, and their market share has been further improved.
02 Full analysis of the industrial chain of the stationery industry
Upstream: The main raw materials rely on imports
At present, although mainland enterprises have realized the independent production of raw materials such as pen heads and inks, there is still a considerable gap between them and international top enterprises in the research and development of manufacturing equipment for pen heads and inks, raw materials and core components manufacturing.
From the financial report of Chenguang Stationery, we can see that most of the raw materials such as pen heads, inks, and plastics in writing instruments are imported from abroad, such as high-quality pen heads from Switzerland, ink from Japan and Germany, and plastics from crude oil importers.
Even as domestic technology continues to mature and quality suppliers continue to increase, the materials and processing equipment required for pen manufacturing still rely on Japanese imports.
Therefore, the price of foreign raw materials and the RMB exchange rate have become important influencing factors for the cost of major stationery enterprises.
Leading enterprises such as M&G and Qixin are more likely to rely on the scale advantage to lower the import price, thereby obtaining cost advantages.
▲Image source network
Midstream: OEM-based, competition pattern is more dispersed
Domestic stationery is dominated by OEMs, but in recent years, export prices and profits have weakened due to rising labor costs.
The data shows that in 2019, the export value of the pen-making industry was 2.8 billion US dollars, down 0.5% year-on-year. At the same time, brand manufacturers are gradually grabbing market share with a complete chain of design, production and sales.
In the various segments of the stationery market, there are differences in the core products of different brands. M&G and True Color are leading in the field of writing and student stationery; Unity and Strength are leading in the field of office stationery; and Guangbo is leading in the field of this book.
China has not yet appeared in the stationery manufacturing oligarchy across various sub-segments of stationery, and the market pattern is still relatively fragmented, WITH CR4 less than 17%.
Referring to the Japanese and American markets, industrial concentration is the only way for the development of the industry, and the future domestic stationery market share is expected to further concentrate on leading enterprises with brand and channel moats, design and production technology advantages, and perfect logistics systems such as Chenguang, Deli, and Qixin.
The above leading companies have two major development trends, on the one hand, the acquisition of enterprises with core competitiveness and similar businesses to strengthen product and channel advantages; on the other hand, the acquisition of enterprises that are different from their own business operations, but have a high market share in the segmentation field, to achieve diversified development.
For example, Qixin Group wholly acquired Hangzhou Maimiao in 2015, the main purpose is that Hangzhou Maimiao has advantages in Internet marketing, Internet user behavior analysis, etc., and can form synergies with Qixin's original business.
Downstream: offline is the mainstay, and the channels are highly dispersed
At present, the downstream sales channels are mainly offline, and the proportion of offline online is close to 9:1.
Among the offline sales channels, office stationery supplies stores are the main places, accounting for 39%, followed by hypermarkets with 20%, supermarkets with 12%, traditional grocery retailers with 12%, and department stores with 3%.
Although the current domestic online retail accounted for only about 14%, in the Internet era, online channel dividends need to be tapped, and it is expected to move towards overseas mature markets such as the United States (online retail accounts for about 30%).
03 How does M&G become a leader in the domestic stationery industry?
Chenguang Stationery is a leading enterprise in the domestic stationery industry, looking back on its development history in the past 30 years, mainly going through 3 stages:
Stage 0-1: In the early stage of entrepreneurship, stationery agents started
In 1989, Chen Xueling, Chen Huwen, Chen Huxiong and other three brothers and sisters of the Chen family founded Chenguang Stationery. Started as a stationery agent, mainly acting as an agent for Korean and Taiwanese products.
With the precipitation of time, M&G Stationery has initially established a nationwide marketing network market foundation and owned its own manufacturing plant through trade and agency.
Until 1997, under the Asian financial crisis, a large number of foreign stationery suppliers closed, so that the founders realized the importance of their own brands, so that the "M&G" brand was born, and the business was transformed from stationery agents to OEM to ODM, committed to "making their own pens".
Since 2004, the company has creatively introduced brand conceptualization and IP marketing models, and taken the lead in launching the concept products of "examination special" and "Confucius Temple Blessing" to drive demand with innovation; jointly launched the "Love of the Heart" series, Miffy series, Ming Xiaoxi series of student stationery, and deeply bound customers.
Stage 1-10: Transformation of independent brands, deep ploughing of sales channels
In 2008, M&G Stationery took the lead in adopting the chain franchise model in the industry, and gradually built a "M&G Partner Pyramid" marketing model of "layer by layer investment, layer by layer sharing", and jointly established a "stable and win-win" distribution system with dealers at all levels.
Up to now, M&G Stationery has 36 first-class dealers and 1200 second- and third-level regional dealers.
In 2012, the company established M&G Colip to expand the direct sales business of to B office; in the same year, it opened a new model of M&G Life Hall and initially explored a new model of traditional retail.
▲The picture source is Chenguang Stationery
Stage 10-n: Develop the to B business and expand the to C business to different life scenarios
After more than 20 years of long-distance running, M&G Stationery finally successfully listed the company in 2015.
After the listing, M&G Stationery accelerated capital operation and rapidly expanded the field of office direct sales through mergers and acquisitions. In 2017, Chenguang Colip acquired Oudi China, expanded the direct sales business of to B office, and entered the stage of rapid volume increase and market share.
To C retail further deepened and diversified expansion, launched the "Perfect Store" plan, and led the head stores to increase revenue generation;
In terms of high-quality cultural creation, in 2016, the 2.0 version of the Chenguang Life Hall was launched, Jiumu Miscellaneous Goods Society, which conformed to the trend of consumption upgrading and actively innovated the retail channel model.
In 2020, affected by the epidemic, M&G Stationery increased its online business layout, launched the M&G Alliance APP, connected headquarters and terminals, fed back cultural and creative products and new retail operation experience to traditional offline channels, and continued to enhance terminal competitiveness.
Looking at the development history of Chenguang Stationery, it is not difficult to find that its channel layout is wide and its advantages are strong.
Chenguang Stationery has more than 80,000 school-side stores, covering more than 80% of the mainland campuses, far ahead of other competitors in the stationery industry, and building a strong barrier.
In addition, the products also cover many fields such as mass stationery/ office stationery / boutique cultural creation / children's art, while different product lines have different emphases, such as mass products from the perspective of demand, to create cost-effective products; office products play a scale effect, service and product parallel; children's art focuses on key categories, reasonable distribution of price bands, improve the value of single products.
The rich product matrix attracts consumers of different generations, from children and students to white-collar workers and adults.
04 Where is the next flashpoint for Chinese stationery?
When it comes to the future development trend of stationery categories, it can be summarized into the following three points:
Stationery - > cultural creation
According to the survey results of a German business research institute on the promotional market, nearly 60% of distributors want to highlight the personalization of products. It can be seen that the pursuit of appearance fashion has increasingly become a direction of current stationery consumption.
In particular, students and young female consumer groups prefer well-designed, novel and bright products, and while transcending the characteristics of practicality, stationery can also become works of art and gifts for people to appreciate, which can be described as killing two birds with one stone.
In particular, students' favorite cartoon pictures, anime, games, film and television, music, popular colors and other fashion elements can be fully reflected in a variety of new stationery.
Taking M&G Stationery as an example, the development of high-quality cultural and creative products in the head IP product space (including blind box products, the British Museum, the Forbidden City, Miffy, the Voyage King, Detective Conan and other IP cooperation products) expands the high-value product line.
The product is low-carbon and environmentally friendly
As early as 2009, Greener World's survey showed that the purchase volume of environmental protection products in the international market has been increasing in recent years, of which environmentally friendly office supplies have led the growth of environmental protection products.
With the improvement of environmental protection requirements of governments, hard regulations such as energy conservation and emission reduction, and the gradual improvement of consumers' attention to the environment, green environmental protection is undoubtedly the trend of the times.
According to industry insiders, when new competitive elements such as green environmental protection sweep the world, some stationery companies develop stationery supplies such as reeds, cotton, bagasse and even stones to make exquisite books, photo albums and notebooks, and strive to gain a foothold in a new round of competition.
The era of environmental protection of stationery is coming.
Product diversification
In recent years, stationery products have become more and more diversified in terms of style, style and color.
For example, consumers give stationery products as gifts to children as gifts. Statistics show that in the past few years, stationery gift sales have increased to about 10% to 20% of the sales of gift companies.
Stationery began to take off the traditional coat, moving towards personalization and fashion, and some products became collectibles.
Resources:
[1] Chenguang Stationery - retail operation capabilities, to create a stationery pilot brand, Shenwan Hongyuan research
[2] Chenguang Stationery First Coverage Report: Shouzheng out of the new, the first brand of national stationery to the cultural and creative giants steadily advancing, the new era of securities
[3] Analysis of the development status of The market segment of China's stationery industry and the competitive pattern of enterprises in 2020, Zhiyan Consulting