Written by Chen Jiying
In 1997, Apple suffered its darkest moment when the company lost $1.6 billion and competitors unceremoniously quipped that “it would be better to close the door earlier and return the money to shareholders.”
But Apple’s management did not give up, and in 1998, the first iMac was launched, which was the starting point of Apple’s counterattack.
Apple is back on its feet, and now it has a market capitalization of $2.45 trillion, making it the world’s most valuable high-tech company.
In 1998, it was also a turning point in the life of “Deep Drift” Zheng Yaonan – this year, he founded Urban Beauty, and rose all the way to the top of China’s “king of underwear”.
But after 2018, with the rise of women’s consciousness, when the trend of women’s underwear changed from “sexy” to “comfortable”, “untimely” urban beauty gradually entered a downturn.
Either sink or counterattack, unwilling Zheng Yaonan, in the second half of 2020, sounded the starting gun, products, brands, teams comprehensive “review”, “secondary entrepreneurship” began.
Now, a year later, it’s time to test the results of reform, has the cosmopolitan beauty come out of the period of shock?
Turn losses into profits and end the shock
It’s not uncommon for companies to fluctuate, but it’s not common to emerge from a downturn.
This taste, Lei Jun tasted. After Xiaomi got out of the quagmire, Lei Jun once lamented, “There is no mobile phone company in the world that can successfully reverse after the decline in sales, except Xiaomi.”
The second entrepreneurship of Cosmopolitan Beauty is even more difficult – in the second half of 2020, when the reform was launched, it coincided with the raging epidemic and the depression and silence of the industry, and Cosmopolitan Beauty was not spared, and its road to recovery was not easy.
After a year of exploration, how are the achievements of the second entrepreneurship of the cosmopolitan beauty? The financial report for the first half of 2021 just released is the assessment yardstick.
Looking at the revenue first, the financial report shows that in 2021, the revenue of Cosmopolitan Beauty in the first half of the year was 1.827 billion yuan, looking at the entire underwear industry, its revenue was the highest in the same period in the industry, and the position of the “first underwear stock” continued to be strengthened; Its year-on-year growth rate of 37.1% is also higher than that of the clothing market, which is 35.06%.
From the specific dismantling point of view, many business modules of Urban Beauty are showing an upward trend.
Among them, the performance of retail business doubled, and the retail business revenue in the first half of 2021 was 878 million yuan, an increase of 108.2% over the same period last year, which means that more C-end consumers “have a heart” for urban beauty, and the user-centered reform has achieved initial results.
Online and offline growth at the same time, of which, in the first half of 2021, e-commerce achieved revenue of 358 million yuan, and the average unit price, gross profit margin and member stickiness increased simultaneously, of which the average unit price increased by about 39% and the gross profit margin increased by about 6.5%.
At the same time, the quality of growth has also improved, which is reflected in the reduction of inventory baggage: the cumulative sell-out rate of products in spring/summer 2021 is about 9.9% higher than the same period last year; The order amount of the Fall/Winter 2021 Order Fair increased by approximately 36.0% year-on-year compared with the Fall/Winter 2020 Order; The inventory structure continued to improve and gradually returned to a healthy level.
The quality and efficiency of growth have improved, and the level of profitability has also begun to rise.
Cosmopolitan Beauty has turned a profit, with a net profit attributable to the parent of 15.113 million yuan in the first half of this year, compared with a loss of about 131 million yuan in the same period last year. In fact, it is not easy to turn losses into profits, from the beginning of the year, raw material prices have been rising, during the reporting period, the average price of raw materials required by the company has risen sharply by nearly 40%, and the terminal pricing of Cosmopolitan Beauty products has not increased accordingly, but relying on the cost reduction and efficiency increase brought by the second reform, Cosmopolitan Beauty’s gross profit margin has not declined, and it is the same as the same period in the first half of last year.
Such a report card is a surprise to outsiders, but for Zheng Yaonan, it is expected.
In July last year, he told the media optimistically, “I think the company is seriously undervalued, but I am very confident about the company’s future growth prospects.” ”
Just like Apple in 1997, it was not favored by everyone, but finally achieved a counterattack, and Cosmopolitan Beauty experienced the pain of entrepreneurship for the second time, carried the dark moment of the epidemic, overcame the pressure of rising raw materials, returned to the growth channel, entered the new normal of profitability, and ushered in a rebirth.
User as anchor, comprehensive renewal
The performance improvement in the report depends on the comprehensive refresh of the urban beauty, not a small trouble, but a makeover.
In the past, the label of Cosmopolitan Beauty was “sexy and beautiful”, but after the second entrepreneurial gunshot, its brand positioning was revised to “practical and comfortable”.
Shifting course, on the other hand, stems from a refresh in the perception of the changes in target groups and needs.
The previous “sexy fashion” was to judge women from a male perspective, and to treat women as objects to be examined. The comfortable, practical, functional positioning is to take women as the main body, take women’s self-feeling as the anchor of product research and development, and carry out precise focusing, with the rise of women’s consciousness, comfort and practicality have also become a new trend of underwear.
After the positioning is clarified, the product transformation also quickly follows – explosive products that are on the verge of launch, evergreen models that continue to sell well, and cross-season models that continue to sell green and yellow, build a multi-level product matrix, making definite growth the norm.
I have always thought that the brand is quite hungry for new products, new products drainage pulls new collectors, but it is not difficult to be new, it is not easy to detonate, according to incomplete statistics, the success rate of new products is only 5%, and the new product curse has always been a nightmare for brand owners.
However, Cosmopolitan Beauty found the code for the new product detonation. In the spring and summer of 2021, Cosmopolitan Beauty launched four million explosive products: since the autumn and winter of 2020, the cumulative orders of dust-free cotton loungewear and sizeless underwear exceeded 1.2 million and 1.8 million pieces respectively in the third quarter; Softheart’s orders exceeded 2.1 million pieces in 2021; Vbra’s Fall/Winter 2021 orders for sizeless underwear increased by more than 120% year-on-year.
The secret of the explosion of new products lies in the healing of the pain points that users hate, and brings the added value that users can’t stop.
Taking dust-free cotton home clothing as an example, it is not easy to stick to dust, not easy to stick to the characteristics of hair, successfully captured the pet family, statistics show that China’s pet population is close to 100 million, dust-free cotton on the market explosion, it is not surprising.
Urban Beauty has also forged the underlying ability to incubate explosive products, which can be reused and transplanted to multiple new product research and development in the future, making it possible to incubate fission-type explosive products from 1 to N.
In addition to product innovation, the construction of omni-channels is also increasing.
Offline is the main channel of urban beauty, and it is also the focus of channel reform in secondary entrepreneurship.
First, store renovation to optimize store efficiency.
In the first half of this year, 373 new stores were added to the offline channel, a year-on-year increase of 297%, and the number of newly opened stores reached a three-year high, and all of them were seventh-generation image stores, of which the average monthly sales of directly operated newly opened seventh-generation image stores increased by more than 20% compared with the old image stores. In addition, 16 shopping center stores also performed gratifyingly, with a comparable increase of more than 60% in their same stores.
In the first half of 2021, the comparable sales of Cosmopolitan Beauty’s direct sales and franchised stores increased by about 23.8% and 10.7% respectively, significantly enhancing its direct operation capabilities. Under the parallel of the two lines, the store network of Cosmopolitan Beauty has covered the core prefecture-level cities in the country, so that Cosmopolitan Beauty has achieved full physical reach to the core user group. Online, the reform direction of Cosmopolitan Beauty is high-quality growth, high-sticky transformation, and multi-channel development.
Among them, traditional platforms such as Tmall, JD.com, and Vipshop have increased steadily, for example, in 2021, 618 Tmall Daxian achieved a year-on-year increase of 15.0%; The new increment of the Jitter Fight platform is also relatively rapid, and the total live broadcast transaction volume of Urban Beauty on the above channels exceeds 38 million yuan; The unit price of members increased by 20.1% year-on-year, the amount paid by members increased by 40.5% compared with 2020, and the 90-day repurchase rate of members increased by 13% compared with 2020.
Online and offline are not binary separation, but a game of mutual integration, and urban beauty uses mini programs as a bridge to empower stores to be “open 24 hours a day”.
Help stores accurately acquire customers and attract traffic, achieve 100% penetration rate of brand direct stores and 62% penetration rate of franchised stores, and everyone can live stream goods.
In summary, through the careful omni-channel construction, Urban Beauty has created a “ubiquitous and ever-present” consumption scene, allowing users to place orders at any time and chop their hands anywhere.
In the construction of user relationships, the gameplay of urban beauty has also changed – not only to do business with users, but also to make friends with users.
In terms of user asset precipitation, Cosmopolitan Beauty members have accumulated nearly 60 million users, and have also successively established an enterprise WeChat community with 1 million users – core members with strong consumption power, high consumption frequency, and greatly reducing the cost of attracting new customers, which is the basic plate to ensure the evergreen performance of Cosmopolitan Beauty.
Emotional marketing that goes straight to the heart ensures that urban beauty and users are always in the “honeymoon period”.
Urban Beauty’s “To the Intimate You” Spring Festival emotional marketing, with a total of 1.23 million participants, 24.42 million interactive behaviors, bringing nearly 20 million write-offs within two weeks of the Spring Festival and converting 43,500 new members; amateur transformation is based on the theme of “working workers, urban beauty after work”, confessing women, through “hot terrier + new product implantation + fan linkage with well-known brands” cross-border cooperation, such as joining hands with Pan Women’s Fang “In the Name of Love” as the theme, Cooperate with Sephora to create urban beauty X Sephora custom music festival makeup, multi-platform linkage drainage and so on.
Through the above-mentioned content marketing that goes straight to the heart, Cosmopolitan Beauty can achieve value resonance and emotional connection with users, so as to become a “national brand” that is close to the hearts of target users.
Practice internal skills, front, middle and background mobilization
Urban beauty can get out of the shock period, and its power is not only in the front end that the user can perceive, but also in the upper and lower should practice internal skills, front, middle and background mobilization.
Konosuke Matsushita, the god of Japanese management, once said, “enterprises are people”, “creating people before creating things”, and the reason why secondary entrepreneurship can be achieved lies in the thorough reflection of the management team, which is inevitable and quickly executed.
For the previous strategic mistakes, Zheng Yaonan himself did not hide it, “Cosmopolitan Beauty has gradually ignored market feedback because she has achieved the first in the industry in the past few years, and the team is immersed in making beautiful PPTs, which does not know consumers as well as in the past.”
And the action is fast, during the epidemic last year, including the management team within Zheng Yaonan, it took a month, and after running the stores in the core business district, they were able to gain insight into the voices of front-line users and clarify the direction of reform.
After finalizing the direction, product innovation, channel remodeling, brand refresh, organizational reengineering and other gongs sounded in unison.
Therefore, urban beauty out of the period of shock, top-down command and bottom-up execution, indispensable.
Second, resolutely launch a comprehensive digital transformation, from supply chain optimization, to R&D innovation, to flexible manufacturing, to front-end consumer operations and services, to achieve full-link digital intelligence transformation, so as to achieve cost reduction and efficiency increase, improve product quality and user experience.
At present, Cosmopolitan Beauty has empowered more than 20 factories to achieve digital and intelligent transformation, which increases the production efficiency of the original supply chain by more than 10%, which takes more than a year, making the lean production transfer switching process greatly shortened, from 7 days to less than 1 hour, and the supply of upstream and downstream raw materials is basically controlled within a 2-hour logistics radius, which ultimately reduces labor costs, improves production stability, reduces material losses, improves comprehensive benefits, and also promotes the evolution and win-win situation of the upstream and downstream of the industrial chain.
At the same time, Cosmopolitan Beauty is also continuing to optimize the supplier team, the management refinement has been greatly improved, and the scale effect has been highlighted.
It is also based on the optimization of the supply chain that in the first half of the year, Cosmopolitan talents were able to digest the pressure of the sharp rise in raw materials, overcome the pain of reform, and ensure the stability of the gross profit margin.
The third is to create efficient and high-quality logistics services – this generation of consumers, more and more can not wait.
To this end, Cosmopolitan Beauty leaned over to do heavy work and hard work, built its own intelligent warehousing and logistics park, and created an exclusive service for the integration of intelligent warehousing and distribution, thanks to this, Cosmopolitan Beauty’s picking efficiency is more than 3 times higher than traditional logistics, and the order outbound is more than 5 times higher than traditional logistics, the fastest 30 minutes, and the full achievement of the same day’s shipping capacity has also opened a precedent in the industry.
The luxury configuration of self-built “logistics park” is rare in the clothing industry, with high investment, long cycle and heavy model, but after completion, it is difficult for players in other industries to quickly follow, just like JD.com, its logistics services have become its underlying competitiveness.
The fourth is continuous R&D investment, with the blessing of hard core technology, escorting the explosion of new products on the market.
For example, dust-free cotton housewear that has won million-level sales has 2 times the anti-static ability of ordinary cotton fabrics, 7.6 times faster water absorption speed than ordinary cotton, and nearly 1.66 times more breathability than ordinary fabrics, and so on.
With the blessing of black technology, the success rate of new products has been greatly improved, and urban beauty does not need to blindly bet on explosive products by adding more new products like other brands. In the first half of the year, Cosmopolitan Beauty boldly reduced product SKUs to obtain economies of scale, and the number of underwear styles and inventory units in the autumn and winter of 2021 fell by about 15.9% and 21.5% year-on-year, respectively, but sales volume and sales did not decline but increased.
In addition, black technology has also allowed Cosmopolitan Beauty to dig deep moats, get out of the quagmire of homogenized competition, and build unique product strength, as of June 30, 2021, Cosmopolitan Beauty has obtained a total of 277 patents: 8 invention patents; 200 utility models; 69 appearance patents, etc.
Therefore, urban beauty out of the shock period, like Apple and Xiaomi, not only by luck, not only on courage, but on a set of effective methodologies and values, as a starting point, urban beauty is returning to the upward channel, re-consolidating the “king of underwear” status.
Horizontally, under the changes in external consumer demand and the reshaping of the internal competition pattern, the current clothing industry is undergoing a major reshuffle, and the renewal of urban beauty has also become one of the typical samples of the transformation and upgrading of Chinese clothing brands.