Blue Moon’s Red Sea war has no end.
Editor’s note: This article is from the micro-channel public number “Palladium network” (ID: wwwbailve), Author: Li Lili, editor: thin Wo cool.
At the end of 2020, Blue Moon Group landed on the Hong Kong Stock Exchange, and “the first brother of laundry detergent” got its wish and became the “first share of laundry detergent”, and the market also gave a market value of close to 100 billion Hong Kong dollars.
Four months later, Blue Moon Group announced its first financial report since its listing. Overall, for the whole year of 2020, Blue Moon Group achieved operating income of HK$6.996 billion, a slight decrease year-on-year; net profit of HK$1.309 billion, a year-on-year increase of 21.3%.
The seemingly excellent financial report does not seem to be recognized by the capital market.
At the close of the next day, Blue Moon’s share price reported at HK$11.96, down 5 percentage points. As of today, the sustained decline continues. The price-earnings ratio of Blue Moon has dropped from nearly 70 times at the time of issue to 50 times, but compared with Unilever 21 times, P&G 25 times, Blue Moon’s price-earnings ratio seems to be still at a high level, so it is difficult to speculate that Blue Moon’s stock price “Stop here.”
There is no surprise in the ordinary
The 2020 annual report shows that Blue Moon’s personal cleansing care and household cleaning categories have achieved rapid growth. Among them, personal cleansing care products will achieve revenue of 836 million Hong Kong dollars in 2020, a year-on-year increase of 99.7%. Household cleaning and care products will achieve revenue of HK$565 million in 2020, a year-on-year increase of 24.5%.
However, it is worth noting that clothing cleaning and care is down 9.4% from the 6.178 billion yuan in 2019, to only 5.596 billion Hong Kong dollars.
On the surface of Blue Moon’s main business, only clothing and care products have a declining revenue, but for Blue Moon, which uses laundry detergent as its lifeblood, it is tantamount to sending a signal that the basic disk has been eroded. After all, clothing and care accounted for Its total revenue reached 80%, and brought the first decline in revenue in four years.
In this regard, Pan Guoliang, Chief Financial Officer and Company Secretary of Blue Moon Group, said that the decline in sales of clothing cleaning and care products is due to the epidemic weakening consumer demand for clothing cleaning and care products, and consumers need to maintain social distancing, thus reducing For outdoor activities.
But this does not seem to be convincing. According to the forefront of daily chemical industry reports, the overall sales of the Ali platform laundry detergent in 2020 will exceed 7.7 billion yuan, and the sales will exceed 151.5 million pieces+, the sales of laundry detergent increased by 25.7% year-on-year, and the number one Blue Moon increased by 6% year-on-year. The industry is upbeat, obviously unable to support the so-called “decrease in outdoor social networking caused by the reduction of the epidemic situation”.
On the other hand, the financial report showed that Blue Moon’s net profit was HK$1.309 billion, a year-on-year increase of 21.3%; the gross profit margin was relatively stable, increasing to 64.5%.
According to the analysis by industry insiders, Blue Moon’s profit can have such a high growth momentum. In addition to reducing the number of offline sales personnel, it is mainly due to the decline in raw material prices. After all, Blue Moon has frankly stated the profit margin in the prospectus. The increase was mainly due to the decline in raw material prices.
It is reported that the main raw materials of Blue Moon are palm oil and low-density polyethylene (LDPE). The former is used for products and the latter is used for packaging. The two together account for close to 80% of the total cost.
From January 2017 to January to April 2020, the average market price of palm oil dropped from about 5,800 yuan/ton to about 4,800 yuan/ton, and the average market price of low-density polyethylene went from close to 10,000 yuan/ton. The ton dropped to about 7,000 yuan/ton, a huge drop.
Public information shows that palm oil futures tend to weaken under the expectations of long and short supply and demand. Under the background of the new crown epidemic, due to poor transportation, unlimited empty markets, and long-term demand, LDPE prices have fallen again and again, plus Crude oil plummeted, US stocks melted, and LDPE reached its lowest price in the past decade.
In other words, under the double-benefit situation, Blue Moon barely handed in a “flawless” financial report. The “elder brother of laundry detergent” who was selected by Hillhouse Capital did not seem to have submitted a satisfactory report card.
Can’t toss another outlet
The myth of pre-Internet era fast-moving consumer goods seizing the market is nothing more than “precise product positioning + bombardment advertising + high-reach offline channels”. After completing this series of basic operations, Blue Moon sits “Laundry liquid” market leaderchair. Started the “performance art” that tried to lead the industry but frequently “misoperation”.
In 2015, Blue Moon launched a strategic cooperation with JD.com, which intensified the conflict with traditional supermarket retailers. The strategy of self-pricing for rental shelves has not been recognized by retailers, and the offline experience store “Moon Cabin” has not changed consumers’ shopping habits. While successively removing products from supermarkets in various places, the online layout has not worked. Moon’s first “channel revolution” ended in the 2017 reconciliation with RT-Mart.
Even if we look back in 2020, when online revenue exceeded 50% for the first time, the “big retreat” of supermarkets that has since broken the road is not a wise move for Blue Moon.
The channel cannot solve the problem, Blue Moon is ready to change the solution.
In 2015, Blue Moon launched the Supreme Laundry Detergent, focusing on high-end, concentrated, and trying to guide the next upgrade of detergent. The market response was mediocre. “Extreme Laundry Detergent” does not seem to be the answer expected by the market.
Perhaps conceptual innovations require formal changes, and the upgrade in the era of laundry “liquid” may not only be “concentration”.
Almost at the same time as this concentrated laundry detergent appeared today’s popular laundry gel beads. The first detergent to wrap the concentrated laundry detergent in a transparent film was introduced to the Chinese market by P&G as early as 2014. The same Constrained by the traditional concept of washing, consumers did not believe that the cleaning ability of small beads the size of rock sugar can be as magical as the shopping guide advertised. More importantly, the cost is almost several times that of laundry detergent-and these problems are in the blue. The same drama was performed on the Moon Concentrated Laundry Detergent, and it has not been solved yet.
In addition, according to Euromonitor International’s data, the scale of China’s laundry gel beads market in 2019 has exceeded 500 million yuan, with a growth rate of over 110%. It is expected to maintain a high compound growth rate of over 35.8% in the future.
Looking at concentrated laundry detergent, when the major daily chemicals have laid out laundry gel beads, Blue Moon is still stubbornly sticking to the promotion of concentrated laundry detergent. Blue Moon stated in its financial report that in 2021, it will continue to increase its layout in the concentrated washing and care segment, and further consolidate the leading position of the supreme brand in the concentrated laundry detergent market.
The strategy of abandoning laundry gel beads and focusing on concentrated laundry liquid is like the historical reappearance of Blue Moon’s “Great Retreat” in the Supermarket in 2015. The industry leader may be so willful, but consumers may not necessarily pay the bill.
Mu Xiu Yulin
There are few companies in the fast-moving consumer industry that take off on the Internet. Except for the two foreign daily chemical giants, Procter & Gamble and Unilever, almost all domestic brands have completed industrial accumulation in the upgrading of consumption, and Blue Moon is no exception.
Blue Moon, which started in 1992, did not find the way of “detergent laundry” from the very beginning. The first battle that made Blue Moon famous was during the SARS period in 2003. The popularization of the concept of “non-contact” cleaning by Chinese people made ” “Hand sanitizer” entered thousands of households.
Capital paid attention to the rising trend of Chinese consumption earlier than the industry. In 2008, Hillhouse Capital’s chairman Zhang Lei approached Luo Wengui, founder of Blue Moon Group. The domestic laundry detergent accounted for 4% of the market. The blue moon of Ann sees another possibility.
But the Blue Moon has created brilliance and detours. From the “great retreat” of the supermarket, the supreme being left out of the market to return to the top of the supermarket. But the rivers and lakes have changed. Blue Moon, which is struggling to split multiple product lines, is just a “detergent repackaging” approach. It is difficult to tell the brand story of the next outlet if it misses the product upgrade from laundry detergent to laundry gel beads. .
From an objective point of view, whether it is the launch of concentrated laundry detergent in 2008 or the delisting of the main line of supermarkets in 2015, it seems that it is a far-sighted layout, but the times are wrong, no matter how good the model is, it is not the same. trick.
Except for the crown of “Brother Laundry Detergent”, the rest of Blue Moon are dispensable decorations. The daily chemical market, which is surrounded by wolves, lacks core technology as a moat. Under the multilateral offensives of brand strategy, sales channels, and advertising, it is not difficult to create another myth.
Revenue growth has slowed down, market share has been squeezed, newly developed products have no first-mover advantage and design highlights, and the leading position occupied by “laundry liquid” alone can easily be shaken.
The daily chemical product market has low technical barriers and relies on advertising and marketing and channel laying. Blue Moon, which has been in business for many years, has not yet out of its encirclement. It is still unknown whether “Muxiu Yulin”‘s “Laundry Liquid Brother” can avoid the strong winds in the industry.