Image source @ Visual China
Text | Finance and economics are unscrupulous, the author | Jiang Xiaoqiao
Who is more difficult to sell an umbrella for 20 yuan for hundreds of millions, and to sell an umbrella for 200 yuan?
Maybe it's all hard. So, who has more prospects?
The answer given by Banana Holdings Limited, which started with a small sunscreen umbrella, seems to be the latter.
Recently, Banana submitted a prospectus to the Hong Kong Stock Exchange. Starting from the umbrella, Banana successfully sold an umbrella to 200 yuan, becoming the "Hermes of the umbrella industry", and then began to jump out of the umbrella industry and enter the field of sun protection and outdoors. A new destiny under the banana is getting closer and closer – into a larger capital market.
The umbrella is the invention of the Chinese, people's understanding of it, to the source may be Luban, to the dimension of culture, is Xu Xian and the White Lady, with the oil-paper umbrella as the medium of such folklore.
And if you go to the level of the industry, before the banana, it is undoubtedly the nationally famous Hangzhou paradise umbrella and the "world's three umbrellas, one Songxia made" "China Umbrella City" on Yusongxia Town.
Over the past 20 years, the town of Songxia has manufactured more than 600 million umbrellas a year. Compared with the attacking bananas, Songxia's umbrella companies have never drawn a steep upward curve like the bananas - from 2019 to 2021, the revenue under the bananas will be 385 million yuan, 794 million yuan and 2.407 billion yuan, respectively.
But the Songxia people don't seem to want to be bananas yet, and the head of a local umbrella company has the view that "we are still a long-distance runner, and it may be more profitable to be a football player, but we don't want to play football now." ”
This may not have anything to do with aggressiveness, but rather a choice made by the company based on its own judgment.
However, bananas are still a sample of research by Songxia enterprises - how to create a blockbuster, how to make good use of the Internet, eat the dividends of KOLs, community grass planting and live e-commerce, and more importantly, how to make umbrellas produce more possibilities?
These are the problems that Umbrella City has been thinking about in recent years, and they are also the problems that the entire Chinese umbrella industry and even many similar industrial clusters in China are trying to solve.
01 Attack under the banana and the bottleneck of the Chinese umbrella city
In 2013, two polytechnic men, Ma Long and Lin Ze, established Banana Holdings Co., Ltd. in Hangzhou, and launched the first explosive double-layer small black umbrella in the same year.
For the first time, an L.R.C coating that can effectively block more than 99% of ultraviolet rays is used on the umbrella cloth, and this product is called "little black umbrella" due to the black outer layer and the inner color.
The banana leaves are cool, and the name comes from this banana, which has become a small umbrella for girls in the summer in the past few years. Less than 80 kilometers away from Hangzhou, the daughter of Huang Ming, who runs an umbrella company in Shaoxing's Shangyu Songxia Town, also bought one.
The price of umbrellas produced by Huang Ming's factory was between 20 yuan and 50 yuan, and the most famous paradise umbrella in the umbrella industry at that time was priced at only 50 yuan, but the price of the small black umbrella under the banana was set at 200 yuan.
High value + sense of technology, directly raised the price of small black umbrellas, bananas were also ridiculed as the "Hermes" of the sunscreen industry, once known as "IQ tax".
In the same industry, Huang Ming noticed the banana very early, but in 2018, he really felt the growth power of the banana.
In 2018, 618, Banana defeated the well-known domestic brand Paradise Umbrella, and became the champion brand in umbrella sales on the day of 618.
As an old industry, Paradise Umbrella occupies more than 80% of the market share in the domestic umbrella industry, but there are not many innovative actions, and it is difficult to meet the new needs of consumers.
Banana is to seize the expanding sunscreen market, in order to mainly meet the needs of young female consumers for outdoor sunscreen, from the appearance design to function, to make products that are different from paradise umbrellas and even other umbrellas before, opening up brand awareness.
Compared with the success of Banana Xia, Songxia, which is less than 100 kilometers away from Hangzhou, seems to be a bit "lost".
"Three umbrellas in the world, one built in Songxia." In Shaoxing Shangyu Songxia has more than 1,400 umbrella-making enterprises and 18 professional villages in the umbrella industry, with an annual output of more than 600 million finished umbrellas. In 2002, Songxia was known as "China's Umbrella City".
According to Shangyu Daily, the output value of Songxia's umbrella industry will exceed 13 billion yuan in 2021, and its production and sales will increase to more than one-third of the world. However, if we compare the revenue figure of 2.407 billion yuan achieved by the next banana company in 20201, it means that six bananas are worth one Chinese umbrella city.
Sunsha's umbrella making dates back to the 1950s.
At that time, the umbrella industry was a side business. Farmers are busy farming, and when farmers are idle, they go out to repair umbrellas, and their footprints cover more than 20 provinces and cities across the country. In this process, they brought out a group of apprentices, and in order to provide enough umbrellas for the umbrella repairers, Songxia gradually formed a professional market for processing, selling and trafficking umbrellas.
In the 1970s and 1980s, small umbrella factories in the style of family workshops began to appear in Songxia, and Songxia also began to use umbrellas to establish a town.
Once upon a time, Songxia people did not want to buy Songxia umbrellas, they jokingly called locally produced umbrellas "prayer umbrellas" or "garbage umbrellas", meaning that low-grade umbrellas are of poor quality, commonly used in less than a week to change; the price is also cheap, an umbrella sells for 5 yuan to 10 yuan, "9.9 yuan free shipping" is the norm.
In Songxia, the overall profit of umbrella-making is not high, and the average gross profit of low-end umbrellas is about 5%, and 8% is already good. From 2019 to 2021, the gross profit margin under bananas was 50.0%, 57.4% and 59.1%, respectively. From the price point of view, Songxia sold 10 umbrellas is not as good as the banana next umbrella.
In 2009, qianjiang evening news published an article "Why 500 million umbrellas can not support the "Chinese umbrella city"" and ten years later, in 2019, 36Kr had a report entitled "The Ice and Fire Double Heaven of "China's Umbrella City"", which invariably mentioned that Songxia as a typical labor-intensive industry, many small and micro enterprises, industrial homogenization, fierce low-price competition and other issues, has become a "pain point" restricting the high-quality development of Songxia umbrella industry.
And this is also the view of He Yongchang, secretary general of the Shangyu Umbrella Industry Chamber of Commerce.
Now, Banana has completed the triple jump.
In 2016, Banana, which started from a small black umbrella in the sunscreen, opened its first brand direct store in Shanghai.
In 2017, sunscreen products were gradually expanded from umbrellas to other categories such as sleeves, hats, sunscreen clothing, masks and so on.
In 2021, Banana will further expand its category to other non-sunscreen outdoor products such as canvas shoes, Martin boots, thermal clothing and accessories.
According to the prospectus, in 2019, umbrellas were still the largest source of revenue under bananas, with sales of 86.9%, but in the following two years, they have decreased to 46.5% and 20.8%; at the same time, the proportion of clothing revenue has increased by 0.8%, 17.5% and 29.5% year by year, respectively, and has now become the category with the largest contribution to the revenue of bananas, while the proportion of revenue of other products mainly based on shoes has also increased to 5.6% in 2021.
Banana has embarked on a new path.
02 Songxia is in transition, but umbrella companies do not intend to learn bananas
Can't the "Chinese Umbrella City" make a good umbrella?
The answer is clearly no. Science and technology, art, and high-end are becoming the direction of transformation and upgrading of Songxia umbrella enterprises.
Fei Geleer did a survey and found that 87% of the umbrellas on the market could not protect the sun, and 90% of the sunscreen umbrellas could not protect the rain, so she launched a four-color flower sunscreen umbrella, which can both shade the rain and sunscreen.
Zuodu umbrella design set LED lighting, wind and rainproof, safety warning three functions of the umbrella, in the edge of the umbrella added a circle of "angel ring", this has a strong reflective ability of the reflective strip, when encountering light can emit bright light.
Trina rain gear has cooperated with domestic universities to develop nano fabrics, and the umbrella surface is almost not wet, which is very convenient to carry and store.
The main category of Tianwei umbrella industry is the craft cultural and creative umbrella. For example, a Lanting set of umbrellas, the surface of the umbrella is full of calligrapher Wang Xizhi waving pen and ink. Its umbrella handle is said to be made from bamboo roots dug up at the foot of Shaoxing Dongshan; an umbrella with a plain chematu, the fabric comes from Japan, and the loom that produces this type of cloth can only weave 10 meters per day, so the fabric is rare and precious. And its umbrella surface is covered with oracle bones, and the pattern is carried by a special jacquard machine.
He Yongchang, secretary general of the Shangyu Umbrella Industry Chamber of Commerce, also has concerns, umbrellas are still daily necessities after all, blindly emphasizing cultural added value, will it be counterproductive? Moreover, the current stage of the umbrella-making process is not up to the standard of collection, "how many people are willing to spend thousands of dollars to buy an umbrella that is unlikely to be taken out of the house on a rainy day?" ”
But from the government level, the combination of cultural creativity and umbrellas is very meaningful.
For example, the integration of local cultural elements such as filial piety, Chunhui, celadon and Dongshan into the design can not only significantly enhance the added value of products and brand recognition, but also become an opportunity to promote local culture.
The transformation of Umbrella City bears the dream of "secondary entrepreneurship" in Songxia.
In addition to setting up an industrial support and development fund, the local government of Songxia has also built a collaborative innovation center for umbrella art industry engineers, and the umbrella art town in Songxia has also been successfully included in the list of the sixth batch of provincial characteristic towns in Zhejiang Province.
To this end, Songxia also specially invited Cao Xue, the head of the design team of "Ice Dundun" and the dean of the School of Visual Art and Design of Guangzhou Academy of Fine Arts, to perform the visual image design of Songxia regional brands "China Umbrella City" and "Umbrella Art Town".
Songxia hopes to leverage the brand advantages of "China Umbrella City", umbrella art town to "umbrella industry quality improvement" as the core, promote the digital transformation of umbrella industry, combine umbrella making with culture and art, integrate "intelligence, trade, tourism, residence" and other functions, and build a "global umbrella industry intelligent manufacturing center, global umbrella industry cultural and creative center, global umbrella tourism destination".
Although part of the regional economy, companies may not be able to consider such a grand proposition.
"Thinking about how to increase the added value of your brand." In the view of Lu Gangfeng, the person in charge of Concubine Glaer, the transformation is forced. On the one hand, the price of raw materials at the supply chain end has risen, followed by the serious homogenization of products of enterprises in Umbrella City for a long time, and it has been in the low-level stage of fighting for prices.
But for Lü Gangfeng, the success under the banana does not have much reference significance. "They are all going to the high-end market, high gross profit, high sense of design, high added value." However, most of the enterprises in Umbrella City are factory-type, not brand-type, focusing on the middle and lower-class markets. ”
Lu Gangfeng also wants to be a brand, but he does not agree with the marketing method under the banana.
"Although the gross profit under the banana is high, the net profit is not high." From 2019 to 2021, the adjusted net profit of non-IFRS under bananas was 19.68 million yuan, 39.412 million yuan and 136 million yuan, respectively, and the net profit margin was only about 5%.
The reason for this is that Banana spent nearly 600 million yuan on advertising investment in 2021, which is a quarter of the company's annual revenue. In contrast, its research and development cost is only 71.6 million yuan, accounting for 3% of the total revenue.
In China's umbrella city of Songxia, Fei Glair's revenue scale is in the top 10 ranks, but even so, such a radical marketing investment as bananas, the vast majority of Songxia umbrella companies are afraid to think, and on the other hand, Lu Gangfeng's concern is that many new consumer brands often lack follow-up after spending money to create explosive models.
In recent years, thanks to the e-commerce dividend, the profits of some Songxia umbrella enterprises have been greatly improved. For example, Fei Glaire, the gross profit margin is about 30%, and the net profit has been able to reach 21%.
Like most umbrella city companies, "we don't have the insight into the trend, the ability to jump out of the umbrella itself, and besides, there is nothing wrong with focusing on the umbrella." Lu Gangfeng said.
But Concubine Glaaire still learned the key thing from the banana, that is, to reposition her target group.
The new direction of The Concubine Greile is the student body. This group is still mainly economical and practical, but it also attaches importance to the beauty of umbrella accessories and the implantation of IP. This is the direction that Concubine Glear is working towards.
Overall, the enterprises in Umbrella City are still in a stage of upward climbing.
Not only is it "Umbrella City", there are many traditional manufacturing "sections" in the Yangtze River Delta, which have long been "world factory-level" in terms of output and market share, and they have encountered development bottlenecks early as Songxia Umbrella, and in recent years, they have also been making breakthroughs in transformation, but imagination still seems to lack a little.
The story of the Songxia umbrella is also the story of lighters, pearls, socks, glasses, clothing fabrics and other products in the Yangtze River Delta.
In Danyang, Jiangsu, this land with less than one million permanent residents and only more than 1,000 square kilometers, there are more than 1,600 glasses-related enterprises and more than 50,000 employees. Official data show that Danyang has an annual output of 100 million pairs of frames and 400 million pairs of lenses, of which lenses account for 70% of the total national production and 50% of the world's total, making it the world's largest lens production base.
That is to say, in the world, one pair of glasses worn by every two people is from Danyang.
For a long time, Danyang has served as a factory workshop for world-renowned eyewear brands, but with the opening of glasses wholesale markets throughout the country, as well as the convenience and speed of Internet e-commerce, various waves of impact, especially at the moment of the epidemic, so that Danyang's glasses companies have felt the pressure to survive.
Until last year, as the "pride of the whole village", the local Mingyue lens successfully landed on the GEM, which was a breakthrough of zero.
In fact, the umbrellas under the banana are also produced by a local enterprise called Zhejiang Tianwei Rain Gear Co., Ltd. in Songxia.
03 What are the possibilities of an umbrella?
Internet celebrity Handmade Geng also once had the invention of an umbrella, he made a consideration for the couple to travel on rainy days, designed an automatic rotating umbrella, so that the umbrella uses centrifugal force to shake off the rainwater, so that the water will not fall on the shoulders.
Although this is a trademark useless invention of Hand Geng, from another point of view, China's umbrella industry does need more imagination.
The imagination of science and technology has always been the goal of the umbrella industry.
The technology mentioned here is not the functional increase of lighting or even electric fans, which are added to the umbrella, but the new technologies such as sunscreen small black umbrellas, waterproof, non-absorbent, and fast-drying rain nanomaterials.
But more imagination should be jumping out of the umbrella itself.
A few years ago, the shared umbrella was on fire for a while, and the umbrella threw out a new application scenario, but the use function remained unchanged.
Banana under the offer of a new idea for development.
Much like lululemon, Banana has established a new category where it can be number one. Lululemon chose a narrow field of yoga industry from the competition in sportswear, creating a new trend of autumn pants to wear, selling yoga pants for an average price of 1,000 yuan.
Bananas broke the traditional concept that umbrellas are only used to block the rain, grasped the needs of contemporary people's sun protection, and successfully increased the price of umbrellas to nearly 200 yuan, which is four times the price of similar paradise umbrellas. After that, Banana and Lululemon are also a single product that quickly promotes more categories after successfully out of the circle.
The enlightenment for China's umbrella city and umbrella industry is how the umbrella can still jump out of the umbrella itself.
Maybe there's a more powerful jump.
China is the world's largest umbrella manufacturer, accounting for one-third of the world's annual output, but in the high-end umbrella market, Made in China is completely absent.
If you carefully understand the high-end of the umbrella, you will find that it ultimately points to more than just the umbrella.
The UK has the largest number of top umbrella brands, ranging from james Smith & Son, the oldest company, to Fox Umbrellas, which invented the steel skeleton umbrella, but the most successful is Thomas Brigg & Sons, founded in 1836.
British Prime Minister Neville Chamberlain often carries a Brigg umbrella with him when he travels, which Life magazine calls a "comforting umbrella" for regulating peace. Not only did Prince Charles and his children take it wherever they went, but David, a fashion columnist for the British Daily Mail, also included it in the book "101 Things Not to Buy Dead, Not Blind".
The hero and heroine of "Song in the Rain" dance in the rain with this umbrella; the Japanese drama "My Gentleman Fashion" introduces that when the umbrella is opened, it will hear a sound like stepping on the first snow; in the "Ace Agent" series of movies, the Brigg umbrella also frequently appears in the hands of Agent Colin Firth, as a model of gentleman's dressing, he said a classic sentence in the play: Reason can become an adult, and behavior creates character.
The umbrella is an indispensable part of British life and has become a symbol of the traditional British way of life, not only a daily necessity, but also a stylish ornament.
Some people say that China is not Britain after all, umbrellas are still daily necessities after all, and functionality is the mainstream in the field of consumption.
But with the post-90s, 00s and Gen Z on the stage, consumer trends are escalating. Consumption power upgrade, the improvement of income level will inevitably lead to the emergence of functional products innovation, superimposed more added value; the upgrade of consumer awareness, the Z generation of people for consumer goods mental cognition is richer and more diverse, an umbrella is not just an umbrella, but an important accessory for young people, becoming a fashion single product and social currency; brand value upgrade, before people bought umbrellas, bought products, and now young consumers pay more attention to brand value.
On the basis of the umbrella's functionality, more imagination will continue to emerge. (This article was first published on the Titanium Media APP)