New consumer brand investment illustration.
Editor’s note: This article is from the micro-channel public number “world network operators” (ID: txws_txws), Author: Fan Xiangdong.
In 2020, there will be an unprecedented explosion of new consumer brands. This year, on Tmall Double 11, 360 new brands won the first place in the sub-category, and 16 new brands sold over 100 million yuan, the highest in history. A large wave of brands such as Stone Technology, Perfect Diary, and Bubble Mart have also been listed.
The Spring Festival is approaching, the New Year’s Festival starts, and new consumer brands will once again usher in a sales boom.
Behind the rise of new consumer brands are new life needs. “Post-60s” are exercising, “post-90s” are maintaining health, young people don’t eat rice and eat protein bars… After the epidemic, everyone pays more attention to health and pleasure. The satisfaction of every small demand has promoted new consumer brands. Growth.
Some entrepreneurs said that after the post-95s generation has become a mainstream consumer group, consumer brands will usher in a full iterative match point. There are also entrepreneurs who are more cautious, believing that capital overheats the market, and once it dissipates, the requirements for entrepreneurship in consumer products will become higher.
Capital is indeed constantly pouring into this track, they occupy the hole and are also boosting. The previously unpopular food and drink track has now become a hot spot for new consumer investment, with the amount of financing and valuation repeatedly reaching new highs.
Many capital institutions have become winners with the help of new consumer brands. Some people make a lot of money with just one investment, and some people bet more and more. From them, we see not only the return of money, but also the development trend of new consumer brands.
Consumer brands are intensively listed, and Hillhouse has a good harvest
Despite the impact of the epidemic, 2020 is still the year of IPO. According to statistics from it oranges, the number of Chinese companies that will be listed in 2020 will reach 505, which is close to the peak of 2017.
In these IPOs, there are many consumer products companies, and the catchers behind them have also received generous returns.
“Tianxia.com” statistics on the capital institutions behind multiple listed consumer brands in 2020 found that Hillhouse Capital, Sequoia Capital, Shunwei Capital, Today Capital, Gaorong Capital, Zhen Fund, etc. have all won well Hillhouse Capital is the best.
In 2020, Hillhouse Capital invested in Liangpin Store, MINISO, Perfect Diary, and Blue Moon successfully landed in the capital market, and Hillhouse entered the capital market earlier and held a relatively high proportion of shares.Big.
As early as the 2010 Blue Moon Series A financing, Hillhouse made an exclusive investment of 45 million U.S. dollars, and an additional $1,033,800 in the following year. 10 years of waiting finally paid off. Before the IPO, Hillhouse held 10% of its shares, making it its largest external investor and the second largest shareholder of Blue Moon. In May 2018, during the A+ round of financing of Perfect Diary, Hillhouse entered and continued to raise money in subsequent rounds of financing. Before the IPO, Hillhouse held 13.8% of its shares, ranking first among institutional shareholders.
Xiaomi’s capital has become the other pole in this table. Before the IPO of Xiaomi’s supply chain company Stone Technology, Shunwei Capital under Lei Jun held 12.85%, and Tianjin Jinmi controlled by Xiaomi held 11.85%. Before the IPO of No. 9 Company, the largest institutional shareholder was Sequoia China, holding 16.8%, while People Better and Shunwei Capital under Xiaomi each held 10.91%, which together surpassed Sequoia.
Before the IPO of BESTORE, today’s capital holding ratio is as high as 33.75%. In December 2010, when Liangpin Shop made its first equity transfer and capital increase, today’s capital invested 51 million yuan and obtained nearly 30% of the shares. Calculated on the basis of the market value of about 7 billion yuan in the IPO of Liangpin, today’s capital return on the project of Liangpin is up to 45 times, and the market value of Liangpin now has exceeded 25 billion yuan.
In addition, Perfect Diary has become the largest investment return since Zhen Fund was established, with a book investment return of nearly US$1 billion. After the listing of Bubble Mart, Qifu Capital’s book return exceeded 100 times.
What these successful cases have in common is that the capital institutions have spotted the standards in the early stage and bet firmly.
Four major consumer circuits raise “big fish”
The venture capital market focuses on consumer product entrepreneurship, starting from the “capital winter” in 2018. Over the past two years, more and more investors want to enter the market, and popular projects have begun to pick capital.
Due to different understandings and predictions of the project and the track, the employers who grab the ticket also have different returns. So in the past year, which tracks have harvested the most abundant fruits?
According to the statistics of “Tianxia.com”, in 2020, the explosion of new consumer brands will be concentrated on four tracks: food and drink, beauty and skin care, clothing, and smart appliances.
Comprehensive market performance and degree of attention, the following four companies have become one of the representatives of their respective tracks.
Food and wine drinking track, vitality forest. 2After the angel round in May 018, Yuanqi Forest began a capital rush, raising funds every six months. In October 2019, Yuanqi Forest completed an investment led by Longfor Capital, followed by Gaorong Capital and Black Ant Capital. At that time, the market was rumored to be valued at RMB 4 billion. In July last year, it was disclosed that Yuanqi Forest received a new round of financing from Sequoia Capital, with a valuation of 14 billion yuan.
The beauty and skin care track, Perfect Diary, whose parent company Yixian e-commerce currently has a market value of over US$11 billion. Before the IPO, Perfect Diary completed a total of five financings. In addition to the three institutional investors with high shareholding ratios of Hillhouse, Zhenge, and Gaorong, in the two rounds of financing in 2020, there will be Tiger Global Fund and Park Investment, Carlyle Investment, Warburg Pincus and other institutions.
Apparel track, the main non-gender clothing brand Bosie. In May 2018, Bosie entered Tmall. In 2019, omni-channel sales were 140 million yuan, and there are currently about 15 offline stores. Since 2018, Bosie has completed five rounds of financing. Investors include well-known institutions such as Zhenge, Qingshan, Zhongding, and Jinshajiang.
Smart electrical circuit, cleaning robot brand Yunjing. During Double 11 in 2020, Yunwhale’s sales exceeded 200 million yuan, achieving a 2000% increase. In April of that year, Cloud Whale successively won ByteDance’s lead round A+ and source code lead round B, completing nearly 100 million yuan in financing. In June, it announced that the C round of financing was led by Sequoia, and source code and Hillhouse followed the investment.
Many investors said that the rise of new people is the biggest variable in consumer products. The post-95s grew up in an era of material abundance and pursued individualization, which provided opportunities for the development of new brands.
Zhang Ye, the founder of Tsingshan Capital, once said that there are two dividends in the consumer field, communication dividends and aesthetic dividends. Young consumers are more exposed to information and brands through new media communication forms. The outbreak of food, alcohol, and beauty is strongly related to social platform planting, short videos and live broadcasts.
Today, content and consumption are inseparable. Breakthrough new consumer brands not only emphasize functionality, but also design and aesthetics. Packaging, shape, touch, smell, service, etc. are all important parts of young consumers.
For the new generation of consumers, self is becoming more and more important. In 2020, the British company of Victoria’s Secret went bankrupt, and new underwear brands such as Ubras, which focus on no rims and emphasize relaxation and comfort, ushered in an explosion. Behind this is the change in consumer mentality: women abandon the sexy underwear of male aesthetics and pursue physical and mental pleasure.
New categories, new regions, more opportunities for consumer goods entrepreneurship
Not long ago, Professor Zhang Ying, deputy dean of the Guanghua School of Management of Peking University, pointed out that the new brand corresponds to segmented needs.
“Due to the unprecedented increase in information density, an era is no longer ten years or five years, and it may be different after three years. Consumers have formed many unique preferences, and they are forming faster and faster. Based on this, a large number of new brands have emerged.”
This is indeed the case. Data shows that most of the top 500 new brands on Tmall appear in the new demand “brand no man’s land”. When people’s hobbies change, when the big names don’t have a keen sense of smell, opportunities for new brands come.
Turkey Appliances seized the vent of household cleaning after the epidemic, and took advantage of the trend with a sterile knife and chopstick holder; Toffee Pie saw the troubles of Chinese women with big breasts and made bras for them; GOTO made trendy shoe storage boxes , Last year double 11 jumped to become the champion of sub-categories.
It is worth mentioning that in addition to the “demand bonus”, new brands usually use a combination of “manufacturing bonus”, “design bonus” and “e-commerce bonus”. Looking at the location of the new Tmall Top500 brand, we can find that Guangdong is the most, followed by Zhejiang.
From a city perspective, most of them are concentrated in first- and second-tier cities. Shanghai, Shenzhen, Hangzhou, Guangzhou, and Beijing rank in the top five, and industrial belt concentrated areas such as Suzhou, Ningbo, Dongguan, and Foshan are also among the top ten.
Although the central, western, and northeastern regions are relatively small, they are not absent. There is the second factory in Hankou in Wuhan, Miss Fu in Chengdu, Jinniantang in Xi’an, Douxiaoxiao in Harbin, and new brands in Qingdao, Changchun, Shijiazhuang, Haikou and other places. Consumer brands with regional characteristics have become a new trend.
Consumer track capital surge
For a long time, consumer products have not been valued by investors. An important reason is that this type of industrial investment has limited imagination and slow growth rate, which cannot match Internet projects.
As China’s manufacturing supply chain becomes more mature, the production cost of consumer products is reduced; and platforms with trend insight, marketing, supply chain, logistics and other capabilities represented by Tmall also provide digital operations for new brands Solution, accelerate its development and break the circle, and the track of consumer brands gradually becomes “sexy”.
An obvious trend is that in the past two years, more and more investment institutions have invested a lot of manpower to watch the consumer track, or set up subsidiaries that focus on investment and consumption. thus