Written by / Chen Chang
Editor / Sun Chunfang
Xiao Zhan’s popular massager company was relaxed and began to develop the idea of offline manual massage.
On the evening of October 17th, Beichuan released an announcement that it intends to guide potential target users to enter the store for experience by adding manual massage items in directly-operated stores.
Founded in 2000, Bilibili was listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange in July 2021, and declared itself as the “first stock of healthy intelligent hardware” on the Science and Technology Innovation Board. In the eyes of investors, Beichuan has two major characteristics. One is that it is good at marketing with a lot of money. In 2020 before its listing, the company’s annual revenue was more than 800 million yuan, and the sales expenses cost 340 million yuan; the second is that customers mainly come from airports and high-speed railways. , business travelers in shopping malls. From 2018 to 2020, the direct sales model revenue in these occasions accounted for more than 60% of offline channels.
After the listing, Beiqiong did not continue its previous excellent results, and its revenue and profit declined. SKG, a peer of the company and famous for its cervical spine massager, also encountered the same predicament. The launch of the manual massage business this time is a major drainage attempt after the business model encountered a bottleneck.
Figure / Times Easy Official Weibo
The star effect fails, making it easier to increase revenue and reduce expenditure
In the eyes of most investors, Bilibili is a typical marketing-driven company.
According to the financial report, from 2018 to 2021, the sales expenses of Beiqiong have repeatedly hit new highs, respectively 183 million yuan, 287 million yuan, 342 million yuan, and 485 million yuan, with a sales expense rate of about 40%, exceeding the industry average.
Opening the official website of Beichuan, the image of the spokesperson Xiao Zhan came into view. This is the spokesperson hired by the company in May 2021, aiming to cater to the preferences of young people. When you open the comment area of the flagship store, you can find that many consumers are coming for Xiao Zhan.
Before that, Beichuan was the designated massager in Hunan Satellite TV’s variety show “Longing for Life”, and its products were embedded in popular variety shows such as “Sister Riding the Wind and Waves”, “Exciting Offer” and “I Am a Singer”.
The most special way of playing is to capture the traffic of the special occasion of the airport. As of the 2022 interim report, the company has opened 174 directly-operated stores nationwide, covering airports, high-speed rail stations, and mid-to-high-end shopping malls in Beijing, Shanghai, Guangzhou, Shenzhen and other cities. Among them, the mall stores cover 4 first-tier cities, 13 new first-tier cities, and 16 second-tier cities across the country, and the transportation hub channels cover 24 airports nationwide with a passenger throughput of more than 10 million person-times/year, and 12 passenger traffic exceeds 10 million. Passengers/year of high-speed rail stations.
Jiang Han, a senior researcher at Pangu Think Tank, once analyzed the “Financial World” Weekly when the company was listed, and said that for most people, it is not necessarily a matter of whether massage is a just-in-demand service. In this case, offline consumption channels are very important, because reaching consumers offline may lead to impulsive consumption.
From 2018 to 2020, the proportion of offline channel revenue contributed by airports and other mobile personnel to Beiyi easily accounted for 57%, 54% and 42% respectively, and the gross profit margin of this segment was as high as 50%-60%.
In 2021, Beiyi easily achieved revenue of 1.19 billion yuan, breaking the 1 billion mark in one fell swoop. But under the gloss, bad signals began to emerge in the last quarter of 2021. In the quarter, its revenue growth rate fell from 60% in the previous year to 24%, and its net profit fell by more than 34% to 25 million yuan. By the first quarter of 2022, net profit will drop directly to negative value, and the loss will continue to expand in the second quarter.
“Because of the repeated outbreak of the new crown epidemic, the consumption demand of offline channels has weakened, and the passenger flow of transportation hubs has declined significantly, which has caused great disturbance to the operation of offline stores.” Beichuan explained.
Times Easy Net Profit, Figure/Oriental Fortune
In fact, there are also views that the slowdown in the growth rate of Beiyiyi’s revenue is because young people are becoming more and more aware of rational consumption. For a while, the topic of “Beichan’s products cost 300 yuan and the price is as high as more than 1,000 yuan” has been on Weibo’s hot search, and whether the issue of IQ tax has caused widespread controversy.
Under various factors, Beiyi easily implemented a number of measures to boost its performance, one of which was the offline manual massage business. In this regard, the relevant staff of the company told the “Financial World” Weekly, “Beijing takes the route of ‘Traditional Chinese Medicine X Technology’. In some offline stores in the Shenzhen headquarters, professional TCM teachers will be invited to give TCM lectures and TCM salons. , and recommend suitable products for consumers according to the right medicine.”
That is to say, this move is not to say that Beacong will directly rely on manual massage to charge, but a service added to increase the willingness of customers to place orders.
Of course, Bilibili is also making other sources of income and throttling.
As of the first half of 2022, the company has closely followed market demand, increased investment in research and development, and launched a variety of new health and smart hardware products, including See 5R Mermaid Tears Smart Eye Moisturizer, No. Moxibustion box, Neck 5 neck massager that can play music, etc.
In 2021, new products accounted for 19.89% of the company’s main business revenue, and in the first half of 2022, this figure rose to 30.92%. Among them, Jiang Xiaozhu moxibustion box series became a “super single product” on Tmall platform during 618 this year, with 12,000+ pieces sold.
At the same time, in order to get rid of the predicament of single offline revenue, Beiyi easily accelerated online marketing through cooperation with JD.com and Tmall, and the scale of online revenue increased from 431 million yuan in 2020 to 683 million yuan in 2021. , an increase of 58.44% year-on-year, and the proportion of online revenue to main business revenue in 2021 will increase to 57.50%.
“Financial World” also noticed that Beichuan is also reducing the number of directly-operated stores, cutting off some transportation hub stores with a high proportion of rent and poor performance, and replacing them with more asset-light franchise stores.
An investment recruiter told Caijingxia Weekly that the company began to join in the second half of this year. According to the financial report, within the half year of 2022, Beiqiong will open 23 new offline direct stores, optimize and adjust 34 stores, the number of new stores is less than the optimized number, and 28 offline franchise stores will be opened.
Net red massage instrument collective change
The problems that Beiyi easily has, also exist in its peer SKG. One year after the listing of Beiqiang, the parent company of SKG Future Wear Health Technology Co., Ltd. submitted a prospectus to the Shenzhen Stock Exchange Growth Enterprise Market.
SKG was established in 2007, and only entered the field of massage instruments in 2016. Three years later, it became the double-material sales champion of Jingdong Taobao. The revenue from 2019 to 2021 reached 792 million yuan, 991 million yuan and 1.060 billion yuan respectively; Net profit was 213 million yuan, 143 million yuan and 131 million yuan respectively.
There are many similarities between SKG and Bilibili. Both products are mainly aimed at young users and have similarities in endorsement and marketing channels.
The spokesperson chosen by Beichuan is Xiao Zhan, SKG has signed Yang Yang and Wang Yibo successively, and SKG has also cooperated with variety shows, sponsoring “This is Hip-hop” and “Sister Riding the Wind and Waves”, and put a lot of money on platforms such as Xiaohongshu and Douyin. advertise.
Both of them are also relatively stingy in investment in research and development. From 2019 to 2021, the ratio of R&D to revenue was 5.86%, 4.46% and 3.97% respectively, while SKG was 2.87%, 4.76% and 7.05% during the same period. SKG listed innovation risks as the first in the prospectus, “The company has achieved certain innovation results in the field of health wearable products. If in the future business development process, it cannot continue to maintain research and development innovation and develop new products to meet the needs of the terminal. The rapidly evolving needs of consumers will expose companies to the risk of under-innovating their market competitiveness.”
It is worth mentioning that SKG’s explosive product strategy is more successful than that of Beiyi. Among the major series of head and neck massagers, the sales of neck products are the best, but they will only account for more than 300 million of the revenue of over 1.1 billion in 2021. However, SKG’s revenue mainly depends on the single product of cervical spine massager, which accounted for 74.19% of the total revenue in 2019, and increased to 86.67% in 2020, with a sales volume of 4.7108 million pieces.
But one move has not allowed the company’s performance to escape the downside risk. The company’s revenue is growing, and its net profit is declining year by year, with a year-on-year decline of 38% in 2021. In the same year, the sales volume of cervical spine massager products fell by 14.02% year-on-year to 4.0504 million pieces. In this regard, SKG explained that it was mainly due to the intensification of market competition.
In 2022, SKG decided to carry out a strategic upgrade, taking pain management, chronic disease monitoring, and sleep rehabilitation as the three major strategic directions, continuously extending new areas, and building a complete set of solutions for life and health problems.
In order to increase the unit price of customers, SKG has launched a price increase strategy. In 2021, the unit prices of cervical spine massagers, waist massagers and eye massagers will increase by 1.04%, 157.12% and 7.1% respectively.
Taking the waist massager as an example, “Financial World” weekly inquired about the Tmall flagship store. The cheapest BW3 is priced at 499 yuan, and this year’s newly launched W7 is priced at 799 yuan. In terms of sales, the former sells 1000+ per month, while the latter sells 900+ per month.
In response to the price gap, according to the product description map sent by the customer service, compared with the BW3, the W7 has increased from 4 to 6 massage techniques, the hot compress method has changed from red light to graphene, and the control method has increased APP control, weight and weight. It is halved, and the material is changed from PC massage sheet to graphite massage sheet.
According to the relevant report on the development trend analysis of China’s small massager industry released by Guanyan Report Network, as well as data from the Ali platform, the market size of my country’s small massager in 2020 is about 3.24 billion yuan; by 2021, it will grow to 9.07 billion yuan, a year-on-year increase. The speed is as high as 178%.
Although the market size of small massagers has shown super-high growth, as of 2021, the market penetration rate of small massagers in my country will be less than 10%. The market share of Beiqiong + SKG exceeds half of the industry, while the share of other brands such as Oaks, Dema Sherajian, and Pangao has the characteristics of low and large fluctuation.
A practitioner told Caijing World Weekly that blindly marketing will only increase costs, and ultimately add to the price for consumers to pay.
He believes that companies do not necessarily have to hold on to young people. According to public data, by the end of 2021, the number of elderly people aged 60 and above in China will reach 267 million, accounting for 18.9% of the total population. It is estimated that in 2057, China’s population over the age of 65 will peak at 425 million, accounting for 32.9%-37.6% of the total population.
Therefore, “it is also an option for massage instruments to go to the elderly group.” The above-mentioned person said. But he reminded, “Returning to the product itself is the only way out for businesses to survive.”