In the past decade, the kitchen appliance industry has ushered in a golden age under the dual benefits of the real estate market boom and consumption upgrading.
However, with the cyclical downturn of the global economy and the impact of the epidemic, the market growth rate has come to an abrupt halt, especially the shocks in the real estate industry, such as the Evergrande incident, which have had a severe impact on the related industrial chains such as home appliances and building materials, and the slowdown in growth has become the new normal.
In the context of the overall pressure on the industry, Vantage has drawn a continuous rising revenue curve with its tenacious development trajectory. According to the financial report data, from 2020 to 2022, Vantage's operating income jumped from 4.360 billion yuan to 5.819 billion yuan, even surpassing the pre-epidemic level.
Since 2023, with the gradual implementation of macroeconomic policies, the prosperity of the real estate industry has rebounded in an orderly manner, and the kitchen appliance market has also shown signs of a moderate rebound, and the kitchen appliance market is entering a new cycle of stock replacement.
According to AVC, in 2023, the retail volume of kitchen and bathroom rigid demand categories (smoke, stove, electric heating, and combustion heat) will be 69.87 million units, a year-on-year increase of 0.1%, and the retail sales will be 99.8 billion yuan, a year-on-year increase of 6.5%, the retail volume of product demand categories (washing, embedding, elimination, and netting) will be 14.68 million units, a year-on-year increase of 5.5%, and the retail sales will be 42.3 billion yuan, a year-on-year increase of 8.6%, and the retail sales of integrated categories (integrated stoves) will be 2.78 million units, a year-on-year decrease of 4.2%, and the retail sales will be 24.9 billion yuan, a year-on-year decrease of 4.0%.
On the evening of April 25, Vantage delivered a financial report for the full year of 2023 and the first quarter of 2024 that exceeded market expectations. In 2023, the operating income will be about 6.233 billion yuan, an increase of 7.12% year-on-year, and the net profit attributable to shareholders of the listed company will be about 447 million yuan, an increase of 212.5% year-on-year.
In the first quarter of 2024, the revenue was approximately RMB1.381 billion, an increase of 15.6% year-on-year, and the net profit attributable to shareholders of the listed company was approximately RMB124 million, an increase of 34.61% year-on-year.
(Key accounting data and financial indicators, source: Vantage 2023 annual report)
On the second day of the results release, Vantage shares had a 10% daily limit.
Break through the "involution" of kitchen appliances with innovation
As an important part of the home appliance sector, the kitchen and bathroom market is ushering in new changes.
This is not only reflected in product technology innovation, but also in the in-depth exploration of user needs, the precise positioning of product transformation and upgrading, the improvement of quality and efficiency of business strategies, and the refined management of channel operations. Major brands are jointly promoting the kitchen and bathroom market into a new development cycle through multi-dimensional exploration.
Vantage, as an active promoter of this change and a pioneer in the industry, has built a product system with rich categories and complete structure based on years of intensive cultivation in the kitchen appliance market. The company's product line not only covers traditional kitchen appliances such as hoods, stoves, and water heaters, but also extends to emerging kitchen appliances such as integrated cooking centers, integrated stoves, dishwashers, and steaming and baking machines, as well as home customized products such as cabinets, wardrobes, and bathroom cabinets, forming a comprehensive and multi-level product matrix.
During the reporting period, the company launched a series of high-tech and innovative products, including Vantage integrated cooking center, steaming and baking machine, a new generation of gas water heater for human baths, Vantage torch stove, Vantage quick-suction ultra-thin smoke E6090HS, integrated cooker PY55, Juneng dishwasher B7, etc. These new products have received good market feedback and high recognition from the industry, such as the Vantage V-Clean Max easy-cleaning system hood won the "19th China Household Appliances Innovation Achievement Award", and the Vantage Quick Suction Ultra-thin Range Hood E6090HS won the "AWE2023 Aplan Award" and other awards.
(Figure: Vantage Integrated Cooking Center, its stove has a heat load of 0.7-5.2kW, 5 levels of precise adjustment, and 70% first-class thermal efficiency, creating the industry's ultra-high effective firepower)
According to the official data of AVC in 2023, the retail sales of ultra-thin sets among the TOP100 models of Vantage's online kitchen appliance sets have won the top 1 in the industry, and the market share of online single product gas stoves is 14.2%, a new high in 9 years, which is undoubtedly the best proof of Vantage's strength in the kitchen and bathroom market, and also the best return for the company's persistence in innovation and pursuit of excellence over the years.
It is worth mentioning that the company highlighted the eye-catching performance of emerging markets such as dishwashers and sterilizers in its financial report. According to the total data of AVC, the overall scale of dishwashers in 2023 will be 1.94 million units and 11.2 billion yuan, with a year-on-year increase of 2.3% in retail volume and a year-on-year increase of 9.6% in retail sales, with strong growth, and the overall scale of disinfection cabinets in 2023 will be 3.51 million units and 3.1 billion yuan, with a year-on-year increase of 1.8% in retail volume and a year-on-year decrease of 1.1% in retail sales, which is significantly narrower;
It is predicted that in 2024, the overall scale of dishwashers will be 2.15 million units and 12.6 billion yuan, with a year-on-year increase of 11.0% in retail volume and 12.2% in retail sales. And according to the total retail push data of AVC and real estate big data, the penetration rate of dishwashers and embedded (considering the integrated stove part) in mainland China is less than 3% per 100 households, which is far lower than that of developed countries such as Europe and the United States, which means huge market potential and growth space.
However, the broad prospects of the market do not hide the increasing competitive pressure in the industry.
With the end of the incremental era, the competition in the industry is showing the characteristics of "involution", small brands are facing pressure to accelerate their exit, and their market share is concentrating on the top brands. In such a market environment, brands must look for new growth drivers to maintain their market position and competitiveness.
Vantage, as an industry leader, is standing at the forefront of this opportunity. The company not only needs to continue to deepen product innovation, improve product quality and service level, but also need to expand market influence and lead the healthy development of the industry through accurate market positioning and effective brand communication.
Channel innovation leads growth against the trend
Vantage's contrarian report card is also inextricably linked to channel reform.
In 2023, the company's retail channels will show a trend of more diversification and fragmentation, from the past offline dominance to the pattern of online and offline dual-line collaboration, among which the C-end performance is outstanding, and the domestic retail business (online and offline) has achieved double-digit growth, significantly outperforming the industry.
(The industry, product, region, and sales model that account for more than 10% of the company's operating income or operating profit, source: Vantage 2023 annual report)
In the offline field, the company has promoted the transformation of a retail-oriented flat structure with the agency system as the core, and currently has more than 300 dealers, more than 3,000 franchised stores, and more than 6,000 sales outlets in offline channels.
At the same time, the company accelerated the channel layout of the sinking market, continued to expand the scope of stores, and improved the market development progress in the third and fourth tier cities and below, during the reporting period, the sinking channel achieved operating income of 965 million yuan, a year-on-year increase of 58.6%;
In the online field, Vantage adopted a combination of direct sales and distribution, covering a wide range of mainstream e-commerce platforms and emerging channels, such as the company's focus on the strategic category "ultra-thin cigarette machine" during the reporting period, which was promoted on Douyin, Kuaishou and Xiaohongshu, successfully improving the traffic conversion rate and expanding the growth space of online sales. During the reporting period, the operating income of online channels was 2.189 billion yuan, a year-on-year increase of 23.44%;
Obviously, in today's increasingly fierce competition in the kitchen and bathroom market, the competition between brands has gone beyond simple product competition, and has turned to seize market opportunities through channel diversification and active integration into emerging channels.
In this process, Vantage not only pays attention to the forward-looking strategy, but also pays more attention to management and technical means and differentiated measures to ensure its continuous leading position in the industry.
In 2023, Vantage will demonstrate its strategic depth and execution in supply chain management. On the one hand, the company insists on dynamically optimizing the supplier base, eliminating backward suppliers in a timely manner, and actively developing high-quality suppliers that meet business needs, and on the other hand, the company continues to improve the efficiency and accuracy of its business through digital and intelligent transformation and upgrading, which plays a positive role in promoting the steady rise of gross profit margin.
For example, in the first half of 2023, the company completed the 1,000-tonnage intelligent servo press project, and 3 servos have passed comprehensive testing and have been successfully put into production. These three intelligent servos will bring significant changes in the production process: the number of equipment will be reduced by 80%, the process will be reduced by 80%, the OEE of equipment will be ≥ by 85%, the efficiency will be increased by 58%, and the first-pass rate will be ≥ 99%.
Through continuous channel optimization and digital and intelligent transformation, Vantage not only provides strong support for the continuous growth of performance, but also sets a new benchmark for the innovation and development of the entire home appliance industry.
A new engine for growth – an integrated cooking center
Today, people's consumption concepts and the evolution of the kitchen appliance industry are far from being comparable to more than ten years ago.
Back more than 10 years ago, consumers' demand for kitchen appliances was extremely simple, and it was enough to complete basic cooking tasks, and they did not pay attention to brand marketing and intelligent products. However, with the rise of a new generation of consumers, especially the post-90s generation, who have gradually become decision-makers in home decoration, kitchen appliances have begun to transform to high-end, customized, intelligent and integrated.
The integrated stove is a striking example. This kind of electrical appliance that integrates multiple functions such as range hoods, gas stoves, disinfection cabinets, storage cabinets, etc., has soared from 4.8% in 2016 to 12.9% in 2020 in just a few years because of its beautiful and environmentally friendly characteristics.
The integrated cooking center is also regarded as the next battleground for kitchen appliances, and even in the eyes of some experts, whoever can seize the market of integrated cooking centers will control the future of the kitchen appliance industry.
This coincides with the ultimate experience of "one-meter space seven-in-one, 15 minutes, 4 dishes and 1 soup" provided by Vantage. According to its financial report, unlike the decline and pressure of integrated stoves, the acceleration of the growth of integrated dishwashers and integrated cooking centers will stabilize in 2023, and gradually realize the transformation from quantity to quality.
According to AVC monitoring data, in 2023, the retail sales of the online integrated cooking center-stove steaming and baking part will increase by 139.6% year-on-year, and the retail sales of the offline integrated cooking center-stove steaming and baking part will increase by 22.6% year-on-year. The retail sales of online integrated dishwashers increased by 25.1% year-on-year, and the retail sales of offline integrated dishwashers increased by 82.8% year-on-year.
At the AWE2024 that just ended last month, Vantage once again took the lead and introduced the new concept of "clean kitchen" into the public eye, releasing a new generation of integrated cooking center "Clean ³" series with kitchen air management system, as well as a number of industry-first "clean clean" technologies and products, such as the JWB19-B8 dishwasher equipped with "twin variable distance global wash", and the integrated clean drink center A500 with "large volume dual-core filtration".
(Photo: Vantage, return to the essence of consumption, build a good-looking, easy-to-use, and clean "clean kitchen")
Pan Yejiang, chairman and president of Vantage, pointed out at the meeting: "The problem of kitchen cleaning is increasingly becoming a national pain point for the majority of mainstream consumers, which is not only a cleaning pain point in the physical sense, but also a health pain point, but also an emotional pain point. ”
The innovation and differentiation advantages of Vantage are based on a deep insight into the essence of user needs, and on this basis, to meet the emotional value of users when purchasing and using. This kind of user-centered innovation not only provides Vantage with natural advantages in product and technological innovation, but also provides new ideas and directions for the transformation and development of the entire kitchen appliance industry.
Continuing to consolidate its advantages in the Red Sea market, Vantage is writing a new page with practical actions.
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