Track Without Price Anchor

Blue moon group (06993. HK), which won the champion of domestic "detergent" sales in 11 years, landed in Hong Kong stock market in December 2020.

Its first financial report after listing encountered "Waterloo".

Not long ago, blue moon issued a profit warning: it is estimated that in the first half of 2021, shareholders should account for a comprehensive loss of about HK $44 million, compared with the profit of HK $302 million in the first half of 2020.

"The above losses are mainly due to the surplus of low-cost products on the platforms of non corporate customers in the market, resulting in the interference of the company's pricing strategy and the price system of products in the market.".

Blue moon is really eager to give an explanation to convince the market.

For example, "for the purpose of uniform product pricing, blue moon offers its customers a number of discounts, which have a negative impact on its gross profit margin in the first half of 2021 by about 9%"“ In the first half of 2021, some "supreme" brand concentrated laundry detergent returned in 2020 were bundled with other products and sold at a discount price, which had a negative impact on the gross profit margin of 1%.

From 2017 to 2020, blue moon's overall gross profit margin increased year by year, from 53.2% to 64.5%.

According to frost Sullivan report, in 2019, the five major clothing cleaning and care companies accounted for 81.4% of the domestic detergent market, of which blue moon ranked first with 24.4% market share.

How much trouble does a bottle of washing liquid cause?

Since the listing of blue moon, it has fallen by 60% in half a year. After landing in Hong Kong stock market in December 2020, the total market value of blue moon once exceeded HK $110 billion, but it has been declining all the way. By the end of August 4 this year, the total market value of blue moon was HK $40.8 billion, at HK $6.97/share.

Price war is raging

According to the investigation of 21st century economic report, there is a strong "price war" atmosphere in the detergent market both online and offline; And online and offline prices appear "disorder" characteristics; The leading institutions do not have the ability to formulate the industry "price anchor", and the quality echelon between different brands is still very vague.

These factors, with the blue moon disclosed the performance decline, the reason seems to be consistent.

For example, in a large Lianhua Supermarket in Gongshu District of Hangzhou, the reporter of 21st century economic report found that blue moon and super power detergent of naeus group occupied the most significant sales positions; The competition targets include Bilang, tide, Donnie, Unilever's mysteries and wellness's wellness brands.

In terms of unit price, the lower price is P & G's brands, such as dangni light powder Cherry Blossom two in one laundry liquid, equivalent to 14.25 yuan / kg; In addition, the price of P & G's Bilang machine wash long-term antibacterial detergent is 50.9 yuan / 3.8kg, equivalent to 13.39 yuan / kg, which is lower; Another brand of "she Shu" antiseptic and acarid laundry detergent has a discount price of 10.63 yuan / L.

Blue moon does not have an absolute advantage in the price of the supermarket: the most common "blue bottle" blue moon laundry liquid, equivalent to 18.63 yuan / kg.

Its online and offline price disorder is very significant.

From the perspective of online channels, the blue moon tmall flagship store, under the background of the 88 member Festival, promotes the combination package of 118.9 yuan / 8kg, less than 15 yuan / kg; In pinduoduo blue moon Jiaqing exclusive store, the total sales volume of blue moon laundry detergent is 94000. After receiving the coupon, the price is as low as 21.9 yuan / 2kg, equivalent to 10.95 yuan / kg, which is even more eye-catching.

This phenomenon is also very significant in other brands.

This also shows that the price fluctuation of blue moon's same product on different platforms is quite different, and its price system is disturbed and sniped, thus affecting the company's profits.

Although blue moon did not name which "non company customer platforms have surplus lower price products", some e-commerce and community group buying platforms launched a large number of subsidies and discount promotions, which indeed lowered the prices of relevant products.

This is obviously related to the pricing atmosphere of the whole industry.

On August 3, a person from a listed company in East China who arranged laundry products business told the reporter of the 21st century economic report that "the price is on the one hand. In addition, the detergent business attaches great importance to marketing, so it is difficult to develop the market without advertising, and the industry competition is extremely fierce."

How to break the laundry business

In 2020, blue moon will realize online sales of HK $3.774 billion, which will further increase to 53.9%.

It can be seen that the price system of online laundry detergent and clothing auxiliaries is of great importance to blue moon's profit.

According to the reporter of 21st century economic report, "laundry business" is the cause of loss, but it is still the key point of its strategy.

Blue moon began to provide laundry service at the blue moon washing center in Guangzhou in July 2012. In September 2016, the laundry service was upgraded and the supreme laundry application was established; In June 2017, blue moon also started to provide laundry services for its business partners.

According to its prospectus, blue moon provides these services to about 50 corporate partners, mainly media companies, car dealers, financial companies, law firms and hotels.

In 2017, 2018 and 2019 and up to the first half of 2020, the revenue generated by blue moon laundry service was HK $1.1 million, HK $2.3 million, HK $2.7 million and HK $0.8 million respectively.

However, in this profit warning, blue moon expects a loss of HK $67 million in laundry services in the first half of 2021.

Why there is such a big performance contrast, blue moon has not given the market answer.

At present, blue moon is still determined to provide laundry service.

Blue moon plans to set up a number of washing centers throughout China to provide large-scale professional laundry services to consumers. It plans to open five washing centers in Guangzhou, Tianjin, Chongqing and East China. It is expected to start construction in the first half of 2021 and complete in the first half of 2025. The total investment is HK $312.3 million. It is expected to achieve balance of payments in 3-4 years and recover investment in 7-8 years.

From the perspective of institutional attention, in July this year, Guojin securities research paper still gave blue moon a "buy" rating; Due to the semi annual report of losses in 2021, BofA, Daiwa and HSBC have successively lowered their ratings on blue moon.

Since the listing of blue moon, it has fallen by 60% in half a year. After landing in Hong Kong stock market in December 2020, the total market value of blue moon once exceeded HK $110 billion, but it has been declining all the way. By the end of August 4 this year, the total market value of blue moon was HK $40.8 billion, at HK $6.97/share.

As early as November 30, 2010, Hillard capital invested 45 million US dollars in blue moon; According to the 2020 annual report, Hillhouse's HCM fund holds 534.5 million shares of blue moon, with a shareholding ratio of 9.3%.

At present, due to the fact that the interim report has not been disclosed, it is impossible to know the specific operation of the company in the last half year.

Crisis of Shanzhai products flooding

Lack of industry standards and technology moat, a direct impact is the proliferation of Shanzhai goods.

According to the reporter of 21st century economic report, blue moon is also constantly investing in response measures in this regard.

The proliferation of Shanzhai products has become one of the hidden dangers of its performance growth.

Fake "blue moon" flows into many places in Beijing and Hebei, "how to distinguish the authenticity of blue moon laundry liquid?"

Enter "blue moon" on the search engine, and you can see such titles everywhere.

According to media reports, on July 17, Anhui Province Huangshan City market supervision comprehensive administrative law enforcement detachment seized 205 cases of counterfeit blue moon laundry liquid at a logistics transfer station next to Beihai Road gas station in Tunxi District, Anhui Province, according to a report from the general agent of Huangshan blue moon detergent.

In addition, on June 26, 2019, the inspection team of Zhuozhou Market Supervision Bureau sealed down the wholesale dens in TASI village and seized more than 300 cases of laundry liquid and soap of various brands including "blue moon" and "JinFang". Among them, the counterfeit "blue moon" 3 kg Lavender bright white Zengyan detergent sold for only 20 yuan per barrel, The price of the same "blue moon" laundry liquid in supermarkets is almost double, ranging from 39.6 yuan to 46 yuan.

The 21st century economic report reporter inquired the judicial document website and found that blue moon, as the plaintiff, frequently attacked the trademark infringement of relevant parties through prosecution, involving supermarkets, non-staple food business department, Hualian Shopping Center, etc.

According to the first instance civil judgment of Fuzhou intermediate court of Fujian Province disclosed in May, 2020, Guangzhou blue moon Industrial Co., Ltd. found that the "blue moon" brand hand sanitizer sold by Wanyi convenience store in Shangjie, Minhou County, was not produced by its company and its authorized company, but was a counterfeit registered trademark commodity, requiring it to stop selling related products immediately, And compensate the corresponding economic losses.

The court ruled: Wanyi convenience store in Shangjie, Minhou County immediately stopped selling goods infringing the exclusive right of "blue moon" registered trademark No. 7613055 of Guangzhou blue moon Industrial Co., Ltd., and compensated the economic loss of Guangzhou blue moon Industrial Co., Ltd. (including the reasonable expenses for stopping the infringement) of 8000 yuan.