Mutual growth of income and net margin of Shanghai Jahwa in the first half of 2018, the strategic plan has been advancing steadily

2018-08-21

In the evening of August 21, Shanghai Jahwa released its financial report for the first half of 2018. Within the reporting period, the company’s income reaches RMB 3.665 billion, of which the business in China increases by 10.5%, the overall business increased by 9.29% from a year earlier, and the sales target of the first half has been accomplished as per schedule;  realizes a net profit of RMB 317,000,000 rises 40.89% from a year earlier; in the first half, the company realizes a operating cash flow of RMB 505,000,000, far over the net margin, and gains the performance growth of high quality. The company has effectively implemented the scheduled strategy, under the guidance of business policy of “research and development going first, brand driving, channel innovation, supply guarantee”, steadily take the measures to implement the strategy, and promote the company’s performance and operation efficiency. 

Research and development going first, strengthen the market competitiveness

Jahwa has been improving the development process for new products, strengthening the R&D techniques, and enhancing product innovation and quality. Within the reporting period, the company has developed more than 300 SKU of new products,  such as the dry mask with zero preservative and additive developed with American “Refractance Window” drying technology, is a brand new technological upgrading in the area of mask;  Herborist Moisture and Herba Lycopi Beauty Collection developed by the new ferment technology; and GF Moisture and Dust Free Collection developed and launched through in-depth research on the influence of smog on people's skin, and it has been tested by the third-party authority and proved to have preferable effects of anti-pollution and moisture; Dr. Yu Soothing and Repairing Collection was launched after in-depth research on skin barrier, and it provides comprehensive solutions for sensitive skin; and Herborist Brilliance high-end cosmetics developed in cooperation with world class manufacturer; and Herborist “My moment” perfume is packaged in the 20th anniversary premium gift box and has been grandly launched.

Furthermore, the innovative applications of Chinese herbs in cosmetics have provided traditional Chinese medicine theory and active additive solutions for the 6 major brands and more than 20 collections of products of the company. For example, the Chinese aesthetics of inner nourishing and outer brilliance of Herborist high-end cosmetics, and the overall upgrading research for Liushen stock solution from theory to process and efficacy. The company further strengthens the advantages of innovative applications of Chinese herbs in cosmetics.
In July, the company’s Technological and Innovation Center newly reopened. The new center newly introduces more brand new biological equipment, and is creating a new research platform and laboratory, and further enhances the company’s scientific innovation strength. Meanwhile, Jahwa was awarded as one of the Top 10 Cosmetics Enterprises of China Light Industry in 2017, and participated in the drafting and revision of several industrial standards.

Brand-driven marketing innovation

In the first half, Jahwa has made significant progress in area of constructing digital marketing, and built a complete digital marketing data closed loop through "Huameijia CRM System" and "Jahwa the First Party DMP"(Data Management Platform). Facing the consumers with an established connection, the company launched "HMECA" system in the end of March this year. In just 4 months, "Huameijia" has enrolled more than 250,000 members, and opened about 2,000 off-line counters, integrating the membership system and rights of Herborist, GF, VIVE and Jahwa's flagship store, in order to establish a more close relationship with consumers for all our brands; facing wide range of consumers that have not established connection with Jahwa, the company has built Jahwa DMP system to integrate consumer behavior data widely distributed around China, and establish the wide range consumer marketing closed loop, realize the marketing communication with more precision, provide marketing content more suited to consumers, have in-depth insight about the consumers, and implement more comprehensive marketing assessment.

Jahwa has Liushen, Maxam, Herborist, GF, Giving, Home Aegis, Dr. Yu, Tommee Tippee, VIVE, and Fresh Herb under its name, the company has actively been advancing the process to make the brand high-end, young and segmented, and focus resources in creating the premium brand. In the first half of the year, Liushen launched the theme marketing of "Enjoy the hot summer with Liushen", and launched the floral water cocktail through crossover cooperation with RIO; new Herborist solid essence masks have been in the market for half a year, and total sales volume over the net has been more than 2 million pieces, and in July we started to hire Li Yifeng as the spokesman for categories of cosmetics and masks; Maxam joined hands with Hanyu, the champion of Street Dance of China to promote our sunscreen products, leveraging hot shows and the topic heat of stars; GF joined hands with KOLs such as Feng Tang, Li Dan, and Xinshixiang in initiating the hot topic of "greasy",  triggered about 250,000,000 visits of audience coverage, and during the FIFA World Cup, we launched marketing through crossover cooperation with Tsingtao bear; Giving launched the theme marketing of “Zero distance in summer, be refreshing and get closer”, and carried out the public welfare program of “Spring Buds Program, Giving Beauty and Young Action”.
Efficient resource integration by channel innovation

Jahwa has been sticking to the channel strategy of omnichannel, full coverage, and the mutual development of combining the channels online and off-line and brand matching, actively implement the layout, and deeply plow the traditional channel, develop emerging channel, and exploit innovative channels and realize synergic development of various channels. According to the report, Jahwa has been advancing the expanding of retail stores, and transform from the original model into a new retail model of all-around layout, covering from supermarkets and department stores to franchised store, and maternal and infant sores, and realized the high-speed increase in off-line channels.

Meanwhile, the company is continuously optimizing e-business, partners with influential operators with rich experience, enhance the operating quality of Tmall flagship store, improve the store's page, enhance the conversion rate and yield of the store, and enhance consumers' satisfaction, gradually try to enter the new e-business platform, such as mogujie.com, Wechat Store, and etc. During the marketing period of June 18 (618), the online channels took full effects and provided outstanding performance.

Internal integration, efficient operation

In the first half the year, Jahwa wholly purchased the foreign brand Tommee Tippee, and maintained a preferable growth, and the global sales increased by about 7% on a year-on-year base, and the net margin increased by about 116% from a year earlier, the profitability was significantly enhanced, and the company's internal integration began to take effects. Tommee Tippee continues to deeply plow China's market leveraging the company's resources, and speeds up the expanding of the off-line maternal and infant channel. Up to now, Tommee Tippee products are sold in about 2,500 maternal and infant stores in China. Meanwhile, to meet Chinese consumers' need, Tommee Tippee and Jahwa have built a joint laboratory and initiated the Tommee Tippee China Innovation Center project to research and reform the product for Chinese consumers. Since the purchase, Jahwa and Tommee Tippee have established a complete daily communication mechanism and approval system. Tommee Tippee helps the company further exploit the growth potential of the European market, and expand the development of overseas channel.

It should be noted that Jahwa has reached the long-term cooperation intention in area of China with Church & Dwight Co., Inc. (hereinafter referred to"C&D"), the leading personal care and home care products manufacturer and No.1 American baking soda manufacturer, to develop the channel sales platform and brand management platform. Jahwa will become C&D's partner in respect of baking soda, toothpaste, dry shampoo, and feminine lotion in mainland China, and will be responsible for omnichannel promotion and sales for these products. Through this cooperation, the company will further improve the category layout in area of "personal care and home care", take full advantage of the international brand influence and product development ability to bring more international products of high quality to Chinese consumers.

In the future, Jahwa will devote to development, continue to provide premium products of cosmetics, skin care, personal care, and home care, to meet the consumers' pursuit for a better life, and share beauty with our partners, and with billions of consumers.