Net profit plummeted by 32%, and Xiaoxiong Electric suffered a performance waterloo!

The story of Xiaoxiong Electric's Internet celebrity household appliances can't be told.

In the first half of the year, Xiaoxiong Electric handed over a report card of "double decline" in revenue and net profit: revenue of 2.131 billion, a year-on-year decrease of 8.97%; The net profit was 160.9 million, a year-on-year decrease of 32.01%.

From the perspective of the extended cycle, this is the second time that Xiaoxiong Electric has suffered a "double decline" in its reported performance since 2021, and compared with 2021, Xiaoxiong Electric's current situation is actually more severe.

Comparing the two performance declines: the main reason why Xiaoxiong Electric's performance will decline in 2021 is that the growth rate is too high due to the surge in demand in the previous year. In 2020, driven by the epidemic, the home economy exploded, and Xiaoxiong Electric, as a small household appliance giant, became one of the beneficiaries, with revenue and net profit growth rates of 44.51% and 98.93% respectively that year.

Looking at the first half of this year, there are not too many special reasons for the decline in the performance of Xiaoxiong Electric, purely because the products cannot be sold.

According to the subdivision of products, most of the products of Xiaoxiong Electric have experienced a decline in revenue in the first half of the year. From the current point of view, not only Xiaoxiong Electric, the entire small household appliance industry is facing a decline in demand and cannot be sold.

Small household appliances can't be sold

In the first half of the year, the reason why Xiaoxiong Electric had a "double decline" in performance was, in the final analysis, that small household appliances could not be sold.

Let's take a look at the specific sales of each product. According to the product division, the main products of Xiaoxiong Electric have 7 categories - pots, pots, electric appliances, other small household appliances, Western-style electrical appliances, small household appliances and electric heating, in the first half of the year, these 7 categories of products achieved revenue of 505.6 million, 370.9 million, 334.5 million, 278.6 million, 243.5 million, 236.3 million and 138.9 million.

Compared with the same period last year, the revenue of most of Xiaoxiong Electric's products declined in the first half of this year. For example, the pot and pot with the highest revenue had a revenue of 582.6 million in the first half of last year, a decrease of 77 million in the first half of this year, and a decrease of 77 million in the first half of this year, as well as pots and electric cars, with a revenue of 437.1 million and 363.2 million in the first half of last year, respectively, and the revenue of these two products decreased by about 60 million and 84 million respectively in the first half of this year.

In fact, in order to promote product sales, Xiaoxiong Electric has made a lot of efforts, such as product price reduction - according to media reports, since the beginning of this year, Xiaoxiong Electric has carried out price reduction promotions on many of its products, and among similar products, the price of Xiaoxiong Electric is lower than that of Joyoung. In the first half of this year, the gross profit margins of these three products were 33.3%, 30.61% and 39.53%, respectively, and in the first half of last year, the gross profit margins of the three products were 38.94%, 37% and 40.89% respectively.

Affected by the decline in product gross profit margin, the profit margin data of Xiaoxiong Electric also declined in the first half of the year: gross profit margin and net profit margin were 36.7% and 7.55% in the first half of this year, compared with 37.71% and 10.11% in the same period last year.

However, this practice has not brought much change to the performance of Xiaoxiong Electric, and it still can't be sold. In fact, even if Xiaoxiong Electric works hard, it is difficult to get out of the growth dilemma - after all, the situation of the entire small household appliance industry is not very good. According to data from Aowei Cloud Network, the overall retail sales of small kitchen appliances in China in the first half of 2024 will be 26.1 billion yuan, a decrease of 5.4% from the same period last year; Retail sales were 130 million units, up 0.4% year-on-year.

From the current point of view, in the case of sluggish demand in the entire small household appliance industry, it is still quite difficult for Xiaoxiong Electric to "exchange price for volume". And, more importantly, at present, more and more small household appliances are regarded as "IQ tax", pseudo demand, in such a development trend, the future of Xiaoxiong electrical appliances will be more and more difficult.

Demand is "falsified"?

For Xiaoxiong Electric, the fluctuation of the industry is not terrible.

After all, no industry can grow forever; The really scary part is that the demand of the entire industry has been "falsified", which means that the industry will be in a long-term downward trend.

From the current point of view, Xiaoxiong Electric is facing this risk. The media "Vista See the World" mentioned in a media about the analysis of small household appliances: from the feedback of a large number of consumers, a considerable number of small kitchen appliances are "useless", in addition to stir-fry machines, breakfast machines, wall breaking machines, as well as cutting board sterilizers, fruit and vegetable cleaning machines, dumpling machines, noodle machines and so on.

Obviously, after the rapid development of small household appliances for several years, everyone has gradually recognized that the demand for small household appliances is only pseudo demand, and the home appliance giant Midea has even taken the initiative to cut off most of the small household appliances - Fang Hongbo, chairman of Midea Electric Appliances, once said at the group's 2022 annual general meeting of shareholders: "Small household appliances are a mistake made by Midea, these products are updated and iterated quickly, and the life cycle is short, which can be said to be short-lived, and they will be gone in one or two years." ”

In addition, a point of view is also mentioned in the article: from the perspective of the industry, small kitchen appliances are not the product of technological upgrading, their production mode is generally OEM, and the brand chooses a very mature technology in the industry, only does a single function, compresses costs through mass production, and the only place to upgrade is "appearance". Judging from the financial report, in the first half of this year, the sales expenses of Xiaoxiong Electric were 397.8 million, and the research and development expenses were 92.85 million, and the research and development expenses were less than a quarter of the sales expenses.

Of course, not all small appliances are "IQ taxes". According to the data of Aowei Cloud Network, in the first half of 2024, the retail sales of soybean milk machines, electric cookers, and coffee machines increased significantly year-on-year, reaching 38.6%, 14.6%, and 12.9% respectively. However, these products are not the strong point of Little Bear Electric. Taking soybean milk machine and electric cooker as an example, the current leader in these two segments is Joyoung shares, in the first half of the year, Joyoung's nutrition cooker series revenue was 1.842 billion, and the revenue of food processor series was 1.425 billion.

From the current point of view, the situation of Xiaoxiong Electric is becoming more and more embarrassing, the demand for most of its products has been "falsified", and the real demand for small household appliances, Xiaoxiong Electric is not good at it, and this is the result of Xiaoxiong Electric's long-term "heavy marketing, light research and development". Of course, at present, Xiaoxiong Electric has just shown a trend of declining performance, and there is still time to adjust the strategy, but in the fierce competitive environment, there is not much time left for Xiaoxiong Electric.