In a Chenguang stationery store in Xincheng International, Chaoyang District, Beijing, in order to save space, the shelves in the store are densely placed, and only one adult can pass sideways. Although the location of this store is not easy to find in the corner of the third floor of the office building, people still come to buy stationery and office supplies.
According to the clerk, the current customers of the store are mainly office buildings and surrounding residents, and business has been bleak during the epidemic, and since 2023, the business of student stationery and office supplies in the store has picked up, and the sales have also exceeded the same period in 2019, but the growth is limited.
The first financial reporter recently combed through listed companies and field visits and learned that affected by the epidemic, the overall development of the stationery industry from 2020 to 2022 has slowed down, but benefiting from the promotion of policy dividends, the outbreak of office direct procurement business has still driven the continuous growth of the performance of listed stationery companies. In 2023, the stationery market will begin to recover slowly, but the declining gross profit margin of office direct procurement and the rapid decline in the birth population in the past two years will still make the stationery market still have hidden worries.
The epidemic is slowly recovering after the "throes".
A Chenguang stationery store in Wudaokou, Beijing, is located in a gathering area of colleges and universities, primary and secondary schools, but the boss Zang Jiancai told the first financial reporter that his store has been transformed many times, the first to do photography, and then the transformation of stationery for nearly 10 years, the first few years of business was relatively stable, but the business was significantly affected during the epidemic. Although the school business has returned after the epidemic has ended this year, the growth rate has not been fast.
In Zang Jiancai's view, the performance growth rate is not fast, on the one hand, consumers are more cautious in their purchasing behavior; on the other hand, in the early years, the stationery business was OK, and the entry threshold was low, so it attracted many entrants, supermarkets, convenience stores and even hardware stores, commissaries have increased stationery sales, and also diverted a lot of business. Moreover, after the epidemic, a small number of consumers have switched to buying stationery online, and the overall competition in the market has intensified.
Recently, the first financial reporter learned in a field visit that the situation of many stationery stores or stationery stores in 2023 will be better than the previous two years, and in 2023, with the return to normal of semesters and extracurricular training, stationery consumption will also be driven, but the growth rate will slow down.
In the view of practitioners, another reason for the slow recovery of the stationery market is also related to the "Opinions on Further Reducing the Burden of Homework and Extracurricular Training for Students in the Compulsory Education Stage" issued by the relevant state departments in July 2021.
According to the data of the China Pen Association, in 2019, the main business income of enterprises above designated size in the pen industry was 16.4 billion yuan, a year-on-year decrease of 1%, but by 2020, 212 enterprises above designated size in the pen industry achieved main business income of 14.5 billion yuan, a year-on-year decrease of 11%;In 2021, due to the double impact of the epidemic and double reduction, 217 enterprises above designated size in the domestic pen industry achieved main business income of 15 billion yuan, a year-on-year increase of 1% in the case of a low base in the previous year, and it is still running at a low level.
According to the data of the China Pen Association in 2023, in January ~ November 2023, 245 enterprises above designated size of the Pen Association achieved operating income of 13.6 billion, a year-on-year increase of 2.9%.
It is also reflected in the performance of listed companies.
Chenguang Co., Ltd. (603899. SH) financial report shows that in 2019, the revenue of Chenguang's writing instruments was 2.19 billion yuan, a year-on-year increase of 12.3%, and the income of student stationery was 2.65 billion yuan, a year-on-year increase of 42.4%, but in 2020, the growth rates of both declined by 4.3% and 2.3% respectively. In 2022, the impact of the epidemic and the double reduction will be more obvious, especially in the second half of the year, affected by factors such as the abnormal opening of schools across the country and online classes, the stationery market demand will weaken. Chenguang's traditional core business revenue was 8.49 billion yuan, a year-on-year decrease of 4%, and the revenue of writing instruments was 2.17 billion yuan, a year-on-year decrease of 23.1%.
For the whole year of 2023, Chenguang Co., Ltd. achieved revenue of 23.35 billion yuan, a year-on-year increase of 16.8%, and a net profit attributable to the parent company of 1.53 billion yuan, a year-on-year increase of 19.1%, of which the writing instruments and student stationery business resumed growth, with revenue of 2.27 billion yuan and 3.47 billion yuan, respectively, a year-on-year increase of 4.8% and 8.6%.
During the visit, a number of interviewed parents said that in terms of stationery consumption in 2023, although there are no subject training courses, under the pressure of the elimination of the high school entrance examination and the college entrance examination, parents have increased the intensity of family learning; Therefore, from 2023 onwards, some stationery spending will be appropriately increased, but the increase is not large.
In 2015, the number of primary school students in Beijing was about 850,000, and in 2023, this number will increase to about 1.08 million. Although the number of births has decreased in recent years, these newborns have not yet reached school age, and there is no impact on the stationery market.
With the recovery of the overall market, the involution of the industry is also rapidly intensifying.
Huang Changchao, president of the Yiwu Stationery Industry Association, who has been working in the stationery industry for many years, told the first financial reporter, "In fact, the entire domestic sales in 2023 will still be a bit involuted, especially for traditional stationery product enterprises." ”
Huang Ping is a post-80s entrepreneur, since 2000, he has been in the stationery industry, the company is good at stationery design and development. Huang Ping told the first financial reporter that relatively speaking, now the "price war" as the dimension of enterprises, life is quite difficult, last year's sales of good companies did maintain the entire basic market, many or sales declined. Although some companies claim that their products are "cost-effective", relatively speaking, there are still some "extremely cost-effective" companies, that is, the same quality and function, they have indeed achieved large-scale production, and their own quality has not declined, and they continue to optimize in cost control.
The first financial reporter noticed that under the fierce competition in the C-end business and the difficulty of doing retail business, many head stationery companies seem to have increased their overall performance, mainly relying on the B-end business.
From Chenguang Co., Ltd., Qixin Group (002301. SZ), Guangbo Co., Ltd. (002103. SZ) and other mainstream stationery listed companies, in recent years, the performance of stationery companies has maintained a certain growth. In the three years of the epidemic, Chenguang's revenue increased by 17.9%, 34% and 13.6% respectively, and its revenue increased by 16.8% in 2023. From a structural point of view, a considerable part of its revenue growth is driven by office direct sales business, benefiting from the state's policy of encouraging centralized procurement.
According to Chenguang's 2023 annual report, the operating income of the office stationery business was 3.51 billion yuan, a year-on-year increase of 8.9%, and the revenue of office direct sales was 13.31 billion yuan, a year-on-year increase of 21.8%. Chenguang's office direct sales business is mainly undertaken by Chenguang Kelip, which mainly covers office supplies, office consumables, office equipment, IT digital, office furniture, labor protection supplies, food and beverages, business gifts, etc.
Almost all of the company's revenue and net profit depend on the B2B office supplies business. According to the 2023 semi-annual report, the company's B2B office supplies and branded new stationery accounted for 99.02% of the company's total revenue.
According to the latest financial report of Guangbo Co., Ltd., in 2023, its cultural, educational and office supplies business will achieve a total operating income of 2.52 billion yuan, an increase of 30.2% year-on-year, of which the revenue of office direct sales will reach 1.64 billion yuan, an increase of 6% year-on-year, accounting for 61.1% of the total revenue. In 2020, office direct sales revenue accounted for only 11.2% of Guangbo's revenue.
It's worth noting that office direct sales also bring higher accounts receivable. In 2022, Chenguang's accounts receivable will be 2.96 billion yuan, a year-on-year increase of 71.81%, which is mainly due to the increase in Kelip's accounts receivable, and in 2023, the accounts receivable will increase to 3.66 billion yuan, and the credit impairment loss of accounts receivable will be 69.052 million yuan that year.
Moreover, although office direct sales are booming, the gross profit margin is at a low level, and there is a trend of declining year by year.
In 2023, the gross profit margin of Chenguang's office direct sales will be 7.2%, far lower than the gross profit margin of 27% to 44% for other businesses. In recent years, the gross profit margin of Chenguang's office direct sales has also declined as a whole, and the gross profit margin of the above business was 13.1% in the same period of 2019. The gross profit margin of Guangbo's office direct sales business also decreased from 4.5% in 2022 to 4.2% in 2023.
For the decline in the gross profit margin of the office direct sales business, at the performance meeting, the management of Chenguang Co., Ltd. believed that the decline in the gross profit margin of the Kelip business (office direct procurement) was mainly due to the proportion of the business structure, which was due to the increase in the proportion of local suppliers, resulting in the decline in gross profit margin.
New challenges are yet to comeThe research report shows that China's stationery consumer market is mainly composed of 300 million students C-end market and office B-end market, with the gradual decline of the new birth population in recent years, although the current newborn has not reached school age, but the stationery industry will face a greater challenge after a few years - the further reduction of the number of students in school.
Stationery companies are taking a series of countermeasures.
On the one hand, stationery companies have begun to transform in the direction of cultural creativity and high-end.
Chenguang's financial report also mentioned that with the change of domestic demographic structure and the decline in the birth rate, the contribution of traditional core business to revenue by sales volume growth has weakened, and revenue growth will come more from consumption upgrading and product upgrading.
According to Euromonitor data, in 2022, the per capita consumption and consumption of writing instruments in the United States and Japan will be $12/25.2 and $6.2/10.9, while the mainland will be $2.5/8.6, and there is a lot of room for improvement in consumption and consumption. In the future, the growth of the stationery industry is expected to shift from the growth of volume brought about by the increase in penetration rate to the increase in price brought about by the increase in added value.
Chenguang said that the traditional core business is facing the challenge of changing the personalized needs of the post-90s and post-00s, which promotes the change of demand for new products. Domestic stationery consumption shows a trend of branding, creativity, personalization and high-end, and the demand for high-quality cultural and creative products is further highlighted, promoting the upgrading and transformation from stationery to cultural and creative life.
In addition, Chenguang has also launched a large retail store business, including two business forms, Chenguang Life Museum and Jiumu Sundries Society, trying to transform from stationery to cultural and creative life. In 2023, Chenguang Life Hall (including Jiumu Sundries Club) will achieve an operating income of 1.34 billion yuan, a year-on-year increase of 51%, of which Jiumu Sundries Club will achieve an operating income of 1.24 billion yuan, a year-on-year increase of 52%, and a net profit of 25.72 million yuan, which is not a high contribution to the overall business.
During the visit, the reporter found that these innovative and cultural and creative products accounted for an increasing proportion of stationery stores, and most of them were displayed in conspicuous positions. Some of these products attract students to buy through co-branding, well-known IP licensing, such as Ultraman, Naruto and other IPs, and the price is higher than that of traditional products. For example, the price of an IP co-branded gel pen mostly ranges from 6 yuan to 10 yuan per piece, and most of such conventional products are around 2 yuan to 3 yuan per piece.
Qixin Group also told the first financial reporter that in the future, the company will continue to improve its channel construction capabilities, product research and development capabilities, and service capabilities, and continue to create high-quality cultural and creative products with high-quality IP to enhance the added value of products.
Huang Ping told the first financial reporter that he also went to some companies in Hangzhou to visit and found that they are also laying out the "upward" market, "stationery and daily necessities are connected to the channel, in addition to their own stationery products, they also made some daily necessities, snacks, etc., using IP empowerment." ”
Huang Changchao believes that some of the leading and specialized new enterprises that produce high-value and high-quality products as a whole can continue to stabilize the market in domestic sales. "Now the post-00s and post-90s are becoming the main force of stationery consumption, and the stationery products that can arouse their emotional resonance will have greater market value. ”
However, the cultural and creative stationery has also triggered a round of doubts on social media. On social platforms, some consumers questioned the inflated prices of cultural and creative stationery products, which belonged to stationery assassins, and some consumers thought that overly fancy packaging could also distract students.
However, from the perspective of the industry, accelerating product and technological innovation and taking the high value-added route is still a way out for the stationery industry to break through.
On the eve of the start of school in the fall of 2023, JD.com released the "2023 Stationery New Consumption Observation", which shows that 6% of parents pay more attention to brand and practical functionality when buying stationery. With the progress of modern science and technology and social changes, the sales of new stationery such as computers, acrylic markers, science experiment sets, time managers, and electric pencil sharpeners are becoming new hot spots in the stationery market, and 80% of the parents surveyed will also buy new stationery.
Liu Shifeng, associate professor of the Business School of Ningbo Institute of Technology, Zhejiang University, said at the previous Ningbo Stationery Industry Association Forum that in 2022, China's stationery sales revenue will be 166.88 billion yuan, a year-on-year increase of 3.49%. He suggested that stationery companies should seek new development in the development of interactive and intelligent stationery and cross-border integration.
New opportunities in overseas markets
Under the involution, many stationery companies began to look for business opportunities in overseas markets. According to China Customs statistics, from January to December 2023, the cumulative export value of cultural, educational and office supplies in mainland China was 38.93 billion US dollars, a year-on-year increase of 5.5%, which is the third consecutive year of growth since the sharp decline in 2020, reaching the highest level in the past five years.
On April 19, Chuangyuan Co., Ltd. (300703. SZ) released its 2023 annual report, achieving operating income of 1.36 billion yuan, a year-on-year increase of 3%, and a net profit of 76.74 million yuan, a year-on-year increase of 2.4%. Among them, the revenue of the core North American market was 1.16 billion yuan, basically flat, while the business in Europe, Asia (excluding the Chinese market) and South America increased by 38.3%, 80.4% and 93.9% respectively.
Huang Changchao also revealed that his company's performance last year saw a growth of 30% to 40%, mainly due to the pull of the foreign trade market, "Our products are sold to Thailand, Malaysia, Singapore, the Philippines and other markets." ”
The wind and grass in China's stationery market are turbulent, and Huang Ping has a more acute response. At the beginning of 2023, the impact of the epidemic gradually dissipated, "We decisively followed the leading enterprises in the industry, actively participated in the promotion of the brand overseas plan, and with the help of everyone's export potential, the company expanded its global customers, which is the main reason for the growth of performance in 2023." Huang Ping said.
In 2023, Huang Ping's company will focus on the Southeast Asian market, and he and his colleagues visited Indonesia, Malaysia, Thailand and other places to conduct a thorough survey of the local cultural market environment and customer preferences.
"After we inspected these areas, we quickly made some changes in product research and development. Huang Ping said that Southeast Asian countries are rich in fruits, and the company has developed stationery products about fruit elements, such as durian and avocado type refills.
"This year's market environment is generally challenging, in the medium and long term, the international market expansion has increased, and the company is confident that it will continue to improve its competitiveness in the medium and long term. At the investor exchange meeting a few months ago, Bai Kai, secretary of the board of directors of Chenguang Stationery, did not forget to boost the confidence of the market.
Qixin Group responded to the first financial reporter that its brand products are sold to more than 100 countries and regions overseas, in addition to offline channels, but also through Amazon, Wal-Mart, Shopee, Lazada and other cross-border e-commerce platforms for sales, hot categories include stationery, comprehensive stationery, office equipment, etc.
Although the products of Chinese stationery companies have been able to go overseas, the brand influence of our customers in overseas markets is not strong. In the view of the interviewed enterprises, most domestic stationery companies are making product "wedding dresses" overseas, and there is not much output of brand value, and these are precisely the difficulties that must be overcome for the high-quality development of China's stationery industry.
Huang Ping was impressed by the fact that a supermarket chain in the Indonesian market is doing very well and is quite influential in the local retail industry. After Huang Ping's inspection, he found that there are stationery brands from Japan, Europe and other places in this supermarket, and the display of goods is also very good, but the stationery products from China are displayed here very scattered, which can not highlight their own brand image, and customers have no brand awareness of Chinese products.
Huang Ping believes that this is the shortcoming of Chinese stationery companies in the export of overseas brands. "This is the direction we can work towards and expand in the future. Huang Ping said that he immediately held consultations with the chain, and the two sides intend to display and display the company's stationery products in the chain's main and central stores starting in 2024.
Qixin Group told the first financial reporter that the difficulty in operating overseas markets mainly lies in adapting to the differences in product demand and consumption habits in the global market. First of all, it is necessary to really go abroad to explore the living habits and cultural differences of consumers in various countries and regions, including actively participating in international exhibitions to understand the differences in stationery products in different markets; secondly, we should invite Chinese designers living in various places to design products that meet the needs of the local cultural market, and cooperate with foreign designers to create stationery products with international competitiveness.
With the changes in the overseas stationery market, Huang Ping feels that the difference from the past is that foreign dealers are also more willing to cooperate with companies with brand image, "because having a brand means having quality, innovation and bargaining space." Overseas dealers prefer to cooperate with some Chinese companies with long-term goals, and after we have a close relationship with each other, they will also actively 'take goods and customize', relatively speaking, product sales will have greater room for growth. ”
Huang Ping said that China's manufacturing industry chain is relatively complete, but there are many Southeast Asian countries, such as Vietnam, Laos, Myanmar and other manufacturing industries are not yet developed, so labor-intensive enterprises will increasingly tend to these areas, especially in recent years, India's manufacturing industry began to gradually heat up, relatively speaking, now their labor costs are relatively low, low-end market Chinese stationery manufacturers will gradually lose their competitive advantage.
"Some of China's manufacturing capabilities continue to be complete, and will increasingly open up to the high-end market, and some low-end manufacturing may gradually be eliminated in the Chinese market. Huang Ping said that in India and Southeast Asia, the supply chain manufacturing of China's low-end market can no longer do India, which is obviously to feel the change.
"This year, we went to Russia to open up the market in order to strive for more products to be exported to overseas markets. Huang Changchao told the first financial reporter.
(This article is from Yicai)