Baicaoji quits Watson’s Shanghai Jiahua for high end

With the help of channel adjustment, baicaoji hopes to continuously strengthen its high-end positioning. Recently, a reporter from Beijing Business Daily found that baicaoji products have been withdrawn from Watsons. In addition to withdrawing from Watsons, baicaoji has also launched a series of high-end products. As a pioneer in the high-end market, Shanghai Jiahua has high hopes for baicaoji. But faced with the rise of local brands and the extrusion of foreign brands, it is not easy for Shanghai Jahwa to get rid of the “local flavor” and advanced high-end brands. Recently, a reporter from Beijing Business Daily found that baicaoji products have gradually withdrawn from Watsons. Watsons store sales staff in Beijing New Olympic shopping center told Beijing Business Daily that the related products of baicaoji had been removed from the shelves. “It’s been a long time since the store did not have any products from the collection.” According to the sales staff of Watson’s store in Beijing’s meiouhui shopping center, only Diancui is in the store, and other baicaoji products have been removed from the shelves. Similar to the above situation, the reporter of Beijing business daily learned from many Watson stores in Beijing that there were no other baicaoji products in Watson’s shop except for Diancui. As a high-end star product of Shanghai Jiahua, the company has been making relevant strategic adjustments, such as upgrading the channel layout and repositioning the brand. < p > < p > in June this year, Shanghai Jiahua separated baicaoji Diancui from baicaoji, forming a separate brand Diancui, focusing on Watsons channel. However, baicaoji gradually withdrew from Watsons, focusing on department stores, shopping centers and online channels. According to Lai Yang, vice president of Beijing Business Economics Association, the channel layout before baicaoji did not match the high-end positioning. The distribution channels of baicaoji are mainly department stores and CS channels, and it is difficult for consumers of these channels to become the main consumers of baicaoji. Now, it is necessary to withdraw from Watsons and establish a single brand store in order to fit in with the positioning of self height end. < / P > < p > in fact, baicaoji has been adjusting since 2019. Last year, Shanghai Jiahua successively closed some low efficiency department stores of baicaoji and upgraded the counters. In addition, Herborist is also constantly enriching product lines, introducing products such as freeze-drying mask series, positioning high-end and younger. < / P > < p > as the main force of Shanghai Jiahua, Shanghai Jiahua has been hoping to take a place in the high-end cosmetics market with the help of baicaoji. No matter in Zhang Dongfang’s period or pan Qiusheng’s time, he always emphasized the high-end development route of baicaoji and the direction of its youth. < / P > < p > according to the data, in 2014, there were nearly 2000 CS channels of baicaoji, reaching 3000 at the end of 2015; in 2014, baicaoji contributed nearly 1 / 3 of the revenue of Shanghai Jiahua. However, the good times did not last long. In 2016, baicaoji began to decline and suffered losses, and the performance of Shanghai Jiahua was also weak. In the first half of 2020, Shanghai Jiahua’s revenue decreased by 6.07% year-on-year, net profit decreased by 58.68%, and baicaoji lost nearly 100 million yuan. < / P > < p > in order to reverse the decline, Shanghai Jiahua tried to open up the situation through high-end. In addition to strengthening the high-end line of baicaoji, Shuangmei, another high-end beauty brand of Shanghai Jiahua, has also been pushed to the front of the stage. In August this year, Shuangmei settled in Yintai City, Binhu, Hefei, Anhui Province. Similarly, Shanghai Jiahua’s infant and child care brand initially positioned in the middle and high-end market.

in the industry view, the above series of actions show that Shanghai Jahwa wants to tear out the “soil flavor” old brand of daily chemical enterprises. To promote and strengthen the brand to achieve high-end development has become the direction of Shanghai Jiahua. < p > < p > in the view of Bao Yuezhong, a new retail expert in FMCG industry, the high gross profit brought by high-end is undoubtedly an important revenue source for enterprises. However, from the perspective of consumption stratification in the current Chinese market, high-end is not necessarily suitable for all brands. With the rise of generation Z, high consumption power is not the main force. On the contrary, who can grasp the young and fashionable consumer groups can really grasp the market. < / P > < p > in the A-share market, pelaia and Maru Mei, which are located in the first tier of market value, are the primary competitors of Shanghai Jiahua. In terms of market value or channel layout, pelaia is obviously superior to Shanghai Jiahua. So far, the market value of pelaia is 32.4 billion yuan, and that of Shanghai Jiahua is 28.7 billion yuan. < / P > < p > in terms of channels, in the past three years, the proportion of pelea’s e-commerce revenue increased from 36.08% in 2017 to 63.55% in the first half of 2020. Although Shanghai Jiahua has not released specific data on the proportion of online revenue, according to relevant sources, up to now, Shanghai Jiahua line accounts for about%. < / P > < p > in addition to local competition, foreign high-end brands are also powerful competitors on the way to Shanghai Jiahua’s advancement. According to the annual reports of L’Oreal, Shiseido and Estee Lauder in 2019, China market and high-end product business have become the growth engine of the above companies. < p > < p > Lai Yang said that behind the weak performance of baicaoji, it also reflected the powerlessness of the local daily chemical brands represented by Shanghai Jiahua to develop the high-end market. In the high-end market, brand and R & D barriers are relatively high, and most of the world’s large cosmetics groups have a high market share. Shanghai Jiahua is also aware of the above problems. In the 2019 performance teleconference, the relevant responsible person of Shanghai Jiahua disclosed that baicaoji encountered the situation of brand aging at the end of 2016, and the company will conduct a brand-new carding of its brand strategy in 2019. However, the market will not leave too much time for Shanghai’s home improvement. < / P > < p > Disclaimer: the purpose of this article reprinted by china.com finance and economics is to convey more information and does not represent the views and positions of the website. The content of this paper is for reference only and does not constitute investment advice. Investors operate accordingly and bear their own risks. < p > < p > Chinanet is a national key news website under the leadership of the Information Office of the State Council and managed by China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website releases information 24 hours a day, which is an important window for China to carry out international communication and information exchange.