Net Profit of Shanghai Jahwa Growing by 38.6% and Strategy Implementation Worked in 2018

On the night of March 12, Shanghai Jahwa revealed 2018 annual financial report. The company realized an operation revenue of 7.137 billion RMB during the reporting period and the year-on-year growth rate is 10%, realized an net profit of 0.54 billion RMB and the year-on-year growth rate is 38.6%, realized an non-net profit of 0.457 billion RMB and the year-on-year growth rate is 37.8%, and realized an operational cash flow of 0.895 billion RMB and it is well beyond net profit level. In 2018, Shanghai Jahwa realized double-digit growth of revenue and net profit, the corporate strategy plan was advanced orderly, and brand development and channel expansion achieved outstanding results. 

Coordinated development of brand and channel

Herborist has been insisting in the road of TCM Chinese herbal medicine for two decades and it optimizes brand development path by regarding new technique and new category as the core through deep insight into consumer demand. In 2018, 3 million Herborist solid essence masks were sold after appearing on the market for only 10 months and Herborist made an attempt in make-up category to launch Herborist Joy•color series cosmetics. Liushan launched florida water flavor cocktail with RIO, MAXAM united with White Rabbit to launch milk candy flavor lipstick, Giving united with Bright Food Group to support national moon probe project, GF mutually created “overnight cheer package” with Tsingtao Beer during the World Cup, VIVE united with fashion costume brand to appear in New York Fashion Week. All these successfully trans-boundary actions finish remodeling the brand rejuvenation, set off a new wave of topics, and attract the attention of a large number of young consumers. 

Besides, subordinate brands of Shanghai Jahwa expand brand exposure in virtue of “fan economy”. Herborist promotes the sale of new make-up products with the help of Li Yifeng and it reaches 0.158 billion person-times in microblog; Liushen conducts further cooperation with Hua Chengyu to launch a series of theme marketing activities and makes propagation in Tik Tok in virtue of star effect to get 16 million likes; MAXAM launches hand cream and lipstick with the help of Luo Yunxi and 20000 customized gift boxes was sold out in a day, and it also joins hands with Han Yu, the champion of Street Dance of China and Bian Jiang, a dubbing speaker, to show the brand vigor; and Giving reaches a new sales peak and realizes double harvest of brand recognition and product reputation with the help of Hu Ke. The company cautiously promotes new media application and focuses on word-of-mouth marketing. Driven by word-of-mouth marketing, brands realized a gross exposure of 7 billion person-times in the whole network in 2018. 

In the meantime of constantly improving brand development, the company has deep ploughing in eight channels and conducts full integration of online and offline to efficiently reach consumer groups in different scenes of consumption and realize matched development of channel and brand. It’s reported that the company keeps advancing offline expansion and achieved a growth rate higher than market level and improved the yield per unit area in distribution and KA system of dealers with relatively large pressure in fall of people flow; department store channel conducts optimization of terminal image and starts to gradually promote the single brand store mode of beauty maintenance space; infant & mom channel achieves better growth through the mode of commutative flow attracting; and cosmetics boutique distributes more brands and categories and actively expands overseas channel simultaneously, and settles in Amazon. In the aspect of online channels, e-commerce realizes the improvement of service power and yield per unit area and tries online and offline integration through smart retail store; special channel gradually establishes sustainable business mode and tries to create Jahwa’s own mall platform through introducing member flow. In the future, Shanghai Jahwa will continue digging the development potential of each channel and cultivate new growth points through consolidating mature channels, exploring new channels and innovating channel modes. 

Innovative development quality assurance

Shanghai Jahwa pays high attention to independent innovation to constantly improve the product quality. The company applies micro-ecology concept to the field of skin health for the first time and develops Herborist solid mask; it innovatively develops skin prebiotics barrier moisturizing technology, establishes the mechanism of “inhibitory stimulation + skin barrier repairing”, and consolidates Dr.Yu’s repairing strength for sensitive skin; it updates multiple series formulas of Herborist, adds the dosage of Chinese herbal medicine compound in the products, and uses new modern technology to greatly improve the product efficacy. 

It makes in-depth and systematic research on the safety of surface active agent and establishes surfactant combination technology suitable for baby skin and applies it to Giving bath products. Shanghai Jahwa always keeps close relation with external scientific research institutions, hospitals and governmental agencies including Huashan Sub-hospital of Fudan University, Ruijin Hospital of Shanghai Jiaotong University, Shanghai Dermatology Hospital, National Institutes for Food and Drug Control, Chinese Academy of Inspection and Quarantine, Shanghai University and East China University Of Science and Technology in the field of product safety and efficacy to devote itself to bringing consumers with more innovative products with better quality. At the beginning of 2019, it co-founded (listing) and managed Dermatology Joint Laboratory of Shanghai Jahwa-Huashan Sub-hospital of Fudan University with Huashan Sub-hospital of Fudan University, and the laboratory utilized advanced technology and equipment of dermatology in the research and development of skin care products and application conducting study. 

Crossing factory of the company had already gone into operation in 2018 to remold the manufacturing format. New factory realizes digitization, precision, informatization and automation of operations management, and comprehensively improves production capacity, supply guarantee ability and intelligent manufacturing level. Besides, the company adheres to the concept of environmental protection, fully utilizes green resource such as solar energy and thermal energy, and effectively reduces the discharge of waste water, greenhouse gas and solid waste. The advanced and intelligentized green factory guarantees that the company is able to continue providing consumers with products of high quality and implements the operation guideline of “supply guarantee”. The new factory improves production efficiency and quality management level, and also sets up a pole for industry innovation and quality. 

Take multiple measures to strengthen development power

In the past two years, Shanghai Jahwa has achieved dual engine growth through endogenous growth and epitaxial investment. On one hand, the company develops self-owned brands and continues consolidating market status of the brands. Subordinate brands including Liushan, Herborist, MAXAM, GF and Giving have all become leaders in market segments; on the other hand, the company promotes development energy through mergers and acquisitions or cooperation with superior brands. In 2018, Tommee Tippee, the wholly-owned acquired foreign infant nursing brand had remarkable performance in domestic market and overseas market. Jahwa utilized the channel advantage to actively develop Tommee Tippee and Tommee Tippee’s parent company called mayborn also achieved excellent performance after being brought into Jahwa. The acquisition target has been achieved and exceeded the expectation. In last year, Tommee Tippee took part in the 1^st China Import Expo to show its high quality and technology innovating strength to the consumers in China and around the world. 

Besides, Shanghai Jahwa signed China regional long-term cooperation agreement with American Church & Dwight during the reporting period and became C&D’s exclusive partner in four product categories, i.e. household care, oral care, hair care, and female care to take the charge of brand operation and sales of the products. C&D is a leading manufacturer of personal care and household care products in the United States and many subordinate brands are the world leaders in subdivisions. Through this cooperation, Shanghai Jahwa has introduced internationally leading high-quality personal care and household care products to China, further expanding and improving the business ecosystem of Jahwa.

In the future, Shanghai Jahwa will continuously promote high-end oriented, digitized, intelligentized, platform-oriented and internationalized layout, create more extensive, more efficient and more practical ecosphere, improve integral brand strength and influence, strengthen multi-brand, multi-category and multi-channel development advantages, keep practicing 16-Chinese word operation guideline of “research and development first, brand drive, channel innovation and supply guarantee”, adhere to the mission of “making everyone beautiful and healthy and letting every family be clean and happy”, and create more glorious performance with the spirit of originality and the manner of innovation.