Deng Ruxi Becomes The Chief Executive Of Xinxiuli

Starting from October 1 this year, the world's largest luggage company new beauty International Limited (hereinafter referred to as "new beauty", 1910. HK) will welcome a new chief executive from India Deng Ruxi (Ramesh Tainwala)。

"After taking office, there are no new plans, and we will continue to implement the existing development strategy. We have seen the great effect of this strategy for some time in the past, and there is no need to change it." In an interview with the 21st century economic report, Deng said the biggest change brought about by being the chief executive was "changing the card.".

For new Xiuli, the former CEO Tim Parker is a turning point. When xinxiuli joined the company six years ago, its performance was severely damaged by the financial crisis. Parker started to carry out large-scale restructuring and increase investment in market promotion. In 2011, xinxiuli was listed on the Hong Kong stock exchange. In the first half of this year, its net sales increased by 13.8% to $1105 million, a new record, and growth was achieved in all regions.

Compared with Parker, Deng Ruxi's Samsonite It's even longer. He joined the company 20 years ago. Tainwala group, the family business, has set up a joint venture with new Xiuli, which is responsible for India business. In the first half of this year, new beauty's net sales in India increased by 24.6% year-on-year to US $63.6 million.

"Our core strategy is to rely on our core business. There is still a lot of room for organic growth in our existing business, not only in Asia, but also in Europe, the United States and Latin America." According to Deng, xinxiuli's revenue is expected to double to US $5 billion in the next five years (i.e. around 2020),

　 M & A is just icing on the cake

In the first half of the year, three consecutive mergers and acquisitions showed the new and beautiful development ambition. In April, new Xiuli announced the acquisition of lipault, a young French luggage company famous for its functional and fashionable products; at the end of May, it acquired speck, an American company that designs and distributes thin protective cases for personal electronic equipment. Two months later, it purchased Gregory, a professional outdoor backpack brand, with cash of 85 million US dollars.

"Mergers and acquisitions are like cheese on pasta, but you can't ignore the spaghetti itself, which is our existing core trolley business." Deng Ruxi pointed out, for example, that M & A will not replace the organic growth of xinxiuli itself. "The luggage industry is a very fragmented market. Even if it is xinxiuli, its market share is only about 10%. Without M & A, it has the opportunity to grow to $5 billion (revenue)."

But M & A will still be the other leg of new beauty development. "We want to be more than just a suitcase company, but a luggage company, and suitcases are just one of those products." Kyle Gendreau, the financial director of new Xiuli in charge of M & a development, said that this principle will be the orientation of new Xiuli's M & A in the future, that is, to explore opportunities from the products around the suitcase, but there are no regional limitations.

At present, both lipault and Gregory have begun to contribute to the new beauty, and speck will take time. According to Gendreau, speck is expected to contribute by the end of this year profit But the profit margin level is expected to be lower than that of the core business. Mr Deng added that speck's profit level is expected to be in line with its core business by 2016.

For the next potential acquisition target, Deng Ruxi revealed that it is now more likely to acquire a Korean brand. "South Korea has become the fashion leader of the whole Asian region, and has influence in many countries and regions. Chinese people also love Korean brands more."

New beauty has experienced the influence of Korean brands. New beautiful red, an endogenous new brand launched in South Korea in 2010, has now covered major markets in Asia, including Mainland China, Taiwan, Hong Kong and the Philippines. With the popularity of you from the stars, the golden Xiuxian effect has made the product very popular in Asia, making the sub brand's revenue increase by more than 100% in the past year.

"The response of all markets is very good. Next, we plan to continue to extend it to other South Asian countries, and then to European countries as a" young version of the new beauty "by the end of this year Deng said.

　　 Gold digging Brazil

Although Deng started in the Indian market, the next focus of new beauty is not India, but Latin America.

"Brazil is probably the biggest under developed market for us." Gendreau said that next, new beauty will increase investment in Latin America as a whole, and most of its capital expenditure will go to this market, especially Brazil.

As of June 30 this year, Latin America only accounted for 6.1% of the net sales of new beauty. Among them, the Brazilian business is still in the transitional period. Although the sales volume has increased by three times, it will take time to see the benefits of changing the sales model to direct sales mode.

"A few weeks ago, we just went to Latin America to learn about the market. There were no large-scale department stores. Suitcases were sold through" husband and wife shops ". It's hard to imagine how many such small stores there are." Gendreau pointed out that in addition to establishing and devolving power to the local management team, xinxiuli will also invest in improving its sales network, not excluding the acquisition of some small local retail chains to enhance its retail strength in Latin America.

"There are opportunities in many places, but Brazil is a market that can easily achieve 20% growth and become our next" Asian market. " Gendreau believes that with the support of various measures, Brazil's revenue is expected to reach $500 million next year.

On the other hand, China's mainland market, which accounts for 24% of net sales, still plays an important role. In the first half of the year, affected by the macro environment, xinxiuli's business growth in mainland China slowed down. According to Gendreau, xinxiuli has adjusted its product configuration in the mainland market, reducing high-end products and increasing medium and low-end products, and has seen results.

"China is the fastest growing market for e-commerce business. We have improved the transportation, warehousing process and it platform to promote the efficient development of e-commerce platform." According to Deng, the share of xinxiuli's own online sales channels in mainland China has increased from less than 5% last year to 10% today.

In addition to the two-way delivery plan, Xiuli will be the first to choose from other stores in the mainland after the two-way delivery, or choose from all the new online stores in the mainland.

"In the next three to five years, the revenue contribution of new beauty's own online sales channels may increase to 12% - 15%." Deng Ruxi pointed out.