Resonate with Gen Z! Heilan Home creates a viable national tide and achieved revenue of 13.6 billion yuan in the third quarter

Source: Financial Industry Information

  According to Xinhuanet’s “Guochao Brand Young Consumption Insight Report”, in the past ten years, the popularity of Guochao’s search has increased by more than 5 times, and the post-90s and post-00s have contributed 74% of the national tide consumption. While young people are looking forward to the rise of local brands, Guochao brands are also actively exploring the market. Both factors have jointly promoted Guochao to become a popular economic and cultural phenomenon.

  Among them, the excellent Guochao brand should not simply apply some Chinese elements, but should reflect the unique brand characteristics and cultural attitude. On September 9, 2022, Heilan Home invited Ding Zhenzhuzhu to serve as the experience officer of the “Daofa Natural Landscape and Human World” clothing series, interpreting traditional landscape culture and exploring the value of Chinese culture. Under the interpretation of Ganzi teenager Ding Zhenzhu, the IP series echoes the love of young consumers for the natural freedom, freedom and self-consistency of landscapes, and finds a way for the brand to communicate more easily and continuously resonate with young Chinese consumers.

  This is how Heilan Home constantly tries, refreshes and enhances young consumers’ awareness of the brand, and gradually expands its market share. On October 28, the company disclosed the financial report for the third quarter of 2022, showing that the operating income/net profit attributable to the parent was 13.675 billion yuan/1.749 billion yuan. The gross profit margin was 44.68%, of which the gross profit margin of directly-operated stores was 63.42%.

  According to Euromonitor International data, as one of the top 500 Chinese brands in 2021, Heilan House has ranked first in the market share of China’s menswear market for eight consecutive years. In the 20 years of development, Heilan House has been rooted in Chinese culture and brand genes, and has always maintained strong momentum, keeping pace with the times, resonating with the people, and laying out the grand development of the enterprise.

  Create the soul of the brand with culture as the core

  As the externalization of personality, clothing is the carrier of self-expression and national cultural self-confidence. Heilan House takes Chinese culture as the core of the brand. In addition to continuous product iterations and service upgrades to enhance brand strength and competitiveness, Heilan House is also committed to promoting Chinese classic traditional culture, and continues to explore the integration of Chinese culture and modern clothing. A series of national style products such as “space IP” and “national quintessence IP” have been released, making Chinese culture shine in the new era.

  During the reporting period, HLA cooperated with Lang Jiaziyu, the inheritor of Beijing’s “Mianren Lang”, Yang Xue, the inheritor of Su Embroidery, Li Jing, the inheritor of Tuan Fan, and Wang Yao, the inheritor of Miao batik. Coinciding with the Year of the Tiger, Heilan House integrated the naive and fearless upward attitude of the cute tiger version into the products, and integrated traditional Chinese handicraft culture with the tiger of the zodiac to create the original IP “Tiger and Tiger” series of clothing. He also invited Guochao illustrator Ye Luying to display all the scenes in the painting “Wangshan” in the square inch of the clothing, and talked about the non-legacy tie-dyeing and hanging dyeing techniques to create a series of “Taoism, Natural Landscape and Humanity”. And under the interpretation of brand spokesperson Xu Weizhou, the fashion sense of wearing is presented in a rich scene, showing a youthful attitude, which is very popular among consumers.

  It can be seen that in the strategic line of brand rejuvenation and promotion of Chinese culture, HLA has been showing China’s self-confidence in a comprehensive and three-dimensional manner. The company’s other brands also have inheritance, from the Black Whale x King of Glory x Shu Embroidery co-branded champion clothes, to the HLA PLUS co-branded market blue dye, from OVV and independent designer Qiu Hao to launch mulberry silk series clothing, to Heilan’s selection of refined national quintessence to create Traditional tea set. This brings more confidence to Chinese brands and Chinese people: culture knows no borders, what belongs to the nation is what belongs to the world, and more and more young Chinese people like Chinese culture.

  During the reporting period, the main brand of Heilan Home achieved operating income of 10.350 billion yuan, and the total revenue of other brands was 1.409 billion yuan, a year-on-year increase of 9.21%.

  It is worth noting that Heilan Home has achieved the first revenue in the apparel industry of A-share listed companies for three consecutive years (2019: 21.970 billion yuan, 2020: 17.959 billion yuan, 2021: 20.188 billion yuan), and the company has been for eight consecutive years. Behind maintaining the first domestic menswear market share is the brand strategy of Heilan Home and focuses on Chinese culture and the public.

  Not only that, the 2021 “China’s 500 Most Valuable Brands” report shows that the textile and apparel industry has been selected as 41 companies, of which HLA ranks among the top ten in the textile and apparel industry with 36.915 billion yuan in the brand value list. In this regard, Shi Hongmei, an analyst at Orient Securities, said that with the continuous improvement of the company’s brand power and the signing of new image spokespersons, it is expected that the main brand will maintain a steady recovery trend, continue to move towards the younger generation Z, and enhance the influence of “national brand”.

  Drive digital transformation with innovation as the starting point

  Under the national 14th Five-Year Plan and the promotion of the future 2035 vision, a new round of technological revolution and industrial transformation is booming, and the digital transformation of enterprises is imperative.

  Heilan Home actively responds to the national digital strategy, and uses the power of technology to deploy digital transformation and upgrading: optimize the supply chain management system, update the intelligent clothing production system, build a smart supply chain logistics system, and open up the exchange of brand members… From the production side To the sales side, create a digital transformation template for the traditional clothing industry.

  Since 2020, Heilan Home has promoted the establishment of the offline store CRM system. Up to now, the total number of offline store members has exceeded 23 million, and the entire network has more than 60 million members. Based on a large number of user portraits, the product R&D team of Heilan Home accurately analyzes the average level of consumer products.

  At the same time, the online service of R&D and design of Heilan Home has emerged. The R&D and design digital service platform can improve turnover efficiency, reduce R&D costs, and promote contactless transactions. It brings together many domestic and foreign cooperative designers to provide digital fashion design services. It runs through the entire upstream and downstream chain of clothing enterprises, serving fashion designers, pattern makers, designers and designers. Suppliers, etc. provide full-process digital solutions, opening a new channel for digital transformation of clothing.

  According to the financial report, what keeps pace with R&D digitization is the company’s continuous investment in upstream R&D. The growth rate of Heilan House’s R&D expenses in 2019/2020/2021 is 38.2%/23.06%/49.21%, respectively. During the reporting period, HLA has developed technological innovations such as double-layer graphene technology cotton, far-infrared heating fabric, three-proof aurora goose down jacket, technology antibacterial yarn, seamless technology shirt, cloud denim, and cool technology series. results. Compared with Q3 in 2021, the research and development expenses of Heilan Home increased by 93.75%, breaking the threshold of 100 million yuan in research expenses, and effectively solving the needs of the people for wearing in many scenarios.

  Seeking high-quality development with experience as the goal

  Based on the digital platform, Heilan Home adopts a variety of strategic measures to empower channels: actively explore the “contactless economy” to accelerate industrial transformation; combine online and offline marketing to quickly attract customers and lock customers; optimize enterprise operation processes , showing brand resilience and injecting sustainable potential into development.

  Ding Shijie, an analyst at Guosen Securities, said that the company’s franchise stores are mainly street stores. In recent years, the company’s number of stores has slowed down, and revenue expansion is mainly driven by the improvement of store efficiency. For the next 3 years, the company plans to continue to expand shopping mall stores and set the goal of entering 500 shopping centers, which will help attract more high-quality traffic and enhance the image of brand stores. Open more direct-sale stores.

  According to the third quarterly report, as of the end of September this year, there were 5,781 Heilan Home brand stores, including 897 directly-operated stores, a net increase of 170. As of the end of the reporting period, the gross profit margin of directly-operated stores reached 63.42%.

  While Heilan Home continues to optimize its structure on the brand channel side, its marketing channels also continue to upgrade. The company continued to accelerate the expansion of online sales channels, realized the integration and upgrade of new retail, and increased the proportion of online sales channels. On June 18, 2022, Heilan Home launched e-commerce activities and “Father’s Day” activities. The online sales revenue of “618” increased by 30% compared with last year. In addition, during the two-day “Father’s Day” activities , the company also achieved a 30% performance growth relying on offline sales, setting a new high for holiday sales in recent years, and laying a good foundation for the “E-commerce Double Eleven” marketing campaign in the fourth quarter.

  The new high sales volume is inseparable from the support of digital empowerment and R&D investment. By investigating the shopping methods that young consumers like, Heilan Home is actively creating a sales model that integrates physical stores and e-commerce platforms. The company has expanded the store’s self-broadcasting channels, and added subdivided platform sales channels on the basis of the original comprehensive e-commerce channels to create a complete membership management service, from new product push to event marketing, after-sales service to holiday care, to provide customers with high-quality shopping Experience, enhance user stickiness, and promote the conversion of store private domain traffic. According to the report, the online sales revenue of Heilan Home in Q3 2022 will be 2.137 billion yuan, a year-on-year increase of 9.59%, becoming the company’s new growth curve.

  Brand values ​​+ personalized products + new retail consumption experience together constitute the value precipitation of the Heilan Home brand. It is this kind of value precipitation that allows Hailan House to form its own methodology in 20 years. From the first men’s clothing store in Nanjing to one of the representatives of Chinese clothing brands, the Heilan Home store has always carried the brand’s exploration and expectation of national clothing and lifestyle.