City Beauty New Brand Positioning Practical + Technology Will Become A Breakthrough Point

City Beauty (02298) broke the cauldron transformation in the unfavorable environment, and achieved breakthrough results. The company's investment value was finally recognized by the market.

It has been noted that by the end of September 11, the share price of metropolitan beauty rose by 47.73% in the month, in sharp contrast to the recent downward trend of the Hang Seng Index.

From the perspective of capital, recently, Zheng Yaonan, chairman of the board of directors of urban beauty, and Zhang Shengfeng, executive director of the company, have repeatedly increased their holdings in the company. Among them, Zheng Yaonan purchased a total of 5.321 million shares of common stock from the market on September 4, September 7, September 8 and September 9, respectively, equivalent to about 0.24% of the total issued share capital of the company.

On August 31, September 1, September 2, September 3, September 7 and September 8, Zhang Shengfeng purchased a total of 6.34 million shares of common stock, equivalent to about 0.28% of the total issued share capital of the company.

At the same time, the city beauty stock has also been sought after by market investors. According to the data of Zhitong finance app, the company's stock has realized net capital inflow for 8 consecutive trading days, and the accumulated net capital inflow in recent 5 trading days has reached HK $5.8295 million.

It seems that the reason why the city beauty shares are popular with the company's executives and market investors is that the company's fundamentals have improved significantly after a year's reform.

In June 2019, Zheng Yaonan issued an internal letter in the company. In his letter, he said that urban beauties should "review" their products, brands and teams and start "second pioneering work".

It is reported that after a full investigation and analysis of more than 59 million active members in the omni-channel, the city beauty will reposition its brand and product in the middle of 2019, return to the positioning of practicality, price beauty and good quality, so as to satisfy consumers in the four aspects of health, comfort, technology and beauty.

Specifically, in order to improve the inventory management ability and fine product management, reduce invalid categories and product lines, reduce the product line by 35%, and focus on exporting evergreen and popular products to the market.

To this end, urban beauty increased investment in research and development, set up Innovation Research Institute, and appointed chief technical officer Tang Qiansheng as president of Innovation Research Institute. By August 2020, the total number of urban beauty patents has reached 164, including 9 invention patents, 136 utility model patents and 19 appearance patents.

On August 25, 2020, the autumn and winter new product release conference of urban beauty 2020, with the theme of "light and warm new experience", released "light + warm" black technology products, "practical + technology" has become the new brand positioning of urban beauty.

It is worth noting that in order to coordinate with the product transformation, urban beauty has also made outstanding achievements in strengthening supply chain management and rapid market response.

At the level of supply chain optimization management, metrobeauty has established rapid reaction production lines for all categories. Through product R & D and supply chain collaboration, reverse customization can be carried out according to consumer demand and seasonal fashion trend prediction, so as to improve production efficiency and reduce inventory risk. At present, the city beauty has achieved 5 to 10 days to provide finished products to the store. According to the data in May and June, the response speed of new products produced by urban beauty supply chain has increased to 30 days, and the sold out rate has increased by 60%.

The average production capacity of Lihua was reduced by more than 60%, and the average production efficiency of qualified workers was increased by more than 60%, and the average production efficiency was increased by more than 30% in the city.

Thanks to the improvement of the comprehensive capacity of supply chain management, commodity R & D and commodity operation, the gross profit rate of urban beauty reached 48.7% in the first half of the year, up 7.6% year-on-year. In the first half of the year, the gross profit margin of franchised shipment was 37.1%, much higher than that of 32.7% in the same period of last year, and the gross profit margin of all major categories increased.

Not only that, urban beauty also focuses on building Omni channel marketing capabilities. In recent years, it has continuously increased its investment in e-commerce channels and Tencent small programs, and through the linkage of online and offline integrated marketing, it has activated the activity of members, enhanced the stickiness of members and improved the repurchase rate.

According to the report in 2020, the e-commerce revenue in the first half of the year reached 382 million yuan, an increase of 18.14% year-on-year. It is understood that in May and June 2020, the total sales of major e-commerce platforms increased by more than 30% year-on-year. During the 618 promotion activities, the sales volume of Jingdong and tmall increased by 150% and 81.16% respectively.

Offline, city beauty has launched the strategy of upgrading its seventh generation stores. By the end of June 2020, about 100 qidai stores have been opened and renovated. It is estimated that about 420 stores will be opened or renovated in the second half of 2020. During the period, 10 shopping center stores with the theme of "family life concept" have been opened; it is expected that 10 shopping center stores will be opened in the second half of 2020.

? ? ? Li Li has been able to achieve the first market share of smart clothing through upgrading its product market share and improving its ability to survive in the market.