Is It True That The Declining Performance Of Urban Beauty Is Due To "Micro Business Impact"?

Underwear brand city beauty after rapid expansion period, this year's performance began to decline significantly.

In August 15th, the first half performance report released by urban beauty showed that in 2016 1-6, the urban beauty realized a business income of 2 billion 211 million yuan, a slight increase of 0.2% compared with the same period last year, achieving a net profit of 174 million yuan, a 35.63% decrease compared with the same period last year.

It is not difficult to see that

We are having a hard time.

While revenue growth is almost stagnant, net profit also slipped for the first time.

In July 18th, urban beauty issued a profit warning, which attributed the decline in performance to China's economic slowdown, micro business shocks and rising operating costs.

"Micro business has affected the supply of our products by generation and commerce, resulting in problems in the supply chain."

Earlier, the city beauty management said in an interview that the urban beauty did not fully predict the intensity of competition from the micro businesses, and the lack of flexibility in the supply chain became the biggest weakness.

What is "micro business shock"?

Domestic underwear market has been developing rapidly in recent years.

According to minmint data, the size of the underwear market doubled to five US dollars in 18 billion years.

The retail value of China's women's underwear market is expected to reach US $25 billion next year, two times that of the US market, and this figure will increase to $33 billion by 2020, according to ou.

Faced with such a huge market potential, the urban beauty has met with the achievements of Waterloo.

"The rapid development of micro businesses during the first half of 2016 has also hit the mass market competitors."

Urban beauty says that the addition of micro businesses has made the market structure reshuffle and the competition is becoming more open.

In fact, as a typical representative of traditional retail industry, the problem of urban beauty is a microcosm of the whole traditional industry.

With the rapid development of e-commerce and micro business, the layout of traditional retail industry is constantly being eaten up.

According to the statistical data of urban beauty, micro business has occupied 10% share of the underwear market.

More importantly, the target audience of urban beauty is consistent with the micro brand.

Since the beginning of brand, urban beauty has locked consumer groups in three or four line cities and county-level cities.

At present, the popular underwear brands in micro business include happy fox, pakti beauty, excellent girl, etc. most of them are seamless underwear with no steel ring. These micro brand brands occupy the market quickly in the three or four line cities with excellent performance price ratio and short time.

On the other hand, urban beauties are well aware of the increasingly prominent strategic position of micro business layout, but they are trapped in their own experience in micro business operation and can not break through in this area.

"Urban beauty attributed the decline in performance to micro businesses, which means that new micro channels occupy more market share, and it is hard for them to get better development in this field."

An industry analyst told "no crowned finance", although in April this year, the city beauty and Foshan City Stone open.

The limited company has reached a strategic cooperation agreement, but it is still difficult to occupy a place in the micro business territory in a short time.

Mode short board frequent occurrence

In the past five years, the urban beauty has been growing rapidly in the mode of "open shop and self built electricity supplier", with net profit rising from 169 million in 2011 to 540 million yuan in 2015, with an average annual compound growth rate of 33.8%. Revenue also increased from 1 billion 656 million in 2011 to 4 billion 953 million yuan in 2015, with a compound annual growth rate of 31.5%.

However, brilliance ended abruptly in the first half of the year.

Compared with the same period last year, urban beauty stores opened 649 stores, but this year they chose 238 stores, the total number of stores dropped to 8371, and the gross profit margin declined from 15.8% in the same period last year to 10.1%.

"Urban beauty plates are increasing, but the market holding rate is decreasing."

The above industry analysts told reporters that the rapid expansion of urban beauty brings the hidden danger of unsalable products.

According to the relevant data, the inventory period of urban beauty in 2013 was about 72.3 days, and increased to 85.2 days in 2014. In 2015, the number of days of inventory turnover in urban beauty dropped to 78 days.

But in 2016, the inventory cycle picked up again.

The urban beauty who suffered from the impact of the micro market has experienced rapid expansion before the product is unsalable, and the product can not be sold as usual. The extension of the inventory cycle makes the turnover period of the enterprise liquidity increase, and the funds can not be returned in time, resulting in a sharp fall in the performance of the urban beauty in the first half of the year.

At present, China is in the economic structural pformation and consumption upgrading nodes, and the demand for consumers has changed rapidly.

Faced with the sudden change of market demand, the lack of flexible supply chain of urban beauty appears to be "bulky".

Reporters learned that, in the first half of this year, the market demand for brassiere without rims and steel rings increased significantly, and such products sold through micro channel channels increased significantly. The number of bra suppliers with no scar and no steel ring was relatively small, resulting in a serious lack of such products for urban beauty, which greatly affected their performance.

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Industry breakthrough point

Although many industry analysts are still optimistic about the future development of the underwear industry, it is undeniable that last year many listed companies with underwear as their main business met with their achievements in Waterloo.

Hui Jie shares semi annual report shows that the first half of the company achieved operating income of 1 billion 1 million yuan, an increase of 7.92% over the same period, but the net profit attributable to shareholders of listed companies was 120 million yuan, down 5.61% compared to the same period last year.

In the middle and high-end underwear market, Fang Li Fang, a recent profit warning, also showed that the overall sales of the company fell by about 18% over the same period last year, while the sales of the same store which operated for more than 18 months also dropped by more than 10 percentage points.

In fact, the underwear industry has been in fierce competition.

There are more than 3000 brands and manufacturers, and there is no single company.

Retail sales account for 3.3% of the total market share in 2015, according to the data given by urban beauty.

Guoxin Securities Research Report shows that China's domestic underwear market structure is scattered, many products, but 99% of the brand sales scale of less than 100 million yuan, sales scale of more than 1 billion yuan brand is very few.

"Underwear market in China has been in a low level of competition for a long time, that is, concept wars, star wars and price wars have made many enterprises overdraft in cruel market competition, and the decline in corporate profits is also expected."

The above industry analysts said that on the surface, the decline of the traditional underwear brand performance is influenced by the environment and the impact of the micro channel, but the deeper reasons come from the brand's own problems, including quality and safety, brand marketing and so on.

Under such circumstances, many enterprises are actually facing the turning point of business pformation.

It is particularly important for us to find a breakthrough in this round of industry adjustment.

Middle and high-end market or breakthrough

The increasingly mature consumption concept of domestic consumers is affecting the pattern of underwear industry.

According to the report on the trend of lingerie consumption released by the first financial and business data center, there is a clear gap between the consumption habits of domestic clothing and the developed countries. In terms of personal clothing consumption, domestic expenditure per capita is only about half of that of developed countries.

It is expected that in the coming years, with the accelerated maturation of people's consumption concept and the expansion of women's underwear market, the gap will soon shrink.

In 2015, the city beauty bought Ordifen's underwear brand named high-end market in March for 92 million yuan, announcing its entry into the high-end underwear market.

"Women's underwear is being given away from the connotation of practicality. From traditional functional consumption to emotional consumption, the promotion of purchasing power and the enhancement of brand awareness have prompted more consumers to move towards the high-end market."

The above industry analysts explain, but the urban beauty has always been the middle and low end market as the starting point. How to reverse the public's impression of the brand has become the most important issue that lies on the road of urban beauty pformation.

And this worry is also reflected in the data.

After four months of acquisition, the city beauty turned the business into a profit. In 2015, the China Daily reported that Ordifen realized 19 million 262 thousand yuan in revenue and a net profit of 1 million 80 thousand yuan.

According to the data released by the urban beauty announcement, Ordifen's sales in 2013 were 372 million 600 thousand yuan, losing 27 million 320 thousand yuan, and in 2014, it was 329 million yuan, with a loss of 14 million 580 thousand yuan.

However, in the first half of this year, Ordifen contributed about 162 million yuan in sales, although its revenue increased, but net profit still lost 5%-10%.

After this round of industry adjustment, with the continuous integration of the market and the survival of the fittest, the market concentration will increase to a certain extent in the future. The industry analysts said, "underwear industry should have a shuffle, and there will be 3-5 brands that dominate the market share in different underwear categories."