text | Market value observation, author | Wen Yu, editor | Xiaoshimei
In 2023, Shanghai Jahwa achieved operating income of 6.598 billion yuan, a year-on-year decrease of 7.16%; net profit attributable to the parent company was 500 million yuan, a year-on-year increase of 5.93%.
Simply looking at the data, compared to the cutting-edge brands that have risen rapidly due to the dividends of e-commerce in recent years, Shanghai Jahwa, as an established daily chemical company, does have a feeling of "a new generation replacing the old". However, if you further dissect the financial report data, you will find that many problems behind it are not as simple as they appear on the surface.
The situation is better than others
An indisputable fact is that the sudden rise of new brands in the past few years has largely benefited from the dividends of e-commerce channels.
Yunifang took advantage of Taobao channel dividends, and its brand revenue increased to 1.2 billion in 2017, nearly doubling in two years; Huaxi Cosmetics business took advantage of Chaotou live broadcast and Douyin channel dividends, and two brands will have revenue of more than 10 billion in 2022 billion; when it entered Douyin in 2019, Proya’s revenue was only about 3.1 billion, and by 2022 it had climbed to over 6.3 billion. Whoever can take advantage of the Internet wave and quickly integrate traffic resources in a short period of time will have the opportunity to seize the market in this channel migration war, and this is precisely where Shanghai Jahwa suffers.
Compared with newcomers who have no historical baggage, Shanghai Jahwa, as a long-established daily chemical company, has penetrated deeply and extensively in the offline era. From high-end supermarkets in the third ring road to small shops in remote rural areas, Shanghai Jahwa We have a deep and high-density sales network. Before 2020, the company covered 200,000 supermarket stores, nearly 90,000 rural outlets, approximately 13,000 cosmetics stores, approximately 6,000 maternal and child stores, and nearly 1,500 department stores in China.
Since ancient times, the ship has turned around. Moreover, Shanghai Jahwa is not just a beauty company, but also has a daily chemical business. The company cannot suddenly abandon offline channels and attack online with all its strength. Transformation requires a process, which is the same for any enterprise.
What makes Shanghai Jahwa even worse is that during the 2022 epidemic, Shanghai was closed and the company was involved. The supply chain and e-commerce performance were blocked, causing the platform traffic algorithm to weaken the company's traffic support. The reduction in traffic affected sales. Sales volume The reduction further affected the diversion, forming a vicious cycle. The first quarter of 2023 will still be negatively affected by this cycle, which caused a direct blow to sales performance. The development rhythm of
has also been disrupted.
According to people familiar with the matter, Shanghai Jahwa has made a lot of investment plans in 2022, but the fluctuations in the general environment have made the output inefficient at all. Based on practical considerations, the management has made certain strategic contractions starting from the second half of 2022. This will change from This can be clearly seen in the sales expenses. Proya's sales expenses will increase from 1.992 billion in 2021 to 2.786 billion in 2022. During the same period, Beitani's sales expenses will increase from 1.681 billion to 2.048 billion, but Shanghai Jahwa's will drop from 2.947 billion to 2.652 billion.
The contraction in 2022 will directly affect the performance in 2023. Last year, Shanghai Jahwa basically moved forward with the "sequelae of the epidemic".
Channel transformation and the disruption caused by the epidemic have all come together to bring considerable pressure and challenges to Shanghai Jahwa’s operations. Some investors may not be satisfied with the results, but it must be admitted that Shanghai Jahwa is temporarily at a disadvantage in channel transformation, rather than lagging behind in product and brand power; it is mostly force majeure that affects it, rather than lack of ability and hard work. Not enough to dominate. The fundamental difference between
is that the latter is hopeless, while the former still has the possibility of a comeback.
Clean up the old mountains and rivers
Judging from the current information, 2024 is likely to be the year that Shanghai Jahwa takes off.
Since the second and third quarters of last year, as the general environment stabilized, Shanghai Jahwa has gradually begun to increase its offensive. Sales expenses for the whole year of last year have turned into positive growth. The company’s management has also made it clear on many occasions that this year Shanghai Jahwa We will continue to integrate resources to fight the war. Taking into account the lag in performance transmission, last year's investment will be realized this year.
Another point worth looking forward to is the adjustment of the organizational structure. In the past, Shanghai Jahwa’s organizational structure was based on functions. Now it has been adjusted to a business unit structure, with the establishment of beauty, skin care and maternal and infant business departments, personal care and home care business departments, and overseas businesses. department.The business department is the main decision-making body and is responsible for the performance results.
The beauty industry has extremely obvious consumer-oriented characteristics. In the long run, only companies that value consumer insights and have an efficient organization can win in the end. Reviewing the previous product upgrades and brand renewal processes of international first-tier brands such as Olay and L'Oréal Paris, the organizational and personnel adjustments behind them have had a profound impact. Under the new organizational structure of
, Shanghai Jahwa's model has changed to "responsible for household production and responsible for profits and losses", which can not only reduce the wear and tear of information transmission in the intermediate links from product development to consumer purchase, improve the efficiency of responding to market demand, but also unify all aspects. The benefits of departmental interest relationships and thus activating team vitality are obvious and highly certain.
Finally, as mentioned above, emerging brands used traffic dividends to overwhelm Shanghai Jahwa. Now as traffic costs continue to increase, this trend is weakening. The core of future competition is likely to return to product power and brand power. If this logic holds true, Shanghai Jahwa's comparative advantage will be highlighted.
The history of Shanghai Jahwa can be traced back to 1898. This kind of heritage and tradition is unmatched by similar competitors. Many of its brands have had glorious pasts - Shuangmei was founded in 1898 and was exhibited at the 1915 Panama World Expo. Won the gold medal together with Moutai; Megajing was founded in 1962 and produced China's first bottle of mousse, the first styling hair cream, and the first hand cream, which is the collective memory of three generations; Liushen was founded in 1990, in Kai In the "2023 Brand Footprint" released by Du Consumer, Liushen brand consumers reached 135 million people, with a penetration rate as high as 35.1%; Gaofu, founded in 1992, is China's first men's cosmetics brand...
▲Double Sisters Panama Expo Gold Award
Nowadays, in the wave of domestic products, Shanghai Jahwa can be said to have a good hand. As long as these brands with heavy accumulation and accumulation can be awakened, they will not be afraid of failing to achieve results.
Road Yaozhi Horsepower
In 2020, Pan Qiusheng took over as chairman and CEO of Shanghai Jahwa. At that time, the capital market was very hot, and the company's stock price subsequently reached a record high. However, A-shares have experienced deep adjustments since 2022, and Shanghai Jahwa’s stock price has also corrected simultaneously, even hitting a new low in many years.
During Pan Qiusheng's tenure, Shanghai Jahwa's stock price fluctuated violently, and he naturally became the target of investors' anger and criticism. But objectively speaking, it is actually unfair to let Pan Qiusheng take the blame.
On the one hand, the core reason for the sharp decline in stock prices lies in the capital market environment rather than the company's operating conditions. Even Proya, which has experienced rapid growth, could not escape a 30%+ stock price drop last year; on the other hand, due to objective force majeure factors , Pan Qiusheng's strategic intentions have not been fully developed, so he cannot be judged as a hero based on his temporary success or failure and deemed to be incompetent. On the contrary, the series of measures Pan Qiusheng proposed after taking office are all aimed at addressing current shortcomings and directly attacking pain points.
For example, the "123" business policy, "1" represents consumer-centered, "2" refers to brand innovation and channel advancement as the two basic points, and "3" represents culture, system and process and digitalization. Three boosters. Improving quality and efficiency in channels, focusing on big brands and letting go of small ones, and building consensus on culture, these are what Shanghai Jahwa needs most in its transformation. And from a realistic point of view, with the gradual restoration of business order, reforms have begun to take shape. Effectiveness.
For example, Shanghai Jahwa previously proposed to shut down and transfer inefficient businesses while focusing on categories with high gross profit, high growth rate, and high brand premium. Now this strategy has paid off. In the third quarter of last year, the average selling price of the company's skin care products increased by 36.8% year-on-year, and the average selling price of personal care products and maternal and infant products also increased by 8.81% and 9.04% respectively.
For another example, the team's combat effectiveness has been significantly improved after the organizational structure has been adjusted. The personal care division’s Maxam live broadcast room has accumulated 600,000 fans within 45 days of its launch. This has not only promoted the sales of Maxam on the Douyin platform, but also promoted the younger generation of Maxam consumers. The success of “old babies” has even become a A classic case of domestic product content marketing.
According to the "2023 China Cosmetics Yearbook" released by Qingyan Intelligence, the overall size of China's cosmetics industry last year was 797.2 billion yuan, a year-on-year increase of 5.2%. Among them, the sales of Chinese beauty products increased by 21.2% year-on-year, and the market share reached 50.4%. The market size reached 50.4% for the first time. more than foreign investment.
The general trend is obvious. With the end of the era of buying houses and cars, the consumption outlook of the younger generation has changed significantly. The sense of life experience and gain will be the themes of the next consumption era. The beauty economy and self-pleasant consumption are destined not to end. , and domestic beauty products will still be an incremental track. The world is still uncertain, and a dark horse may appear at any time. Shanghai Jahwa and Pan Qiusheng himself should not rush to conclusions. Lu Yao knows the power, and if you give them some time, the situation may be completely different.
