Zhang Dongfang: celebrating the 120th anniversary and continuously writing a gorgeous chapter

On March 23, Shanghai Jahwa’s 120^th anniversary of grand brand ceremony was held in Wuzhen Internet International Exhibition Center. Mrs. Zhang Dongfang, Chairman and CEO of Shanghai Jahwa United Co., Ltd. attended the ceremony and delivered a speech to share the three development stages of Shanghai Jahwa and summarize the operating results obtained by Jahwa over the previous year and make a clear planning for the future development direction of Jahwa.

Full text of speech given by Chairman Zhang Dongfang in the ceremony:

Dear guests, ladies and gentlemen! March 23 is an exclusive day of Shanghai Jahwa. Last year, we agreed to meet each other in the next spring and today we gather together in Wuzhen. Wuzhen is a geomantic treasure land integrating the humanistic connotation of millennial ancient town and the latest digital technology, Jiangnan style and fashion.

In 2018, Shanghai Jahwa has ushered in the 120^th year of its development history. As a century-old leading enterprise in the industry, Jahwa has the characteristics of “made in Shanghai” and represents the fashion quality in Shanghai’s personal care products, home care products and beauty and skin care industries. We would like to re-interpret the brand “Shanghai Jahwa”.

Today, I want to share with you the three development stages of Shanghai Jahwa: past, present and future. Let’s gain new insights through reviewing the history and forge ahead into the future! Shanghai Jahwa releases a new image film today to pay tribute to the past 120 years as well as the three stages during the transformation. First of all, we pay tribute to the first 51 years of initiation and establishment, during which the Chinese people were led to a beautiful and modern life from 1898 to 1949; then we pay tribute to the second 51 years of growth and development from 1949 to 2000, during which we grew with the new China and gave Chinese a healthy image and led the country in the path to a stronger China; finally, we pay tribute to the 18 years after the listing. From 2001 to 2018, with the rapid development, we cultivate the industry elites and create the benchmarking products in industries such as beauty skin care, personal care and home care, thus adding a glorious chapter to the Chinese dream.

I would like to talk about the changes in the past year. The performance announcement for the year of 2017 has just been released and Shanghai Jahwa has already started the endogenous extension and external development, and its self-owned business increases by nearly 50% and the net profit has doubled.

The strategies and operation policies shared with all of you last year have produced preliminary results. In particular, the organizational structure has demonstrated the strength and efficiency in operation. We have the ability to enter three major categories and operate ten brands. We will centralize our resources to focus on development of the national brands valuing RMB 1 billion, 2 billion and 3 billion. What is mentioned here is the amount of the company’s billing income and our turnover of retail sales is far beyond such amount.

We launch new products in 2017, which are highly favored by consumers as we always adhere to the strategy of “high-end and segmented design for younger customers” and make every endeavor to implement such strategy, so that remarkable achievements have been made.

Herborist begins its business with the products of “mud” and “cinnabar” and now focuses on development of the cream products and the brand has the most insight into the consumers. Liu Shen initiates the topics among the young people; MAXAM has achieved the highest growth in recent years; Giving’s potential has been fully realized and its market share has grown rapidly; Dr. Yu customizes the products for the people having skin problems and insists on the principle of “less is more” and strives to improve the skin under sub-health status and promote the metabolism. These are our product achievements made over the past year.

Shanghai Jahwa develops ten major brands and eight channels to allow the customers to make flexible choices and flow our goods. All consumers are able to have an access to Shanghai Jahwa’s products in a favorite way and hundreds of millions of consumers will use Jahwa’s products in the future. The company’s CRM Department will create a “graceful Jahwa” data to keep full communication with the consumers, firmly grasp and effectively manage the consumers’ resources.

The industry is led by scientific and technological innovation and Shanghai Jahwa owns a national R&D center and has invested nearly 3% of the company’s annual turnover in R&D. Major technological breakthroughs have been made at the technical level: skin barrier repair, freeze-dried powder and preservative-free products. In May of this year, R&D Department will be moved to a new address and we will cooperate with more high-end professional institutions in the in-depth research of fields such as stem cells, collagen, optics and nano-scale sun protection. All scientific research achievements will be effectively applied in the skin care products so as to maintain our leading position of science and technology in the industry.

Let me share several stages of retail sales with you. What do 1.0, 2.0, 3.0 and 4.0 mean? The manufacturers and brand owners should keep pace with the times and survival of the fittest is also applicable to the market discipline. With the change of times, Shanghai Jahwa not only develops the eight major channels but also tries out the block booking stores, single brand outlets and pharmacy channels. The online business accounts for more than 20% of the total businesses. We must maintain the attitude of adjustment in order to stay at the forefront of the market forever.

Channel innovation is reflected in the channel integration and win-win cooperation. Channel integration has solved such problems as trade-off, individual camp and price conflict. The frontline personnel of Shanghai Jahwa have clear goals and have made concerted efforts to win the market. Jahwa has penetrated its business into 3 million outlets among all statistical retail outlets in China, with the penetration rate being 75%. Such figure is increasing every year. The number of our well-organized distributable controllable outlets is 200,000, which is a huge controllable resource for the company.

After finishing the topic of retail 4.0, let’s talk about industrial manufacturing 4.0. We are talking about the upgrade at the supply side. Jahwa is started from the manufacturing industry. We are positioned as the leading manufacturer of daily chemical products. The daily chemical products are closely related to the daily life of millions of households so that the safety is the paramount rule in the industry. The products manufactured by Shanghai Jahwa’s intelligent factory should always maintain the safe, reliable and trustworthy position in the minds of consumers, which will be an endorsement for consumers to feel relieved to use.

In fact, we need to actively embrace the future. The blueprint for Shanghai Jahwa’s mid-term development and the path of realization has already been demonstrated. In the future, Shanghai Jahwa will enter a club of a mid-sized daily chemical product; in the long run, Jahwa will join a large-scale daily chemical product club. The realization of this prospect can be expected.

In the future, Jahwa will build its own ecosystem and integrate the five platforms namely production, R&D, sales, brand management and capital operation. We will develop businesses across the border and enter the service-oriented industry. This industry currently refers to the sales management, brand management, R&D achievements and industry sharing. In the manufacturing industry, the current factory can also undertake OEM and ODM in addition to production of its own products. There is also a technology industry in where we are able to keep ahead and apply AR, VR and CRM to manage digital big data. Sharing resources with all of you aims to inspire us to achieve a win-win situation and develop the beauty skin care products, personal care and home care fields stronger and bigger.

In fact, Shanghai Jahwa’s products are all related to the people’s livelihood either in three major categories such as beauty skin care products, personal care and home care or in three major industries such as service, manufacturing and science and technology; ultimately, the products are involved in four causes: beautiful cause, health cause, happiness cause and welfare cause. In beautiful cause, the beauty, facial beauty product and medical beauty are involved and medical products are applied in the beauty skin care; the health cause includes personal body care, health product and personal cleaning products; happiness cause involves the intelligent home care products, which can enable people to get rid of heavy housework and obtain the easy product experience and improve the life quality; for welfare cause, we have already created products for women and children. In the future, we will also create special products for the special population, such as the aged. This is also a sustainable development path that can coincide with the generations’ good pursuit and yearning for happy life and this is also a long-lasting cause.  

Shanghai Jahwa will achieve the strategic goals by relying on the four major development paths. Firstly, brand development: constantly develop more than ten self-owned brands and strive to launch several cooperative brands; secondly, make precision marketing, create a data platform involving 400 million consumers, deeply explore the consumer demand and make precision marketing; thirdly, category excavation: market size of three major categories is RMB 400 billion and the annual average growth rate is 10%. After ten years, the market size can reach RMB 1000 billion; fourthly, channel innovation, we must continuously expand eight major channels, collaborate the development of self-owned brands, continuously cooperate with the strategic partners and make full use of 3 million outlets.

Our achievements in the four major development paths depend on the depth of the foundation of the company’s capability. Taking supply chain capacity for example, the capacity of the new plant can support give five times growth in the business volume; for the R&D ability, we continuously promote the cooperation with scientific research organizations having top technologies in development of technologies and our technical reserve should get ahead of the market for three-five years; for financial capacity, our financial capacity can support five times of business expansion; for organizational capability, we have sufficient reserve of talents and the company’s blueprint can attract more talents in the industry to join us. The company’s organizational structure can sufficiently support our strategy and we will continuously create an efficient and honest team.

Shanghai Jahwa is unique. After the development of first 100 years, it is now embracing the 20th year of the second 100 years. Today we gather together to share the achievements of last year, and celebrate the 120th anniversary of Shanghai Jahwa. We also take this opportunity to launch a brand new product. We will work hand in hand with the peers in the world and play the leading role in our home field. Let’s cooperate with each other to create a glorious future!