One Year After Privatization, Unveiling BELLE'S Business Code

Ten years after listing, "a generation of shoe king"

In July 25, 2017, the Hongkong stock exchange was officially banned and privatization completed.

"Reform and pformation are the ultimate goal of privatization of the company."

BELLE International Group CEO Sheng Bai Jiao sent a letter to its employees after privatization. "As a Hong Kong listed companies and blue chip company, I have to hand over my papers to shareholders every six months, so I have to get entangled in current performance and short-term interests.

After privatization, companies can no longer be entangled in short-term performance returns, which can better integrate resources and focus on the most urgent pformation problems that companies need to solve, and strive for long-term sustainable development of enterprises.

Unlike the heroic twilight and other tragically dramas, BELLE's farewell to the Hong Kong stock exchange, the group's revenue still amounted to 41 billion 700 million yuan, and the profit was as high as 3 billion 555 million yuan.

The sum of profits is even higher.

Far from the hustle and bustle of the capital market, BELLE concentrated on reform.

After a year of privatization, BELLE appeared again in front of the media, holding its 73Hours, a luxury luxury shoe brand.

This is no stranger to BELLE. In the past more than 10 years, BELLE has built 16 shoe brands including Millie 's, Tata, Teenmix, Senda and other 3 brands, and has been distributing Nike, Adidas, PUMA and other sports and clothing brands to become the invisible champion of Chinese sports brand.

From a small business to a retail empire with more than 2 self operated shops, what has BELLE been through for 40 years? How did it change in the new retail era? Recently, BELLE interviewed Zhao Ruohong, founder of 73Hours, for a glimpse of the business code of "shoe king Empire".

Light and luxurious layout

"Facing

I am in a very heavy mood at present.

In the last public annual report released on the occasion of BELLE's privatization in June 2017, Deng Yao, BELLE's founder and chairman of the board of directors, had no regrets in his speech.

He pointed out that the current problem of BELLE lies in the fact that in addition to the lack of channel strategy adjustment and the lack of new marketing methods, there are also many problems in the core footwear business, such as the aging of the brand image, the long cycle of product renewal, the lack of design sense and the low cost performance.

After holding 73Hours, the brand will be integrated into a unified business mode after the acquisition. 73Hours will maintain its brand independent operation, but will expand its business with the help of BELLE international channels, supply chain, funds and other industrial chain platform resources.

BELLE told reporters that 73Hours was born in the age of social media, making good use of various new media and means to understand and touch consumers. At the same time, it has a profound understanding of design and quality and marketing.

73Hours, founded in 2015, attracts many young female consumers.

It is constantly appearing in popular TV series "my first half life", "good sir", "love evolution theory", and "gold Secretary why so" and other hot dramas, as well as female star Guan Xiaotong, Xiao Si, Tang Wei and even net Hongbo main Ribas, stone bends, etc.

Zhao Ruohong, founder of micro-blog, shared her feelings in emotion and life in her "Miss Zhao insomnia", and accumulated 770 thousand fans.

"Maintaining brand independent operation is a common understanding of both sides."

Zhao Ruohong told the twenty-first Century economic report.

It is quite similar to the "forming idols" that are currently participating in and promoting by fans. Zhao Ruohong jokes that his 73Hours is also a "development brand". In the age of social media, consumers see brands grow step by step and participate in the shaping of interesting brand personalities.

Such brand image and marketing path are exactly what BELLE needs now.

Sheng Bai pepper said that the new brand is expected to inject fresh perspective and blood into BELLE.

BELLE has been exploring the business boundaries, trying to find BELLE has not yet covered the subdivision area, by working together 73Hours, is intended to open the group's light luxury fashion business.

Inheritance and innovation of "two pioneering"

As we all know, with the reform and opening up, BELLE has developed from a small factory of dozens of people to a shoe empire with annual sales exceeding 40 billion yuan and over one hundred thousand employees.

BELLE told reporters that during the 40 years of development, the most valuable harvest is to actively pay attention to market development and changes in consumer demand, accurately grasp the industry trend, and continue to upgrade in response to changes in the environment.

He introduced that in the early 90s of the last century when the BELLE was founded, when the market was concentrating on the export of OEM, it had the courage to bet on the domestic market and focus on domestic sales.

Later, when the market entered a period of rapid expansion, BELLE chose to open up a direct store network, facing consumers and gaining first-hand insight.

Before and after 2000, with the diversification of consumer demand in China and more people willing to spend their money outside the shoes, BELLE has grasped the rise of sports and leisure needs and entered the sports business.

These forward-looking layouts lay the foundation for every record of BELLE.

With the start of China's economy, BELLE has grasped the huge demand of mainland consumers for quality leather shoes and has become China's largest shoe business.

The sportswear business, which was organized by the group, benefited from the demand of consumers' sports and fitness, and gradually became another leg of group business support. Its sales revenue continued to maintain rapid growth and hedged the decline of some footwear business. It accounted for 54.5% in the end of 2 in 2017.

The impact of the electricity supplier channel and the changes in consumer preferences have plagued BELLE's retail industry.

The growth rate of BELLE began to slow down in 2014.

Although BELLE has taken a series of measures to deal with it, the effect is not very significant.

In the performance meeting, Sheng Bai pepper sighed, "in the past two years, each business performance will be uncomfortable, it is because of a sense of responsibility, so I feel unable to explain".

After privatization, BELLE attaches more importance to long-term goals, and takes technology and digitalization as the direction of pformation.

Sheng Bai Jiao himself continues to perform CEO duties, hoping to play a connecting role.

Deng Yao also said that in order to ensure the evergreen development of the group, it is imminent to launch a strategic pformation in an all-round way.

This is BELLE's "two venture".

Shareholders' strategy under the new retail line

BELLE told reporters on twenty-first Century economic report that it is precisely because of the dual changes in the market and consumers that it is now committed to another pformation, embracing digitalization and new full channel retail.

During the period of BELLE privatization, the new retail outlet was blowing hard, and the Internet giants began to attack the city under the line: Alibaba successively invested in Yintai department store, Suning, Sanjiang shopping, box horse fresh life, Gao Xin retail, incredibly home and so on, while Tencent took the place of Hai Lan home, WAL-MART, Yonghui supermarket, Carrefour, Zhong Bai group, Wanda Plaza and so on.

BELLE's new largest shareholder, Gao Ling capital and CDH, is famous for its consumption, retail and Internet technology.

At the BELLE senior strategy seminar after privatization, Zhang Lei, the founder of the high height capital, praised BELLE's industrial chain and the retail network: shoes are one of the most complex consumption categories in the supply chain.

And BELLE from the top of the leather procurement, production and processing, pportation and distribution to terminal retail, to achieve the entire industry chain coverage, and at the same time operating a dozen different customer groups, different price brands.

BELLE has a daily intake of about 6000000, and online traffic acquisition costs are becoming more and more expensive. When traffic entry is moving from online to offline, BELLE's more than 20 thousand outlets are particularly valuable.

Zhao Ruohong is very impressed by this. She said that the sales ratio of 73Hours is currently 4:6, and the sales volume under the line is increasing by 200% per year.

But every time a new city opens a shop, it will incur high management cost, and the demand for resource integration is higher and higher.

"The upgrading of the retail industry is not a matter of overspending by subsidizing money, which requires a solid supply chain, including logistics, warehousing, financial systems, IT systems, inventory management, and shopping malls.

Some dirty work and hard work should be done conscientiously, otherwise it will be a flash in the net shop.

BELLE told reporters that BELLE relies heavily on the advantages of the group to invest heavily in supporting various kinds of technology empowerment. On the basis of maintaining the independence of the new brand, the brand can develop rapidly from various aspects such as procurement, R & D, production, supply chain, capital and retail operation capability.

BELLE's digital pformation has also continued to fall.

According to media reports, in 2017, the total sales volume of the group exceeded HK $50 billion, and the profit before amortization was over HK $9 billion. Footwear stopped for 3 consecutive years.