#精品长文创作季#
Author: Xiao Li Feidao, Editor: Xiao Shimei
In 2017, Zhao Yan did everything she could to privatize and delist Bloomage, which only gave Hong Kong stocks to a market value of 5 billion. Two years later, Bloomage switched to the Science and Technology Innovation Board and was continuously sought after by the market, with a market value of 150 billion at its peak in 2021. But in just 3 years, its stock price has been beaten back to its original shape, and the latest market value is only 26 billion.
Behind the roller coaster of market capitalization is the truest portrayal of Zhao Yan at the helm of Bloomage.
【Super Waterloo】
58-year-old Zhao Yan will rank 93rd on China's Hurun Report in 2022 with a net worth of 49.5 billion.
In addition to real estate and investment, Zhao Yan's most important business territory is medical aesthetics - Bloomage Biotech occupies 44% of the global market share of hyaluronic acid.
But she is not reconciled that Huaxi is just a hyaluronic acid raw material factory. In 2018, Zhao Yan decided to enter the skincare market. She took the lead in promoting Runbaiyan, which enjoys market reputation on the B-side, from the hospital side to the mass market, and began to lay out e-commerce channels.
Subsequently, Zhao Yan made a big move and found Fan Bingbing, a hot star at the time. On Xiaohongshu, Fan Bingbing's Runbaiyan hyaluronic acid secondary discarding stock solution began to explode, and with the residual heat, Bloomage took advantage of the situation to find hundreds of KOLs and KOCs to plant grass for its marketing, improve the volume of public opinion, and seize the minds of consumers.
In 2019, Zhao Yan keenly captured the big outlet of live streaming and found Wei Ya to cooperate. It is reported that Wei Ya contributed 40% of Runbaiyan's sales that year. When others are still waiting and exploring, Run Baiyan has 548 live broadcasts throughout the year, with annual sales of up to 340 million.
With the experience of Runbaiyan, Bloomage launched three other sub-brands at the same time - Quadi, Medrepair and Muscle Active. Among them, Quadi's operation routine is similar to that of Run Baiyan, binding the big anchor Li Jiaqi and achieving good results.
In the past few years, Bloomage's skin care products business has performed quite well, accounting for a significant increase in the proportion of total revenue from 23% in 2018 to 72.5% in 2022, becoming a well-deserved leader of Bloomage. The rise of this business has also led to a significant increase in Bloomage's overall revenue and profit attributable to the parent company, with a compound annual growth rate of 51% and 34%.
During the period of high performance, Zhao Yan once again pushed Bloomage to the capital market, this time choosing the Science and Technology Innovation Board of the Shanghai Stock Exchange. On November 6, 2019, Bloomage's share price rose 78% on the first day of listing, with a market value of 40.8 billion. With the popularity of the capital market, Zhao Yan, who holds a market value of 24.1 billion, surpassed Chen Wenyuan and Zhang Qian in one fell swoop and became the richest man on the Science and Technology Innovation Board.
Walking into the public eye, people gave this rich woman the nickname "Queen of Hyaluronic Acid". Zhao Yan also ushered in the highlight moment of her life, perhaps the most satisfying thing for her is that Bloomage is no longer a medical beauty company in the eyes of the capital market, but a biotechnology company in her heart.
Good times are always short-lived. Since the second half of 2021, Zhao Yan has encountered a lot of headwinds.
In October of that year, Run Baiyan chose the controversial male anchor Sun Xiaochuan to do the promotion, and played the promotional copy of "Let the earth dog become a 'water dog'". This move was criticized by many netizens for "disrespecting consumers and women". Runbaiyan, which relies on Internet celebrity marketing, tasted the consequences of traffic backlash for the first time.
In January 2022, Li Huiliang, deputy general manager and chief technology officer of Bloomage, resigned, and later switched to its competitor Huaxizi as chief scientist. Two months before his departure, Jin Yong, chairman of the board of supervisors, submitted his resignation. Earlier, Jiang Rui, deputy general manager and secretary of the board of directors, also chose to leave Bloomage. Zhao Yan has repeatedly emphasized the importance of talents, but Bloomage is facing the risk of losing core talents.
In 2023, Bloomage will step on the brakes sharply, and its performance will be super Waterloo. In the first half of 2023, revenue edged up by 4.8%, far less than the doubling in 2021. Net profit attributable to the parent company fell by more than 10% year-on-year. According to the annual performance forecast, revenue showed negative growth for the first time since listing, and profits fell sharply by 40%. The four major skincare brands all experienced varying degrees of decline - Runbaiyan -2%, Quadi -10%, Medrepair -16.8%, and BM Muscle Active -29.6%.
Bloomage's profitability has also continued to deteriorate, with gross profit margin falling from a high of 81% to 73% today, and net profit margin falling from a maximum of 36.8% to 12% today.
▲华熙经营利润率历年表现,来源:Chocie
Financial performance Waterloo, the capital market voted with its feet, Bloomage's share price fell sharply by more than 80% compared with July 2021, and Zhao Yan's wealth shrank by 70 billion.
【Blindfolded Run】
Zhao Yan, who has rich entrepreneurial experience, knows that the logic of 2B and 2C business is different, the latter is closer to consumers and needs to burn money for marketing.
On the one hand, Bloomage cooperates with head anchors and influencers to promote and bring goods. On the other hand, there is a crazy advertising bombardment on social platforms such as Douyin, Xiaohongshu, and Weibo. Advertising costs money, and Bloomage's sales expense ratio has soared from more than 20% to 48% in 2022.
But unfortunately, a large amount of Bloomage's marketing expenses have entered the hands of the platform or live broadcast, and it may not have accumulated or precipitated much brand equity.
For consumers, in addition to focusing on ingredients and efficacy, they also value emotional connection and identity. Overseas cosmetics giants are especially well aware of this, and have continued to tell stories to consumers for many years, achieving a long-lasting brand legend. For example, Lancôme is bound to French roses, and the brand concept fulfills the promise of beauty for women all over the world, giving people a sense of elegance and beauty. La Mer's products bind noble ladies and give people a sense of noble identity.
It is a pity that Zhao Yan did not focus on building a brand personality and failed to lead Bloomage to stand firm in the high-end market.
Of course, Zhao Yan also has her own strategic thinking and long-term vision when running a business. When we started to select products that would focus on the market, we decided to launch four sub-brands at the same time in order to prevent the risk of relying on a single product in the future.
Runbaiyan positioning hyaluronic acid skin care, Quadi positioning anti-aging, Mirepair positioning sensitive skin, muscle activity positioning active substance effect skin care. These sub-brands with different positioning can cut into different segments of the market and carve up the market, but in the future, the business problems of multi-brand strategy will become more and more prominent.
Although Bloomage's different products have given different positions, the core is somewhat similar. For example, Biohyalux focuses on hyaluronic acid skin care, and Quadi's main ingredient is also hyaluronic acid, but it is a combination of 5 kinds of hyaluronic acid. This makes it difficult for consumers to establish a differentiated brand awareness. Secondly, many competing products have the concept of hyaluronic acid, and this raw material selling point alone cannot establish business barriers.
The four sub-brands of Bloomage have developed in a balanced manner, but their promotion resources are limited, so they cannot concentrate on creating super large single products, and some of them distract consumers, allowing competing products to take advantage of them. On the other hand, Proya, which continues to be hot, practices the single-brand strategy, has a deep insight into the pain points of consumers, and cuts into the high-end anti-aging field by creating "morning A and evening C", gaining a firm foothold in the market, and successfully switching the product grade from low-end to mid-to-high-end, and finally establishing the status of the "king of cosmetics" of domestic products.
In terms of channel construction, Zhao Yan also missed the strategic opportunity period, and did not increase the proportion of sales of its own channels on a large scale like Proya.
In the rapid rise of live broadcasting, brand self-broadcasting is becoming more and more important. On the one hand, self-broadcasting can reduce the dependence on the head anchor, and there are no more middlemen to make the difference, which can really reduce sales expenses. On the other hand, enterprises grasp the initiative and hold the sales power in their own hands, enhance brand competitiveness, and facilitate their long-term development.
Proya, which is helmed by Fang Yuyou, has long been aware of the importance of its own channel construction. Whether it is Tmall, Jingdong e-commerce platform, or short video platforms such as Douyin and Xiaohongshu, they are trying to find ways to pinch more sales channels in their own hands. In the first three quarters of 2022, 61% of Proya's Douyin sales composition came from brand self-broadcasting, much higher than the 36% of Runbaiyan.
Zhao Yan's movements were still too slow. After the performance stalled, the solution was given: increase the proportion of its own channels and optimize the channel structure.
The skincare business made money too fast, running blindfolded, Zhao Yan neglected to build a fence and lay a foundation, and did not do well enough in terms of brands, products, and channels, which finally triggered Bloomage's Waterloo in 2023.
[Two major choices]
In the course of more than 30 years of entrepreneurship, Zhao Yan has faced two major choices, each of which has had a profound impact.
In 1989, Zhao Yan went south to Hainan to pan for gold, and earned the first pot of gold in his life by pouring refrigerators and opening garment factories. A few years later, Zhao Yan went north to seek new opportunities, and made a fortune in the field of real estate and investment, which made the total assets of Bloomage Group soar to 80 billion yuan.
Around 2000, when Zhao Yan was studying EMBA at Peking University, she met Dr. Guo Xueping, a disciple of Ling Peixue, a leader in hyaluronic acid, and a student of Freda Biochemical Engineering.
At that time, Freda, which was helmed by Ling Peixue, was in a hurry to industrialize, and even transferred technology and team, but neglected the production of raw materials, which eventually caused the company to fall into a huge loss. To this end, Freda needs new investors to take over.
Faced with an industry that had no prospects at the time, Zhao Yan did not hesitate at all and decided to take 50% of the equity at a price of 1.5 times her net assets. At that time, it seemed that many people thought Zhao Yan was quite "stupid". But this important choice has brought tens of billions of returns.
After Zhao Yan took over, she was not in a hurry to make money, paid attention to investing in talents and technology, recruited professional managers to lay the foundation, and solved three core problems - quality management system, modern enterprise organizational structure, and talent learning and training. Later, the business was on the right track, with a revenue of 20 million yuan in 2003 and became the world's largest hyaluronic acid company in 2005.
Zhao Yan's ambition did not stop there, and in the following years, she continued to extend her business to the midstream and downstream, vowing to become a great enterprise with industrial integration around hyaluronic acid.
In 2018, the development of Bloomage Biotech faced a crossroads, and Zhao Yan once again faced a major choice. The first is to continue to focus on the B-end business in the middle and upper reaches of the company, and to fight to the end with Aimeike, and the second is to focus on the development of the downstream C-end skin care business, and compete head-on with many cosmetics companies at home and abroad.
In the face of the hundreds of billions of skin care products market, Zhao Yan also did not hesitate and decided to bet on the latter choice, that is, heavy C and light B.
In the fiercely competitive C-end business, Zhao Yan may have inadvertently given up the original intention of the business when she first took over Freda - not in a hurry to make money, but to lay a solid foundation first. In turn, this time it's about throwing money at it first.
In the B-end medical terminal business, Zhao Yan may not have more energy to invest, resulting in a significant gap between Bloomage and Aimeike.
In 2017, in terms of sales, Aimeike accounted for 7% of the country's share, and Bloomage accounted for 5.4%, with a small gap between the two. After 2018, Bloomage's market share has almost stagnated, while Aimeike's market share has continued to rise, reaching 21.3% by 2021.
After several years of rapid development, there is such a major opportunity for the B-end medical terminal business, which may not have been expected by Zhao Yan when she made the decision at the beginning. In hindsight, the market value, profitability, and performance of Aimeike, which focuses on the B-side, crushed Bloomage. Looking at the industry, the size of the medical aesthetic market will be as high as 190 billion in 2021, and the compound growth rate is expected to be as high as 14.5% from 2021 to 2030. The industry is booming, and the technology, qualification and other business barriers are higher than the C-end, once the competitive advantage is established, the winner can take it all.
▲ Aimeike VS Bloomage Biotech net profit margin performance, source: iFinD
If Zhao Yan had chosen to focus on the B-end business, would there be Bloomage's current embarrassing situation?
Focusing on the present, Zhao Yan is facing real business challenges.
In the C-end business, which is the core of the business, due to macro factors such as weak consumption, the growth rate of the industry has slowed down significantly, and the competition has become fierce. And in the past few years, Proya, which has taken advantage of the wave of domestic substitution to stand in the middle and high-end, has shown stronger and stronger competitiveness, which is obviously not a good thing for Bloomage.
However, Bloomage's own brand, products, and channel construction have some deficiencies, and it may have missed the golden period of the best foundation. If you miss it and fall behind, it will be difficult to keep up with Proya's rhythm in the future.
Over the past 30 years, from Hainan to Beijing, Zhao Yan has brought many stories to the business world in real estate, investment, and hyaluronic acid. Especially in the unfamiliar field of hyaluronic acid, he dared to bet heavily on the first choice, upgraded the business map, and brought tens of billions of wealth.
But Zhao Yan is not a god. Judging from the current growth dilemma faced by Bloomage, her subsequent major choice may not be the best solution. If she wants Bloomage to return to the top, Zhao Yan must make another choice that can bring about qualitative change and redouble her efforts.
disclaimer
The content of this article related to listed companies is the author's personal analysis and judgment based on the information publicly disclosed by listed companies in accordance with their legal obligations (including but not limited to temporary announcements, periodic reports and official interactive platforms, etc.), and the information or opinions in this article do not constitute any investment or other business advice, and Market Value Watch does not assume any responsibility for any actions arising from the adoption of this article.
——END——