With a careless eye, Blue Moon will lose its title of "boss".

With a careless eye, Blue Moon will lose its title of "boss". Written by

/Produced by Lu Mingxia

/Daily financial report

In the past, Blue Moon Group (06993, hereinafter referred to as: Blue Moon) discovered that there was a vacancy in the laundry detergent product market in the domestic clothing care and cleaning market at that time. It coincided with the 2008 Olympic Games boom, so they found Olympic champion Guo Jingjing served as the spokesperson and used a large amount of advertising and marketing to win most of the domestic laundry detergent market share, thus being promoted to the "No. 1 Laundry Detergent Brother".

Blue Moon has thus taken advantage of its first-mover advantage to maintain its leading position in the laundry detergent industry for 11 consecutive years, becoming the well-deserved leading company in the domestic laundry detergent market.

But the current laundry detergent market is no longer what it used to be. It is a red ocean. Blue Moon has also transformed from a scientific research institute into a listed company. Under many variables, Blue Moon’s past strategy seems to be inappropriate in the current market. Investors are not satisfied with the current market. Blue Moon's reaction was also reflected in its falling stock price.

Blue Moon, which has only been listed for half a year, has been going down since it hit a high of 19.16 Hong Kong dollars after listing. As of the close of trading on June 29, Blue Moon's stock price was HK$10.97. Compared with the issue price of HK$13.16 when it was listed on December 16, 2020, it has now been broken for four months.

The annual report was not good. After the stock price fell, the target price was lowered.

Judging from the annual report, it is not impressive. In 2020, Blue Moon's revenue was 6.996 billion (Hong Kong dollars, the same below), a year-on-year decrease of 0.8%, and net profit was 1.309 billion Hong Kong dollars, a year-on-year increase of 21.3%.

However, by category, Blue Moon's personal cleaning care and household cleaning categories have grown rapidly in 2020. Among them, the revenue of personal cleaning and care products in 2020 was HK$836 million, a year-on-year increase of 99.7%; the revenue of household cleaning and care products in 2020 was HK$565 million, a year-on-year increase of 24.5%.

Unfortunately, personal cleaning and care products and household cleaning and care products account for only 11.9% and 8.1% of Blue Moon's total revenue respectively. Clothing cleaning and care accounted for 80%. In 2020, this business achieved revenue of HK$5.596 billion, a 9.4% decrease from HK$6.178 billion in 2019.

In this regard, Blue Moon said that the sales of clothing cleaning and care products have declined because the epidemic has weakened consumer demand for clothing cleaning and care products, and consumers need to maintain social distance, thus reducing outdoor activities.

But this does not seem to be convincing. In sharp contrast, according to public information, the overall sales of laundry detergent on the Alibaba platform in 2020 exceeded 7.7 billion yuan, with sales exceeding 151.5 million pieces+. Laundry detergent sales increased year-on-year. 25.7%, and Blue Moon, which ranks first, has a year-on-year growth of 6%. The industry is not bleak. This obviously cannot support the so-called "reduced outdoor social interaction due to the epidemic, resulting in a decline in sales of clothing and protection."

For Blue Moon, the entire industry is still improving, but its revenue capacity has not increased but declined, which means that its growth will be exhausted in the short term in the future, and the growth of net profit has not restored investors' trust in Blue Moon. Confidence, in the secondary market, the reaction of its stock price to fall reflects investors' attitude towards Blue Moon.

Immediately afterwards, UBS issued a research report stating that based on Blue Moon’s lower-than-expected performance last year, low expected growth in offline distribution business and rising raw material costs, it would lower its profit forecast for 2021 to 2023 by 15% to 26%. At the same time, because Blue Moon's stock price is far inferior to the average performance of its peers and the performance of the Hang Seng Index , and its current price is equivalent to 32.5 times the forecasted price-earnings ratio for 2021, compared with 36 times for its peers, the investment bank has significantly lowered the company's target price from 19.7 Hong Kong dollars to 44.67 % to HK$10.94, and maintained a neutral rating.

With a single product, the status of "the best laundry detergent" is hard to come by.

Backed by the unicorn "harvester" Hillhouse Capital, Blue Moon was born in 1992. Its products mainly involve clothing cleaning care, personal cleaning care and home cleaning care. Large categories, among which the core product laundry detergent launched in 2008 contributed nearly 90% of revenue. With the support of Hillhouse Capital, Blue Moon’s in-depth cooperation with JD.com has enabled it to rank first in the industry in terms of online laundry detergent market share.

In the seven years from 2008 to 2014, Blue Moon relied on laundry detergent to become the brand with the fastest increase in market share, close to Procter & Gamble , which favorably disturbed the market structure and put great pressure on the monopolies.

Blue Moon’s market share in laundry detergent has ranked first for six consecutive years from 2008 to 2013, and its operating income has increased from 400 million yuan to 4.3 billion yuan, an increase of 10 times.

Blue Moon, which leads the daily chemical industry, defeated , Unilever, , Procter & Gamble and other foreign brands with its laundry detergent, becoming the domestic brand with the highest market share in the country. However, Blue Moon's growth has reversed in recent years, and its market share has continued to decline since then.

In 2016, the market share of Blue Moon Laundry Detergent dropped from the peak of 53% to 20.3%; at the same time, the market share of Guangzhou Libai and Naisi Group increased, further widening the gap with them. In 2017, With a market share of 26%, Liby laundry detergent has overtaken Blue Moon. Blue Moon has officially lost in its strong laundry detergent market.

Nielsen data shows that in 2019, Liby 's market share was 21.4%, Naisi's 21.2%, Blue Moon's 18.1%, Omo's 16.3%, and P&G's 12%.

Judging from the revenue growth rate in recent years, Blue Moon's revenue growth rate from 2018 to 2020 is divided into 20.2%, 4.2%, and -0.8%, showing a trend of slowing down year by year.

In fact, the slowdown in revenue growth and the squeeze on market share are related to its product structure being too single. The leading position occupied by "laundry detergent" alone can easily be shaken. In a laundry product market with a wide variety of products and serious homogeneity, if Blue Moon relies too much on a single brand and has limited innovation, it will be difficult to maintain competitiveness in the market and further increase its market share. Therefore, if there is no new focus in the future, it will be difficult for Blue Moon to satisfy the consumer market with its current layout.

Strong enemies are around, and the deployment of game-breaking products is not in place.

"Daily Financial Report" reviewed Blue Moon's past and found that it is not unaware that its competitiveness is declining, but it is just that the "game-breaking" method is "inappropriate" and has not been recognized by the market.

In order to resist the risk of brand decline and meet the diversified clean consumption needs of customers, Blue Moon has tried to broaden its brand lines in the past. It is reported that Blue Moon has invested a lot of resources in the development of concentrated laundry detergent products, and launched the "Supreme" laundry detergent in 2015, focusing on high-end and concentrated laundry detergents, trying to guide the next upgrade of detergents, but the "Supreme" laundry detergent is not what the market is looking for. expected answer.

Blue Moon’s “Supreme” brand of concentrated laundry detergent, priced at 69 yuan, is generally positioned on the high side, and the sales of its series of products rely heavily on marketing activities. In 2018-2019, the company sent a large number of sales personnel to offline stores Promotion. Subsequently, sales of "Supreme" concentrated laundry detergent dropped due to restrictions on offline activities due to the epidemic.

From the perspective of overall laundry habits, although concentrated liquid laundry detergent is a mature concept in some other countries and regions, it is still a novel product for most consumers in China. This shows that China’s concentrated liquid laundry detergent market It is not yet mature, and it is still unknown whether it will be fully accepted to copy foreign products in the future.

In addition, Blue Moon is also left behind by other competitors in niche areas such as sterilization washing, laundry beads , etc. In fact, when it invests its energy in concentrated laundry detergent products, if it does not get the expected benefits, its competitors will focus on other products during the same period, which means that Blue Moon is being overtaken. For example, when laundry gel beads became popular through channels such as Douyin and Kuaishou, Procter & Gamble's brands Bilang , Langqi, Chaoneng, Unilever and other companies immediately launched laundry gel beads products.

Since laundry beads are popular, they have already shown that they have a certain market, and it also proves that laundry beads have a certain positive impact on laundry detergent. According to the "Daily Financial Report", Blue Moon has not yet laid out laundry beads products.Online, according to data from Blue Moon and Liby’s Tmall official flagship stores, Liby’s official flagship store has 1.81 million fans. The best-selling product is laundry gel beads, with monthly sales of 50,000+. Blue Moon’s official flagship store has 1.81 million fans. The store has 2.5 million fans, and its best-selling product is lavender-scented laundry detergent. The price of both products is around 60 yuan, with monthly sales of more than 10,000 yuan.

At present, with P&G and Unilever engaged in foreign wars, as well as Liby and NEX, it is still difficult for Blue Moon to break through. It means that it must not only solve the weakness of the brand moat, but also solve the research and development of products. Lagging behind, we have to solve the weak offline channels. It can be seen that in the fierce track of daily chemical laundry, after Blue Moon relied on capital to take the lead in the first half, it would be overtaken in just one "intermission".