After so many difficult moments, Zheng Yaonan chose to "embrace change"

On March 31, Urban Beauty released its 2021 annual financial report.

Revenue for the full year of 2021 was RMB3.36 billion, up 9.7% year-on-year.

Among them, offline sales increased by 5.7% year-on-year; in 2021, online e-commerce achieved a multi-platform matrix, and the overall revenue increased by 8.9% year-on-year. However, due to macro factors and the pain of deepening reform in response to the "secondary entrepreneurship".

For Zheng Yaonan, founder and CEO of Urban Beauty, the most important thing is to stick to the original intention and "make a really good underwear" for the broadest group of women in China.

In the face of major changes, Zheng Yaonan still chooses to "embrace change", from internal collaboration to external collaboration, condensing management consensus, reducing costs and increasing efficiency, focusing on key digital transformation, and strengthening long-term sustainable development initiatives. "Looking to the future, we will integrate the resources we need to leverage our core strengths that differentiate our peers to unlock the intrinsic value of urban beauty." Zheng Yaonan said.

The most important thing is sustained growth

From 1998 to 2022, Urban Beauty has developed from brand creation to china's largest brand intimate clothing enterprise, from the initial OEM to "retail + channel", "commodity + brand", from chain brand operators to value investment platform transformation and upgrading process, covering the 24-year development process of Urban Beauty.

Along the way, the urban beauty under the leadership of Zheng Yaonan has experienced twists and turns, not only the highlight of the listing on the Hong Kong Stock Exchange in 2014, but also the vision of introducing giants such as Fosun, JD.com and Tencent around 2017, and the new test under the market change in 2020 and 2021.

Zheng Yaonan has witnessed the ups and downs of urban beauties, and at the same time adheres to the original intention of the urban beauties' industry. "The most important thing is continued growth, because it means that consumers continue to buy, indicating that they still have confidence in the brand, products and services of Urban Beauty," Cheng said.

Revenue for the full year of 2021 was RMB3.36 billion, up 9.7% year-on-year. The annual revenue is divided into two parts: online and offline.

Specifically, the total revenue of offline sales in 2021 was 2.41 billion yuan, an increase of 5.7% year-on-year.

Online, in 2021, e-commerce will achieve a multi-platform matrix, and the overall revenue will increase by 8.9% year-on-year. In addition to Taobao, Tmall, JD.com and Vipshop, in 2021, we will add new cooperation between Douyin, Kuaishou and Pinduoduo; launch new online products, arrange multiple live broadcasts, and reach multiple interactive cooperation with network experts and celebrities.

A business whose founder is the ceiling. As long as the founders continue to iterate, the business can continue to move forward. Zheng Yaonan is thinking about the complex macroeconomic situation and the increasingly competitive market environment, and actively embracing change.

The objective environment squeezes and still embraces change

2021 is a year of challenges and uncertainties. The domestic economy in the second half of the year has been tested again due to the epidemic. Gross domestic product grew 8.1 percent year-over-year, but grew at 4 percent in the fourth quarter, the lowest level since 2020. The domestic consumer market and the economy are further under pressure.

In addition, in the context of global monetary release and imbalance between supply and demand, raw material prices continued to rise, especially cotton, an important raw material for intimate clothing, rose by about 44% year-on-year.

In addition to the macroeconomic impact, in order to achieve revenue growth in 2021, Urban Beauty has significantly increased various expenses, such as improving incentive programs for franchisees and employees, launching extensive promotional activities, and increasing a number of executive and consulting expenses, but these expenses have not been effective as planned, but have seriously affected the business results of Urban Beauty.

At the end of 2021, under the severe pressure of the test of the epidemic, the pressure on the economy, and the entry of "secondary entrepreneurship" into the deep water area, Zheng Yaonan, founder and chairman of the group, took over as CEO and launched a new round of reform plans. Since the second half of 2021, the group structure and the merger of departments have been gradually simplified, and the adjustment of the group structure has been promoted. Urban beauties still choose to embrace change.

Core values have never changed

"Consumer-centric" is the core corporate value that Zheng Yaonan has always adhered to at the beginning of the establishment of Urban Beauty.

The domestic intimate clothing market is changing rapidly. Consumers pay more attention to comfortable and healthy products than sexy products, while Urban Beauty adopts consumer-centered design to enhance product strength to meet customer needs.

In 2021, Urban Beauty will optimize the product structure, reduce product SKUs, further strengthen product strength, and focus on resources to create the ultimate explosive products. Taking bras as an example, the proportion of evergreen models increased from 6% to 12.5% in 2021, and the number of inventory units fell by about 42.8% year-on-year.

2021 annual urban beauty products focus on creating a single hit in the intimate clothing category, including dust-free cotton homewear - for pet lovers to create a "is not hairy" homewear; soft cup underwear - to create a portable to soft underwear series; vbra underwear - a new generation of vbra underwear, with technology to refresh the new standard of underwear; no size underwear - explosive ONE SIZE underwear, one code to eat.

In 2022, where will the urban beauty go? "Reshaping products, reshaping brands, and reconstructing channels" is the path of change that the management led by Zheng Yaonan wants to complete.

The "United Front" of Urban Beauty

Zheng Yaonan's focus on China's lingerie industry has never changed. China's underwear industry is more than 200 billion, but the Chinese market has not produced a giant with a market share of nearly 60%. Although e-commerce brands have occupied the outlet of public opinion in the form of single product breakthroughs in recent years, their volume, scale and service population are still far from meeting the needs of consumers.

With the largest offline chains, the largest sales scale and the most perfect supply chain alliance, Zheng Yaonan hopes to lead China's underwear industry to digital upgrading, and then take the lead in completing the evolution of the underwear industry Internet.

To complete the change, urban beauty needs to "integrate the resources needed".

Not only in cooperation with JD Technology, Zheng Yaonan needs to integrate internal and external resources to form a "united front", build a new online and offline territory, and integrate the organizational structure to achieve digital transformation and upgrading.

"Choose the right target market, achieve enough scale, and generate enough value", this is Zheng Yaonan's insistence. Therefore, Urban Beauty will introduce all the social resources that help the industry evolve, including JD Technology.

Urban Beauty will reshape the iterative upgrading of products and create new explosive products: in 2022, it will continue to launch explosive products such as "dust-free cotton home wear", "Soft heart cup bra", "vbra underwear" and "upgraded versions of sizeless underwear", continuously improving product quality and achieving continuous product stacking upgrades. At the same time, we continue to conform to the market force to create and launch new explosive products. And research and development of new raw materials, improve the scale efficiency of evergreen models: strengthen cooperation with top raw material manufacturers, develop and develop new raw materials, in the past two years have developed about 40 raw materials and used in products; at the same time increase the proportion of evergreen models and reduce the number of inventory units of products to enjoy scale benefits.

Urban Beauty will continue to expand the supply chain strategic alliance and create high production and marketing strategic synergy: In 2021, the Group will establish a supply chain strategic alliance with a number of powerful suppliers, so as to improve the efficiency of production and marketing synergy, respond quickly to market changes, deliver on time, reduce procurement costs, ensure quality and improve innovation capabilities.

Urban Beauty will reconstruct offline store channels and tap to help the development of potential stores: in 2022, it will expand its business territory to the blank market, optimize the ecological layout of the original stores; retain the old stores with development potential and strive for rent reduction.

It is worth noting that the strategic partners of Urban Beauty include China's top partners:

For example, the establishment of digital strategic cooperation with JD.com, the two sides will give full play to their respective advantages, and will jointly establish a joint innovation laboratory with a professional team. It revolves around the digitization of "user and member operations", "channels and operations", "supply chain", "products and production", and "infrastructure".

The two sides will continue to carry out comprehensive and in-depth cooperation in the field of technology, create a consumer-centric, data-driven business model, promote the integration and development of cutting-edge technology and the retail industry, innovate and win-win results, provide consumers with better products and services, and create a benchmark for digital transformation in the industry.

Even in the face of greater macroeconomic tests, market twists and turns, and organizational pains, in 2022, Zheng Yaonan, founder of Urban Beauty, made the choice of "embracing change", just like Ali, Tencent, and Meituan are doing.