How is the flower of the desert bred?
Editor’s note: This article is from the micro-channel public number “Guotai Junan Securities Research” ( ID: gtjaresearch), author Guotai Junan Light Industry Team.
Traveling to Japan, the stationery store is a place that cannot be avoided.
There are often a few counters in the mall, or a corner of a convenience store. The stationery stores in Japan are four or five floors, and each type of pen and each type of account has a Hundreds of choices.
category not only extremely rich, and Japan’s stationery industry There are also technical and technological advantages that cannot be underestimated.
How much innovation does Japanese stationery lead? According to industry insiders, China will not gradually master the relevant materials and processes until after 2017, and the gap is even larger than that of the semiconductor industry.
Following fupan “History of Japan’s Home Appliances Disappearance”, Guotai Junan Securities Light Industry Research Team tried to find a small but well-known stationery in the Japanese stationery industry and its two giants, KOKUYO and Baile. The representative “Flower of the Desert” industry, the future of development in China.
01 After the war, look at the “money”
In the 1950s, Japanese stationery giant Baile was hit by a competitor’s saturated innovation offensive.
Mitsubishi, with its strong technical reserves, launched the uni series, which was later known to Chinese consumers in 1958, and its superior quality and style created record-breaking consumer recognition.Can be compared with sales, far beyond the expectations of Mitsubishi management.
At the same time, Zebra, the first metal nib in Japan, launched its first ballpoint pen in 1959.
Seeing the wolf smoke, the way to Baile is obviously limited.
In 1959, with the “exquisite writing sense and revolutionary design”, Baile successfully developed the Pilot Super series and successfully started mass production and sales of oily ink marker pens. In the following year, Baile KIKO (now Baile automatic pencil) was established. Factory), continue to expand the production of automatic pencils.
If you can recall the consumption behavior in the stationery store at the school gate, you will understand to some extent the pains of Baile at this time – for long time writers, a pen user The experience greatly determines their day’s happiness.
The high degree of product homogeneity has caused the three major pen factories in Japan to fall into the anxiety and incitement of “winners take all the time”. The product innovation as soon as possible and the shortest possible research and development conversion have become the most The pursuit of reality has even become inertia.
This inertia also pushed some writing tool manufacturers to the end.
For example, Sharp, which once invented a mechanical pencil, was acquired in 2015. The end of its lifetime legend is the financial deterioration caused by excessive innovation from the needs of users.
02 Foam under the sun
After temporarily letting go of Baile, the 1960 KOKUYU has not yet shown the clue of the Japanese stationery national brand.
At that time, the company had just started producing document filing cabinets and introducing the product line into the office scene.
However, until the completion of the Osaka Kokuyo Headquarters Building in 1969, some of them have been directly transformed into “on-site office exhibitions”. All facilities are manufactured by KOKUYO, and customers and visitors can see the actual use of KOKUYO products.
At that time, the world began to see KOKUYO Ambition under the office scene.
In the 1970s, in order to expand the customer base in the office furniture sector, KOKUYO actively engaged in product development, such as display cabinets for art galleries, mobile auditoriums and other special furniture.
Since then, the business scope of KOKUYO has developed into four major areas: paper products, stationery, furniture, and office equipment. The total number of products has exceeded 3,000, and the corporate motto has also been changed to the famous “Kokuyo provides all office supplies.”
In 1972, KOKUYO was listed on the first section of the Tokyo and Osaka Stock Exchanges.
03 Industry policy drivenexplosive growth
Time came to 1985, the Japanese economy relied on software information technology and service industry to achieve rapid development, technology and industrial structure innovation led to about half of people working in the office.
But the industry only pays attention to the production of goods itself, but ignores the improvement of office production efficiency. Japan has begun to be criticized by foreign countries for their development of “sacrificing national life.”
In this case, the Japanese government decided to make “ample and prosperous” one of the themes of the policy, improve the quality of life and expand domestic demand.
In December 1986, the New Office Promotion Committee announced the “New Office Promotion Program”, which demonstrated the need and basic direction for improving the office environment.
After that, the “New Office Guide” was released, and the ideal office form was discussed from three aspects: office environment, office hardware, office design and management.
The new office promotion campaign has also greatly promoted office furniture. And the development of the stationery industry.
Kokuyo seized the opportunity of rapid development in the early stage of the new office promotion campaign. The turnover exceeded 100 billion yen in 1979 to 200 billion yen in 1988, and reached 300 billion in 1991 after three years. The peak of the yuan.
With the economic growth and education dividends and the promotion of the new office culture movement, KOKUYO’s business in the second half of the last century was booming, and the stock price outperformed the Nikkei for a long time.
▼The cumulative excess returns of KOKUYO are significant (relative to the Nikkei 225 Index)
Data source: British fortune, Guotai Junan Securities Research
At this time, no matter for Japan or Kokuyo, there are some dreams that are beautiful.
It’s just the foam in the sun, it’s colored and it’s fragile.
04 After disillusionment after disillusion
In the 1990s, the Japanese economic bubble burst, and JapanThe economics of the last few decades contributed to the “lost twenty years.”
The stationery industry, which was thought to be a weak cycle industry, could not be immune to it, and the economy continued to decline.
The previous education dividends were basically exhausted, the society tends to be low, the domestic stationery market is weak, the small and medium-sized stationery enterprises are bankrupt, and the stationery industry is becoming more concentrated. The stationery brands are seeking differentiation and development.
To live, Japanese stationery companies have to make a choice of “either exist or disappear.”
The national reputation has survived, relying on the price of the people, the wide range of products, and a high market share in Japan.
The choice of KOKUYO is behind a strong sales network. After the Second World War, KOKUYO strengthened the production system and strengthened the comprehensive strength of the logistics and sales network, and gradually formed a sales network covering the whole country. In 1957, KOKUYO had 20 Kokuyo franchise stores in Japan.
Just, positioning the popular product strategy has made KOKUYO a lot of international strategy. The differentiation of local products with other countries is not obvious, resulting in the development and development of overseas markets is less than expected.
Kouyu began to expand into overseas markets in 2003 and entered developing countries such as China and India. However, until 2010, KOKUYO’s overseas market turnover accounted for only 3% of total turnover.
On the one hand, there are local old-fashioned faucets in Europe and the United States, such as Staples and Odi in the United States, BIC in the United Kingdom, etc. In China, because consumers prefer low-end and cost-effective products, they have morning light, effective and true colors. The local stationery enterprises that are in line with the high recognition rate have insufficient demand for such high-end products such as KOKUYO, and even the embarrassing situation of “one hundred years of brand no one knows”.
In contrast, Baile is more long-sleeved in the international arena.
All along, Baile’s research and development of products is concentrated in the field of nibs and inks. A three-point support ball pen is created on the tip of the pen. Compared with the ordinary ball-point pen, the friction area is smaller, which realizes the natural rotation of the ball. The ink continuously improves the erasability of the ink, the paper-free property, and can be used for metal and glass. And ink written on the cloth.
In addition, with its fine craftsmanship in pen making, it also provides good technology for jewelry carving and ceramic molding.
Under continuous innovation, Baile’s business has expanded from pens to all writing instruments such as ballpoint pens and mechanical pencils. The innovation of the whole product line has formed the foundation of Baile’s stable product strength and brand power, and also gave Baile the confidence to go out of Japan’s competition in the international market.
Because of entering the 21st century, Baile has offices in major countries such as Europe, America and Asia. Today, Baile’s sales network has expanded to more than 100 countries around the world.
Japan:
Because of the overall downturn in the writing equipment market, the pilot of the stationery product business is difficult to boost product sales.
Europe:
As the market environment in some countries, including the UK, continues to be challenging, business activity in Europe is generally sluggish, and after a period of sustained growth, European business has stabilized.
Americas:
The overall market sales were strong, and the sales of the Frixion series and the popular G-2 series of ink roller ballpoint pens all increased, and the performance has been good.
Asia:
Bai Le maintains its presence in the Chinese market and is able to promote the sale of pens and P-500, P-700, juice series ink roller pens and other products. Sales in other countries and regions were also very strong on average, resulting in strong overall performance in Asia.
——Excerpt from Baile 2018 Financial Report
▼Bai Le’s overseas market share has increased year by year
Data Source: Company Annual Report, Guotai Junan Securities Research
05 Selection is more important than effort
Today, the integration of the Japanese stationery industry continues.
For example, Yubi Stationery, which once dominated Japan’s one-third market, was unable to find a suitable successor because of the uncertain future of the Japanese domestic chalk market, and eventually sold the company to Korean companies.
In the downturn of the industry and the small and medium-sized enterprises have taken the initiative or forced to withdraw from the market, the top4 share of the Japanese writing instrument market increased from 50.8% in 2008 to 54.6% in 2017.
In the story of the stationery industry, Japan has developed a leading company with a different development path between KOKUYO and Baile: the national reputation is large and comprehensive, and it is the national brand of Japan, but it is also subject to the economic environment of Japan in the later stage of development; Baile is small and beautiful, focusing on high-end pen manufacturing, and the overseas market has brought a strong increase.
in to BOr to C, is to enter the domestic market or embrace the global market, KOKUYO and Baile have given different choices and made their own efforts.
06 Chinese version of the stationery industry story,Going to the climax
The reason why Japan has repeatedly become the focus and research object of Chinese business people is precisely because it has experienced a relatively complete economic cycle under similar social culture and discourse systems.
Frenzy and coldness, hope and despair…we bring a rare reference for us across the sea.
Similar to the asynchronous rhythm of the cycle of home appliances, automobiles and retail in China and Japan, the Chinese version of the story of stationery history is also brewing.
China’s stationery industry is still in a transitional period from rapid growth to maturity, with product categories perfect, but brand concentration is still relatively fragmented.
With reference to the experience of the Japanese stationery industry, we predict that the development path of domestic head enterprises will continue to differentiate, namely:
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B-side office collection relies on policy dividends to bring in category increments, and deep excavation of high-quality customer value through quality service and continuous follow-up;
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C-side retailing leverages quality products to capture channels and achieve integration, continuously improving product strength and brand impact.
The difference is that in the business strategy, the extension of Chinese stationery companies is more exciting.
In October 2015, the domestic stationery leader Chenguang acquired a 51% stake in Shenzhen Erya, which is mainly engaged in the planning of cultural and creative activities. The following year, the Jiumu Sunshine Society was launched. By 2018, there were 115 (directed to 87). Join 28).
In 2017, Chenguang Klip successfully acquired 100% equity of Oudi Office. The customer group of Oudi Office focuses on the middle customer group. It focuses on large foreign companies and private enterprises, and integrates and optimizes to play with Chenguang Branch. The synergy effect of Lipu further enhances the company’s market share and brand influence in the office direct sales market.
In March 2019, Chenguang acquired a 56% stake in Anshuo Culture, filling the gap in the field of color lead.
Another leading company, Qixin Group, is targeting more technical service needs behind the company’s demand for mining.
In 2015, SaaS business began to be deployed. In the same year and the following year, Hangzhou Maimiao and Yinhuan Cloud Computing were acquired in full, respectively, and the supply capacity of cloud video services was further enhanced based on the supply of traditional office collection products. The one-stop platform for office collection has been continuously improved to fully meet the diverse needs of customers in the collection industry.
We believe that domestic stationery leading brands will continue to expand to seize more market share, industry concentration will gradually increase, different companiesMore obvious differentiation development will occur.
For companies that use stationery as their traditional core business, they can upgrade their products and upgrade their appearance and enhance their comprehensive competitiveness, and enhance their brand influence in the industry competition. The blank business in the stationery field can be expanded through the expansion of the road. Head enterprises in relevant sub-sectors will give full play to scale advantages and category integration capabilities.
For enterprises that focus on office collection, the trend of capturing the industry dividend will accumulate sufficient first-mover advantage and customer resources. In the medium and long term, the scale advantage will be gradually obtained through refined management and efficiency improvement, and the quality of operation will be further improved.