In recent years, the rise of domestic toothpaste, in addition to the two-sided needle, Yunnan Baiyao and other old brands, the new domestic brand toothpaste is about to land on the Hong Kong Stock Exchange. Vimax Industrial (Guangdong) Co., Ltd. (Vichy) submitted a prospectus to the Hong Kong Stock Exchange on 8 February to be listed on the Main Board of the Hong Kong Stock Exchange.
According to the data, Vimax was officially established in 2014 and currently has two core brands: Saky and SakyKids. In addition to the two core brands, the company is incubating three other brands, namely "SANPLAX", "Saky#c" and "JoysKids".
According to the prospectus, Vimax's revenue in 2019 and 2020 was 1.662 billion yuan and 1.616 billion yuan, respectively; in the first nine months of 2021, it was 1.23 billion yuan, compared with 1.072 billion yuan in the same period of the previous year; and in the nine months from 2019 to September 30, 2021, The adjusted net profit of Vimax was 48.193 million yuan, 152 million yuan and 129 million yuan, respectively.
At present, Vimax mainly has four businesses, namely adult basic oral care, children's basic oral care, electric oral care and professional oral care, of which adult basic oral care business accounts for a relatively large proportion, in the reporting period, adult toothpaste products generated revenue of 795 million yuan, 784 million yuan, 498 million yuan and 600 million yuan, accounting for 47.8%, 48.5%, 46.5% and 48.9% of the total revenue, respectively.
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. China's oral care market grew steadily from 2016 to 2020, with total retail sales increasing from RMB49.6 billion to RMB88.4 billion, representing a CAGR 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 RMB152.2 billion in 2025, with a compound annual growth rate of 11.5% from 2020.
Increased investment in online marketing
Vichy's emphasis on marketing should start from more than a decade ago, in 2010, the sales of just over 100 million yuan vimezi, at a high price invited Beckham to endorse shuker toothpaste, and soon in 2012, Vichy's annual sales exceeded the 1 billion yuan mark.
Founder Cao Ruian once said in an interview: "From the leap of 100 million to 1 billion, Vimax only took 3 years, thanks to Vichy's "bold" brand marketing strategy. ”
In recent years, Vichy has signed actor Li Bingbing and boy band S.K.Y Sky Junior as spokespersons for its products, and brand promotion has also appeared in popular dramas. According to the prospectus, Vimax's advertising expenditure reached 111 million yuan in 2019.
The funds raised by Vimax will be used to develop online and offline brand building, including advertising on social video websites and short videos, and advertising in crowded areas to increase brand and product awareness.
In terms of selling expenses, in 2019, 2020 and the first nine months of 2021, Vimax's sales and distribution expenses were $734 million, $631 million and $508 million, representing 44.2%, 39.1% and 41.3% of the revenue for the same period.
Vimax's sales channels are divided into online and offline, and the Daily Business Report (www.bizvcw.com) notes that Vimax's online promotion investment, as a proportion of sales and distribution expenses, has increased from 12.3% in 2019 to nearly 30% in the first three quarters of 2021.
Correspondingly, in 2019, 2020 and the first nine months of 2021, the proportion of revenue from Vimax's online channels also increased, at 37.9%, 41.7% and 43.3% respectively.
As of September 30, 2021, Vimax has 32 self-operated online stores and 48 online dealer-operated online stores on Tmall, JD.com, Pinduoduo and other mainstream e-commerce platforms, as well as other emerging online channels such as Douyin and Xiaohongshu.
According to the prospectus, Vimax defines her online operating model as "3D" – direct to consumers: continuously launching new products and upgrading existing products through consumer feedback; deciding by fans: communicating directly with loyal customers who have purchased products multiple times, including deciding on the packaging design of new products through online voting; discussing with key opinion leaders: having established extensive cooperation with key opinion leaders on platforms such as Douyin and Weibo, and setting up a comprehensive data evaluation model to evaluate the performance and sales feedback of a key opinion leader to customize content for key opinion leaders for maximum impact.
The audit system has been improved to eliminate infringement
A lot of brand publicity has also attracted a lot of trouble. Vimax stated in the prospectus that the Company promotes its brands and products through various channels (including television, billboards and posters, news and magazines, the Internet and social media) and may from time to time be questioned about the origin of certain data in the advertisement or the selected terms. For example, a promotional material by Vimax was found by the local market supervision and management department to violate the Anti-Unfair Competition Law of the People's Republic of China and was fined 30,000 yuan.
In addition, Vimax said that other aspects of its day-to-day operations, such as images, fonts or music used in advertising and promotional activities, as well as computer software used, may be claimed by third parties for infringement or misappropriation. Any intellectual property dispute may have a material adverse effect on our business, financial condition, results of operations and prospects.
It is interesting to note that in terms of infringement disputes, in the early years, Wei Meizi was sued for reprinting the comics of writer Lin Ji on Weibo. In response to this incident, Vimax responded to the Daily Business Report (www.bizvcw.com) and said: The company respects intellectual property rights, the two sides have settled, and after several rounds of internal rectification, standardized the audit system, and no similar incidents have occurred again.
It is understood that this incident occurred on March 30, 2019, Lin Ji and Vimetz copyright infringement dispute case, through the Beijing Chaoyang District People's Court first-instance judgment, Vichy issued an apology statement on Sina Weibo for 24 consecutive hours, compensating Lin Ji for economic losses of 55,500 yuan and compensating Lin Ji for reasonable expenses of 1,000 yuan.
After that, Vimax appealed to the Beijing Intellectual Property Court, requesting that the first-instance judgment be revoked and that all of Lin Ji's first-instance litigation claims be rejected in accordance with the law. Reasons include that Lin Ji's popularity is not high, and the amount of compensation determined by the first-instance judgment is too high. However, the court eventually upheld the original judgment and rejected Vichy's request.
In addition, in 2016, Vimax also registered Shuk as a defensive trademark because of the "Shuk" that drove the plane in the children's cartoon "Shuk and Beta", whose name was similar to the shuker brand, although it was not used in business operations and product marketing, but it was still publicly defended by the fairy tale king Zheng Yuanjie.
In December 2018, Zheng Yuanjie's company filed an application with the State Intellectual Property Office, arguing that Vimax's trademark infringed the name of the copyrighted figure. Finally, on September 6, 2019, the State Intellectual Property Office declared the trademark "Shuk" No. 17195498 (Class 3, toothpaste, etc.) registered by Vimax invalid.
However, on the eve of Vimax's application for listing work, Zheng Yuanjie has issued a document saying that Vichy has been authorized to use the name and image of "Shuk Beta" to promote the sale of domestic children's oral care products. Vimax also said that the copyright license agreement signed by the two parties expired on July 29, 2024, and can be renewed with the consent of both parties.