2 yuan per ballpoint pen, how does Chenguang leverage the trillion-dollar office market?
Editor’s note: This article is from the micro-channel public number “of those Internet things” (ID: hlw0823), Author: peach king.
In China, consumption is gradually decentralized.
Post-90s and post-00s are not keen on a certain brand of milk tea, clothing, or even a certain celebrity. They pursue personalization, but there is one exception. They have used Chenguang Stationery before or now.
If there is no morning door around the school, you will feel like you have gone to a fake school. There are always some fateful nightmares in the student days, that is, “5 Years College Entrance Examination and 3 Years Simulation” with “Morning Stationery”.
You may not think that Chenguang, which sells a 2 yuan each, has a revenue of more than 8 billion yuan a year, and the latest market value is 79 billion yuan.
For a long time, “Morning Light” has quietly lurked around schools, streets and alleys, community supermarkets and other inconspicuous places, making a fortune in a muffled voice.
“Standing on the vent, the pig can fly.”
Without the high gross profit margin of liquor and the high-tech concept of chip stocks, how did Chenguang leverage the trillion-dollar office market with its “one pen”? Why is it that the negative reviews continue to be able to squeeze and rise against the trend? Where is the national tide breaking against Biaoyang brand stationery?
The morning light of the attack is behind the dividends of the times
Established in 1996, started to build Chenguang pen industry in 1999, listed on the Shanghai Stock Exchange in 2015, and its total market value has increased from 7.2 billion yuan to 63 billion yuan.
From 2011 to 2020, Chenguang’s compound revenue growth rate was as high as 29.06%, and its net profit compound growth rate was 30.13%. The 5-year growth rate has been close to 9 times. Chenguang Stationery will very well become the next Ten bagger in A shares…It can be said that, Chenguang has gone smoothly these years.
The core contribution that caused Chenguang Stationery’s stock price to rise 9 times is the 3 times the price-earnings ratio and the 3 times the performance growth.
A ray of morning light in the era.
Chen Huxiong, President of Chenguang Stationery, was born as a farmer in Shantou, GuangdongLittle difficulty.
Quality problems occur frequently, and the threshold of goodwill decreases
“plagiarism” often can only learn from the shape. “Quality” is the second biggest problem that people complain about after “plagiarism.” Feibai and other negative voices are endless.
In 2018, Chenguang Stationery initiated two recalls due to unqualified sampling inspections. In March, 110,000 initial color gel pens were recalled. Six months later, the total volatile organic compounds of the “Chenguang” brand ice-through solid glue did not meet the standard, and a total of 153,600 pieces were recalled.
In the first half of 2020, a question and answer about “What evil did Chenguang Stationery do?” Zhihu became popular. The experimenter used Chenguang’s “quick-drying” gel pen to write on Chenguang paper that was “not easy to bleed”. , As a result, there was a phenomenon of ink bleeding, which aroused everyone’s complaints about product quality.
White Moonlight turned into rice particles at the corners of his mouth, and the condemnation was overwhelming.
For the description of the performance level, Chenguang has always been well versed in semantics, “not easy to break ink” and “not easy to scratch paper”. It is not easy to be two words, and the connotation is quite deep.
Compared with products of other brands, the difference is obvious.
In the Mitsubishi K6 type gel pen, the arc-shaped nib is mentioned, the edges and corners are removed, so there is no paper hanging. It is not easy to hang paper, not easy to hang paper. Baile BL-P500 style, three-point support pen nib, writing smoothly without ink bleeding.
These brands have specific basis for the description of each function of the product, which is different from Chenguang’s image summary.
Continuously inking, no scratching, no oil leakage… These basic product properties, Chenguang description is vague, and need to be modified with “difficult”. The pen holder is “comfortable” with a protective cover, and without a protective cover for “slip”, it can be logically self-aligned.
The stationery industry has relatively low barriers, and it will not cost a hundred days. The change in the overall structure of the industry and quality issues are what Chenguang Stationery must face.
The domestically produced stationery is in the top position, the road is obstructive and long
Whales can only be raised in the sea, and the scale of the industry determines the ceiling of the company.
Tianyan Check data shows that in 2019, the size of my country’s stationery market was more than 120 billion yuan, but the average consumption of stationery by Chinese people was only 105 yuan, which is more than double the global average of 240 yuan. From this point of view, the stationery market The scale is expected to exceed 300 billion in the future.
China has more than 300 millionThere are more than 100 million university, middle and elementary school students and more than 100 million office workers. They form the core of the stationery industry and their demand is very stable.
The market is huge, but the degree of concentration is very low. There are more than 8,000 stationery companies in China, and only 5 companies with more than 1 billion are Chenguang, Deli, Qixin, Guangbo and Zhencai.
From the perspective of manufacturing companies, there are a large number of companies with low market concentration. There are few companies with both brand and scale effects. Most companies have a single product and competition is concentrated on low-end products.
Chenguanggui is a domestic giant, and it also occupies only 7.32% of the market. The sum of the top five stationery brand markets is less than 20%.
The overall financial report of Chenguang Stationery looks “fascinating”, but compared with the past, the growth rate of revenue and net profit has slowed down.
At the same time, the gross profit rate of Chenguang Stationery is also declining. At the same time, there are frequent quality crises and the increasing inventory volume year by year… These constitute “hidden worries” for the future development of Chenguang Stationery.
For fast-moving consumer goods, a high gross profit margin means a high value-added product. Improving the added value of products is Chenguang’s biggest problem.
The value of beauty is justice!
Morning recruited a large number of designers, IP cross-industry cooperation, and “People’s Daily”, “Bazaar”, “British Museum”, “Van Gogh Museum” launched a series of products; also broke the dimension wall, and ” “One Piece”, “Little Prince” and “Lonely Planet” are linked to capture the aesthetics of young people and target the corresponding subdivided groups.
Insight into the consumer psychology of parents, the “Confucian Temple Blessing Series” and “MG666 Series” both focus on test pens. The product description “empowers candidates with a positive energy culture at the spiritual level” is really straightforward.
Online sales are also the focus of its efforts. Chenguang has used KOC content to grow grass on short video platforms such as Kuaishou and Douyin. The washed color markers and Li Jiaqi collaborated on live broadcasts.
In order to increase the frequency and length of stay in the store, and thereby improve the floor efficiency of a single store, Chenguang began to upgrade some of the stores to create the Jiumu Sundries and Chenguang Life Museum.
Chenguang Life Hall, mainly stationery, daily life, and entertainment products, suitable for 8-15 year olds; Jiumu Sundries Club, chiefFor stationery, cultural and creative, educational entertainment, and practical home furnishing, it is suitable for people aged 15-35.
Although the overall situation is still at a loss, a single store has begun to make a profit, which shows that the model has basically worked.
In 2018, Chenguang Living Hall (including Jiumu Sundry Company) achieved a total operating income of 305.92 million yuan, a year-on-year increase of 49.15%.
Competition has always been there, and it will become increasingly fierce. Not to mention MUJI, in recent years, various domestic cultural and creative stores and lifestyle stores have become popular. Cross-store marketing such as Eslite Life and Sisyph Bookstore has also been tested and accepted by the market, and more and more brands want to take a share in this field.
Conclusion:
I also look forward to the day when we bring up high-end pens and blurt out it is no longer Mitsubishi, Baile, Piton, Zebra, but Chenguang, True Color, Deli, Baixue, any China that we can call its name Brand.
“There are always new ideas” is Chenguang’s Slogan, but this is not enough. “To have real technology” is the magic weapon to eliminate the pressure of competition.
In the era of traffic, the most important thing is not traffic, but word of mouth.
Reference material:
1 Reading the financial report: Chenguang Stationery’s profit growth rate hits a new high since its listing. The new business model is still to be verified
2 Investor Network: Chenguang Stationery is difficult to transform: the new business has lost 6 years in a row, and product quality problems frequently occur
3 Xiaobei said the financial report: Chenguang Stationery, great companies are born from “plagiarism”?
4 Data from: Tianyancha
5 Picture from: Internet