Text | Wu Lingwei
Editor | Si Wen
Paper towels are always the hottest products on affordable e-commerce platforms.
They often appear in the product flow on the homepage, with sales of more than 100,000. 4.25 yuan or 5.9 yuan. You can only buy a pack of paper towels offline, but you can buy them online. Merchants always use brightly colored fonts to mark "one box lasts for one year", "large quantity and durable" or "less than 5 cents per pack", emphasizing either their hoarding attributes or their ultra-low prices.
Just like fruits and eggs, paper towels have become a weapon for major e-commerce companies to knock on the door of sinking markets due to their rigid demand, high frequency, and easy consumption.
When urbanites use cotton soft tissue and cream paper in extremely segmented consumption scenarios, the broader rural market has achieved consumption upgrades in household paper. Many novels describing rural life in China in the 1960s and 1970s mentioned scenes of using straw to solve toilet problems. But in 2020, when the country is fully prosperous, affordable paper towels on e-commerce platforms are also used in the rural market.
It is difficult to say which link changed first, but the cultivation of rural paper culture, the increasing production capacity of factories, and the introduction of paper towels factory goods by e-commerce platforms in order to penetrate the sinking market promote each other and jointly promote the growth of China's paper towel market. It will expand to 140 billion yuan in 2020 (data from Euromonitor International).
"Cannot be sold south of the Yangtze River"
Zhang Bo of Baoding is the second generation of a factory. In 2011, he took over the Golden Leaf Paper Products Factory, which his father had established for two years.
Like his father’s generation, Zhang Bo always runs agents everywhere offline. In an era where offline is king, agents who control the retail channels of supermarkets and supermarkets almost determine how big a manufacturer’s business can be.
Where to sell paper towels and how much to sell all depend on the ability of the agent. In Shenyang, where agents are strong, Golden Leaf can be found on the shelves of local supermarket chains, but in nearby Shijiazhuang, weaker agents can only let their tissues be placed in mom-and-pop shops. If you want to place it in a better position on the shelf, Jinye has to pay a high " entrance fee " to the supermarket.
Although paper towels are not heavy, they are "bubbled" and bulky. In addition to the entry fee, long-distance logistics is not cheap. When the four major paper towel brands of Heng'an Group , Vinda International, Golden Hongye, and Zhongshun Jierou occupy half of the market, the remaining regional brands and small brands can only rely on price to make a difference. In order to maintain its price advantage, Jinye's main markets are locked in North China, Northeast China and Northwest China, making it difficult to sell paper towels across the Yangtze River.
Fast-moving consumer goods, including paper towels, have more exposure and become more famous. The four major paper towel brands not only came to market with a small paper towel, but they are also good at laying out offline channels and marketing. Hengan Group relies on more than 3,000 distributors to sell its brands to millions of stores across the country. Xinxiangyin, a subsidiary of Hengan, placed a large number of advertisements on CCTV around 2005, making a generation remember the slogan "Use Xinxiangyin to suck up the sea water, and Taiwanese children can come and play." . Vinda started advertising earlier. Founder Li Chaowang insisted on "advertising even after selling underwear." When it entered the Hong Kong market, it inserted advertisements into TVB dramas and spent more than 6 million yuan to hire fat sister Shun Dianxia to be the spokesperson. .
When the golden age of television has passed, e-commerce platforms have a more direct impact on consumer choices. Since 2018, bamboo pulp paper has become popular on e-commerce platforms with the slogan of "authenticity" and "environmental protection", making the bamboo-rich Sichuan-Chongqing paper products industry belt popular, and also making local science, culture and plant care become One of the most representative manufacturers.
But at that time, few southerners understood the reputation of Baoding’s paper towel industry.
Factories and production areas that have been digitally transformed
Baoding is not only home to donkey meat burning and serious literature, it is also one of the top paper products industry belts in the country. Today, more than 200,000 orders for paper products are issued here every day, and a large part of the household paper used by people across the country is contracted.
Zhang Bo has relied on traditional retail channels for 10 years.In order to break through the sales bottleneck, he moved his factory brand to Tmall in 2019, and added Taobao Special Edition the following year.
Zhang Bo said that he went to Tmall to bring his factory out of North China and went to Taobao Special Edition because he was attracted by C2M and the concept of "digital factory".
Jinye, which once contacted consumers through agents and retail channels, is far away from the market. Although agents and customers will continue to report to the factory which products are more popular in the market, in Zhang Bo's eyes, the faces of those consumers remain the same. Blurred. C2M, which represents "consumers directly connected to factories," gave him an idea of who the people who eventually bought his own paper towels were, where they came from, and which products they liked to buy at different prices. When
first joined the Taobao special edition, Jinye used ready-made products for testing. Now, based on user preferences, it has specially developed packaging with different specifications from offline ones - offline packs of 400 sheets of tissue paper are wider, Online consumers are more interested in the specifications of 50 packs, 6 packs or 10 packs.
The most important thing is that with the support of e-commerce data, small manufacturers can respond faster.
Cream paper, which became popular in Japan, is still quite niche in China. Because the surface of this paper is sprayed with cream, it is soft and expensive, and is suitable for rhinitis or pollen allergy patients who always blow their noses. A report from Great Wall Securities shows that Jierou may be the first to launch cream paper in China, but neither Vinda nor Hengan has launched this product yet. Instead, small and medium-sized manufacturers including Jinye are following this trend.
"To judge the strength of an enterprise, we don't just look at how much it can produce, but more about whether it can meet the requirements of different customer groups when serving them." Zhang Bo positioned Jinye as a follower in the market. Offline feedback from agents and click tests when products are put on shelves make Zhang Bo feel confident that his factory can always respond quickly to the market.
Jinye not only follows the trends of recent years and sells cotton towels and kitchen paper. In just two years of being an e-commerce company, it also created popular products such as rolling paper and tissue paper. Last year’s Double 11, its orders It ranks first on Taobao Special Edition in both volume and sales. E-commerce has also created revenue for Jinye accounting for more than 60% of total revenue. A small factory with only 16 or 7 people 10 years ago has now become a company with more than 200 people, and the optoelectronics team has 50 to 60 people.
Old machines from the past of Jinye Paper Products Factory
There are many factories like Jinye in Hebei. Zhang Bo remembers that in 2019, when Gold Leaf was selling goods on Tmall, only about 10 Baoding paper product factories joined e-commerce during the same period. In the past year alone, hundreds of paper product factories were selling goods through e-commerce platforms. , “The estimated growth rate is over 300%, or even higher.”
Data shows that Hebei has risen to the third place among the top ten industrial belts in the country in 2020. Baoding paper towels, Baoding women's bags and Qinghe cashmere are sold across the country through e-commerce.
html Can I use paper towels that cost 85 cents a pack?
Zhang Bo initially just tried to expand more selling platforms. As a result, after one year of staying on Taobao's special edition, Jinye sold 36 million orders. The most popular items above are toilet paper for 6.9 yuan for 12 rolls and toilet paper for 10 yuan for 16 packs. Counting the red envelopes given by the platform, each pack only costs 4 or 5 cents.
Can such cheap paper towels be used?
A pack of paper towels is sold cheaply on Taobao's special edition, just because the factories use popular products with small profits or losses to exchange store traffic. The quality of these brands is not inferior to the big names.
In the past, major tissue brands had obvious advantages in terms of production level. Vinda bought a production line from Japan as early as 1993 and built a Vinda Paper City. At that time, most of the paper products industry used cotton pulp and straw pulp as raw materials. Vinda used imported log pulp to enter the market. Golden Hongye and Hengan International were also involved in the pulp industry, bringing a brand premium that is now higher than the price of ordinary paper towels.
However, medium-sized manufacturers have closed the previous quality gap in terms of equipment technology and raw materials.
12 years ago, when the Golden Leaf Paper Factory was born, a paper machine rumbled all day long with a production capacity of less than 10 tons. Now a paper machine can produce 60 or 70 tons of paper in a day. Small-scale paper towel factories have long used automatic production lines and robotic arms. In Jinye, which is considered a medium to large local factory, there is not a single worker on the production line.
Gold Leaf Paper Products Factory production line
As for the production and research and development of paper towels, it is more like an art of deployment.
To evaluate whether a paper towel is useful or not, the industry often looks at it from several dimensions: toughness, water absorption, crumb shedding and touch. Kitchen paper and facial tissue must meet a certain wet strength and not easily break when exposed to water, but toilet paper must be able to melt when thrown into the toilet. Natural paper must meet the requirement of low chemical addition. The raw material of bamboo pulp paper is bamboo pulp. The dry toughness is strong, but the touch is poor... Different products divided into different consumption scenarios have their own standards, which test the factory's experience and skills in raw material selection and proportioning.
directly connects with consumers through the e-commerce platform, which not only reduces the factory's dependence on agents and traditional channels, but also can produce on demand, reducing the production cost of a pack of raw wood pulp paper to about 50 cents. Zhang Bo said that as long as the order quantity is large enough and the machine continues to produce without changing the process, even popular products can achieve breakeven.
In 2020, Jinye joined the directly operated Cainiao Warehouse, which further reduced logistics costs. Zhang Bo said that the factory only needs to deliver the paper towels to the warehouse according to the order quantity, and the warehousing, ordering, transportation and other processes are coordinated by Alibaba C2M, saving more than 20% of logistics costs.
In the direction of good value for money products
Cheap does not mean that there are no good products. Many factory products that have appeared on e-commerce platforms have falsified people's past stereotypes.
Most of the 100 million monthly active users of Taobao Special Edition are price-sensitive, but this does not mean that they ignore quality. On the contrary, their purchase path may start with wool or recommendations from relatives and friends, and they may keep repurchasing because of the quality.
You may have used the kind of extremely rough paper towels that break when you pull them. They are called "semi-wood pulp paper" or "pseudo pulp paper" in the paper industry because they are not made from virgin wood pulp, but are the product of secondary processing after recycling papermaking scraps, often with a large amount of bleach added. , remove the yellowish color.
This kind of paper towel was once popular among street stalls and rural markets because it was cheap. But Zhang Bo does not want to produce such paper towels. He believes that when the rural market sees cost-effective products in the consumption upgrade, it will be eliminated by society sooner or later.
However, the price of raw wood pulp, which is the core raw material of paper towels, has remained high recently. Reducing costs or increasing selling prices have become two paths taken by different paper towel manufacturers.
Japan’s consumption inspiration 30 years ago and the increasingly obvious stratified consumption trend in China in recent years have more or less expressed or implied the commercial code in the market: cost-effective factory products, and new products in market segments. The almost universal business formula
can also be applied to the paper towel industry. For regular and necessary household paper, everyone will choose cost-effective brands. This is a factory white label opportunity. In segmented scenarios, kitchen paper towels, wet toilet paper, sterilizing wipes, and cotton wipes will be opportunities for new products and new brands.
Major manufacturers mostly increase profit margins through paper product segmentation and layout in the high-end market. Vinda, which embarked on a diversified journey in 2015, has expanded from household paper to several categories including incontinence care, women's care, and baby care. From 2018 to 2020, the gross profit of its tissue paper segment increased from less than 30% to 38.3%. Zhongshun Jierou, a rising star, has successively entered the high-end paper towel market through the Lotion series of cream paper and the natural paper series, and then launched the soft cotton napkin and sanitary napkin brands. Not only did its revenue and net profit grow faster than the other three brands, in 2020 The gross profit margin is also nearly 40%.
Zhang Bo keeps up with the market and has no intention of letting go of any nascent market opportunities. But the second-generation factory, who is obsessed with machinery and pays more attention to raw materials, believes that if the raw materials are changed from wood pulp to wheat straw or straw, people may be able to use more cost-effective paper towels.
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