On February 8, Vichy, a leading domestic oral care company, officially submitted a prospectus to the Hong Kong Stock Exchange. Vichy has two well-known oral care brands - Shuke and Shuke Baby, covering toothpaste, manual toothbrushes, electric toothbrushes, teeth washers, mouthwashes, floss, etc., is a leading one-stop oral care product provider in China.
Founded in 2014, Vichy has continued to cultivate in the field of oral care for many years, with remarkable achievements, and has set an industry leader for many times - for the first time to promote professional oral care for children of different ages between 6 months and 12 years old, the first time to use enzymes in toothpaste, the high market share in children's oral care and whitening toothpaste brands, and the richer product portfolio among Chinese oral care companies...
In recent years, with the gradual awakening of domestic consumers to the awareness of cosmetic teeth and oral health, the demand for oral care has gradually expanded, driving the rapid development of the industry. In the face of the 100-billion-level market of oral care, Vichy is ready to make full use of the strong growth opportunities in the market, consolidate its leading position, and further enhance its brand influence and popularity.
Positioning one-stop oral care has repeatedly pioneered the industry
Vichy is a leading oral care product provider in China, covering four major oral care product categories, including adult basic oral care, children's basic oral care, electric oral care and professional oral care.
According to Frost & Sullivan, Vichy ranks fourth in the Chinese oral care market with a market share of 5.3% in terms of retail sales of all oral care products in 2020.
In addition, Vimax has established a leading position in several sub-product categories in the oral care products market – with a market share of 20.4% (in terms of retail sales in 2020, the same below), becoming the leading provider of children's oral care products in China; occupying the highest market share (11.3%) among Chinese whitening toothpaste brands; and ranking fourth in China's electric oral care market with a market share of 4.3%.
In the years of development, Vimax has determined a clear market positioning, and through effective brand promotion and marketing activities, unremittingly disseminate professional and scientific oral care knowledge, and build Shuke and Shuke Baby into a national oral care brand with high visibility and influence.
On the one hand, the Shuke brand provides consumers with one-stop oral care and is committed to creating a high-end, young and professional brand image. On the other hand, Shuke Baby brand considers the different oral characteristics of all ages to provide one-stop oral care for children, according to a survey conducted by Frost & Sullivan, Shuke Baby is a well-known and satisfactory brand in the Chinese children's oral care product market.
It is worth mentioning that with its strong product innovation, development and commercialization capabilities, Vimax has created an industry precedent in many projects - Shuke Baby is one of the first brands to promote professional oral care for children of different ages between 6 months and 12 years old; Shuke Baby's children's morning and evening toothpaste combination is one of the first children's oral care products in China to divide children's brushing into two different routine procedures day and night; Shuke Enzyme Toothpaste was recognized as a high-tech product in Guangdong Province in 2019. It is one of the first toothpaste products in China to use enzymes.
In 2019, 2020 and January to September 2021, Vimax achieved operating income of 1.662 billion yuan, 1.616 billion yuan and 1.230 billion yuan, and achieved adjusted net profits of 48.2 million yuan, 152 million yuan and 129 million yuan respectively.
In addition, the company also has abundant cash flow and a very healthy business model. In the first nine months of 2019, 2020 and 2021, net cash from operating activities was RECORDed at RMB87.8 million, RMB199 million and RMB135 million, respectively.
R & D + channel advantages are prominent, quickly seize the minds of consumers
There are many players in China's oral care industry, and Vimax can grow steadily and establish a leading position, which is inseparable from its unique competitive advantage.
First, in terms of research and development, as of now, Vimax has a total of 112 patents, of which 45 are invention patents, 15 are utility model patents and 52 are design patents, in addition to 25 patent applications are under approval. From January to September 2019, 2020 and 2021, Vimax's R&D expenditure was 34.6 million yuan, 35.4 million yuan and 19.4 million yuan, respectively.
Vimax has a dedicated R&D team led by Executive Director Chen Minshan, who has over 28 years of experience in the oral care industry, with multidisciplinary backgrounds and extensive expertise in various fields such as materials science, food science and biological science. Among them, about 68% of R&D personnel have a master's degree.
In addition, Vimax has established a number of product development and testing laboratories and research models to significantly enhance R&D capabilities and lay a solid foundation for future technological development. It is understood that Vimax has set up seven professional laboratories, including a cell laboratory and a microbiology laboratory. At the same time, the company has established cooperative relations with universities at home and abroad: cooperation with a university of science and technology to optimize the design of electric toothbrush motors; cooperation with a medical university to determine the whitening effect of toothpaste and electric toothbrushes through clinical research, and to carry out application research of natural plant ingredients in oral care products; and to establish a postdoctoral innovation practice base and entrepreneurship and employment base in Guangdong Province.
Up to now, Vimax has 61 new products and upgrades under development, including 11 toothpastes, 9 mouthwashes, 2 oral sprays, 16 electric oral care products, 18 manual toothbrushes and 5 other new product categories.
Second, in terms of channels, Vimax has established a comprehensive and extensive omni-channel sales and distribution network, and its products have spread throughout all provinces, cities and townships across the country, and have entered Wal-Mart, Carrefour, Aeon, RT-Mart, Yonghui, Auchan, Bu Bee Lotus and other international and domestic large-scale chain stores, and achieved all-round coverage such as KA stores, large department stores, cosmetics chain channels, county and township stores and e-commerce (including Tmall, JD.com, Pinduoduo and other mainstream e-commerce platforms, as well as other emerging online channels such as Douyin and Xiaohongshu).
From the perspective of revenue contribution of various channels, from January to September 2021, Vimax's online channels achieved sales of 533 million yuan, accounting for 43.3% of total revenue; offline channels achieved sales of 408 million yuan, accounting for 33.2% of total revenue.
Third, in the layout of the product line, it is one of Vimax's core capabilities to discover and meet unmet consumer needs by creating differentiated products. Vichy has a broader portfolio of oral care companies in China, and according to Frost & Sullivan, Vichy has a larger number of sub-product categories than the other five major oral care companies in China.
Vimax believes that the company's leading brands and full portfolio of products enable the company to generate strong brand and product synergies, diversify revenue streams, and achieve sustainable growth at different stages of the company's brand lifecycle. With a complete portfolio, Vimax's customers are able to purchase different brands of the company's products for their children, spouses or other family members at different stages of life.
Favorable policies and awareness to enhance the growth of the 100 billion market can be expected
The steady growth of China's oral care industry has given Vichy a huge impetus for future growth.
According to Frost & Sullivan, China's oral care market grew steadily from 2016 to 2020, with total retail sales increasing from 49.6 billion yuan to 88.4 billion yuan, with a compound annual growth rate of 15.5%. In the future, with the increase in the penetration rate of diversified oral care products and the upgrading of consumption, the retail sales of China's oral care market are expected to reach 152.2 billion yuan in 2025, with a compound annual growth rate of 11.5% from 2020.
At present, the mainland attaches great importance to the development of people's oral health, "China's medium- and long-term plan for the prevention and treatment of chronic diseases (2017~2025)" will include oral health into the routine examination content, requiring comprehensive strengthening of the prevention of oral health care and other diseases; the National Health Commission's "Healthy Oral Action Plan (2019~2025)" pointed out that by 2025, the population's oral health literacy level and health behavior formation rate will be greatly improved, and oral health services will cover the whole population and the whole life cycle. Better meet the health needs of the people.
In addition, the awareness of beauty teeth in the Chinese market is gradually awakening. CBNData's "Healthy Life Consumption Trend Report" shows that 72% of consumers believe that oral problems will affect social self-confidence, and 67% of consumers believe that oral problems affect appearance; the 2020 White Paper on The Economy of Beauty Teeth shows that "the value of teeth after 95 is supreme"; the 2020 Oral Medical White Paper also points out that the pursuit of "beauty" has become the main focus of online oral consumption.
Therefore, under the dual role of the above policies and awareness enhancement, the market size of the oral care industry in mainland China is expected to further expand, and future growth can be expected. Among them, children's oral care and electric toothbrushes are two major growth highlights.
First of all, in terms of child care, the number of school-age children in the mainland is huge, and the "three-child policy" will further increase the number of children, but children's oral diseases are serious and need urgent care. According to the "Fourth National Oral Health Epidemiological Survey Report", the caries rate of deciduous teeth in 5-year-old children is about 70%; the incidence of caries in 12-year-old children is about 34%. Thanks to supportive policies designed to regulate the rate of dental caries in 12-year-olds, more parents are aware of the benefits of oral care products designed specifically for children, such as cute ergonomic design that makes children's small hands feel comfortable, and fruity toothpaste taste helps to develop brushing habits. The penetration rate of basic oral care products for children increased from 28.4% in 2016 to 36.1% in 2020, and will further reach 43.8% in 2025.
Secondly, in terms of electric toothbrushes, benefiting from the improvement of purchasing power and consumption upgrades, more and more consumers will use electric oral care products to replace manual toothbrushes and flosses to improve dental health and gum health in an effective, beneficial and gentle way. In 2020, the penetration rate of electric toothbrushes in China will be 8.7%, and there is still room for continuous growth in the future.
Vimax will take full advantage of the strong growth opportunities in the market, planning to use the funds raised to consolidate the brand image of a professional oral care product provider that provides one-stop oral care to consumers, as well as improve marketing efficiency, product research and development activities and strengthen research and development capabilities, strengthen offline sales and distribution networks and market penetration, and make equity investment in high-quality niche oral care brands. Text/Ke Ran
Daily economic news
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