Minhua holding experienced the pains of growth

“In China, for every two functional sofas sold, one is Chivas.” Chivas first class, the flagship product of Minhua Holding Co., Ltd. (hereinafter referred to as “Minhua holding”), introduced itself in the official flagship store of tmall. It is known as “top 1 in global sales of functional sofa”. < / P > < p > in the interim report 2020 / 2021 (April 1, 2020 to September 30, 2020), Minhua Holdings said that during the epidemic period, with the help of rare market opportunities, the number of stores expanded rapidly. During the above period, Minhua holdings had a net increase of 658 stores in the Chinese market, and sales from the Chinese market increased by 37.2% over the same period last year. However, the “ambitious” expansion of Minhua holdings in the Chinese market is also accompanied by “pains”. As of January 6, 2021, there are 392 consumer complaints about “Chivas first class sofa” on the black cat complaint website. On the other hand, a “Chivas baby bed” was found out by Shanghai market supervision and administration bureau that “the measured values of bed board and bedside are not in conformity with the standard requirements.” “There are potential safety hazards”. < / P > < p > in the reply, Minhua Holdings said that the company had removed the sampled batches of products from the online mall for the first time. For the batch of products that have been sold, Minhua Holdings said that “it will launch a public recall, and will contact customers one by one to solve the follow-up service problems.” < / P > < p > behind the brilliant sales data, Chivas first class sofa and other products have been repeatedly complained by consumers. Consumer Ms. ye (a pseudonym) told reporters that she bought the three seat electric sofa in the first class of Chivas, but the motor seats on the left and right sides of the sofa and the ordinary seats in the middle are not consistent in leather, pattern and color. Ms. Ye proposed to replace the product, but the problem was not solved after 5 times of replacement. < / P > < p > according to the interim report 2020 / 2021, Minhua holdings sold about 662000 sets of sofa products from April 1, 2020 to September 30, 2020, with a year-on-year growth of 17.8%. Among them, the number of sofa products sold in export decreased by 7.2%, while the number of sofa products sold in China increased by 57.5%. < / P > < p > consumer Ms. ye (pseudonym) told reporters that she bought a three person electric sofa in the first class of Chivas, but the motor seats on the left and right sides of the sofa and the ordinary seats in the middle are not the same in leather, pattern and color. Ms. Ye proposed to replace the product, but the problem was not solved after 5 times of replacement. < / P > < p > in the exchange, Ms. ye also mentioned that the sofa “really tastes great”. Not only that, another consumer, Ms. Ren (a pseudonym), also mentioned that “the formaldehyde of the Chivas product purchased by herself exceeded the standard when it was bought, and the ventilation improved after two months.” < / P > < p > in searching the relevant entries on the Internet, the reporter found that there was a consultation on Chongqing’s online political platform titled “serious formaldehyde in Chivas sofa”. In the help content, Mr. Zhang, a consumer, wrote that he bought a set of sofa from a Chivas sofa flagship store in Jiulongpo District, Chongqing. After receiving the product in July 2020, he found that it tasted very good, and it remained unchanged a month later. According to the indoor air quality standard (GB / t18883-2002) jointly issued by the Ministry of health and other departments, under the standard operation detection, the hourly average value of formaldehyde is 0.1mg/m3. During the exchange, Mr. Zhang told reporters that he had returned the sofa in October of that year. < / P > < p > in addition, on the black cat complaint platform, complaints about “Chivas first class sofa” also focus on the problems of slow delivery, poor product quality and after-sales service, among which there are consumer messages such as “after-sales ignored, no maintenance”, “delivery not on time, delay again and again”. < / P > < p > according to the information released by Shanghai market supervision and Administration Bureau, “Chongqing Minhua Brand Management Co., Ltd.” sells “Chivas” brand baby beds (specification and model: d-c036, Nordic series; production date or batch number: 2019-12-02) in Chivas flagship store of No.1 store, which are nominally produced (or supplied) by “Minhua brand management (Tianjin) Co., Ltd The measured values are not in accordance with the standard requirements. If the index is not qualified, infants are easy to turn out of bed. < / P > < p > tianyancha information shows that the above two companies are wholly owned by Minhua furniture manufacturing (Huizhou) Co., Ltd., and the suspected actual controller is Minhua Industrial Co., Ltd. However, in the annual reports of Minhua brand management (Tianjin) Co., Ltd. in 2018 and 2019, the reporter found that the number of people who paid the basic medical insurance and other five insurances for employees is 0. < / P > < p > in addition to the above-mentioned removal and recall of this batch of products, Minhua holdings also said in its reply that this batch of products are commissioned by a third party, and the company has asked the commissioned manufacturer to stop the production of all crib products immediately for the first time, and guaranteed that the batch of products will not be carried out before they are tested again by the Municipal Supervision Bureau or the third party inspection agency to meet the national standards Volume production and sales. < / P > < p > according to the medium-term performance press conference materials of financial year 2021 published by Minhua holdings, from March 31, 2017 to March 31, 2018, the number of stores of Minhua holdings in the Chinese market increased from 1975 to 2399, with a net increase of 424. However, from March 31, 2018 to March 31, 2019, the net growth of the number of stores decreased to 215. < / P > < p > according to the data disclosed by Minhua holdings, the consumption opportunities during the epidemic period “reversed” the weak development of enterprises in the Chinese market to a certain extent. < / P > < p > according to the interim report 2020 / 2021, as of September 30, 2020, Minhua Holdings has a total of 3532 “Chivas first class” stores, “Chivas five star mattress” stores and Chivas fabric stores in the Chinese market. < / P > < p > this shows that from April 1 to September 30, 2020, the number of Chivas stores will achieve a net growth of 658 in six months. < / P > < p > according to the medium-term performance press conference materials of financial year 2021 published by Minhua holdings, from March 31, 2017 to March 31, 2018, the number of stores of Minhua holdings in the Chinese market increased from 1975 to 2399, with a net increase of 424. By 2020, as of March 31, Minhua Holdings has 2874 stores in the Chinese market, a net increase of 260 over the same period of last year. In the financial year of 2018 (from April 1, 2017 to March 31, 2018), Minhua holdings achieved an operating revenue of HK $10.027 billion, up 28.9% year on year. < / P > < p > then in the financial year of 2019 (April 1, 2018 to March 31, 2019), the operating revenue of Minhua holdings was HK $11.258 billion, up 12.3% year on year. In the financial year 2020 (from April 1, 2019 to March 31, 2020), the operating revenue of Minhua holdings was HK $12.144 billion, with a year-on-year growth rate of 7.9%. < / P > < p > however, with the rapid expansion of Chinese stores from April 1 to September 30, 2020, the total revenue of Minhua holdings also increased by 18.7% to HK $6.637 billion. < / P > < p > during this period, Minhua holdings sold 662400 sets of sofas, of which 342500 sets were sold in China, an increase of 57.5% over the same period of last year. < / P > < p > one side is the growth of sales volume and the number of stores. On the other side, consumers on the complaint platform have several messages about the slow delivery and delayed delivery of Chivas sofa and other products. How to balance the brand reputation and scale expansion of Minhua holdings? < / P > < p > according to the official website, Minhua Holdings has over 1.8 million square meters of low-carbon environmental protection parks in China, including Huizhou in Guangdong, Wujiang in Jiangsu, Wuqing in Tianjin and Jiangjin in Chongqing. < / P > < p > in view of consumers’ complaints about the after-sales service, product quality and delivery delay of Chivas, the reporter also put forward some problems about the supporting service system and production capacity in the letter to Minhua holdings, but Minhua holdings did not reply. < / P > < p > Disclaimer: the purpose of this article reprinted by CNFC is to convey more information, and it does not represent the opinions and positions of CNFC. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk. < p > < p > Chinanet is a state key news website under the leadership of the Information Office of the State Council and the management of China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website publishes information 24 hours a day. It is an important window for China to carry out international communication and information exchange.