Zhang Dongfang: Welcome the Tide of the Times and Create an Extraordinary Future

2019-03-25

On March 23 2019, Shanghai Jahwa Brand Festival was held at Fuyue Hotel in Shanghai. Ms. Zhang Dongfang, Chairman and CEO of Shanghai Jahwa United Co., Ltd., attended the ceremony and made a speech. She analyzed the ten current tides of the daily chemical industry and shared the future development strategy and plan of Shanghai Jahwa.

Following is the speech of Chairman Zhang Dongfang at the brand festival:

Dear leaders, guests, ladies and gentlemen, good morning! The most frequently used word in 2018 is "fashion", such as fashion hot, fashion people, national fashion... So today, we use high fashion and extraordinary as the theme of the brand festival.

We have summed up many, many waves in the past few years. Face economics is the first wave. China's economy has entered a critical period of slow growth and power transformation, from investment and export leading to consumption leading. In the first half of 2018, consumption contributed 78.5% to China's economic growth, becoming the core driving force of economic development. At the same time, the consumption structure is also changing. In this wave, a bright spray emerges, that is, an industry called "face economics".

According to industry analysis, the cosmetics and personal care industry will continue to grow steadily in the next five years. Compared with Europe, America and Japan, China's per capita consumption is only one-sixth or one-fifth of theirs, which shows that there is huge room for growth in the future. All of you here are the creators of this wave. Let's cleave through the waves together and hit new heights.

Shanghai Jahwa is very confident in this wave of face economy, and its layout is in the first place, and has achieved initial results. Shanghai Jahwa is engaged in the cause of beauty and health, and its brand mission is "to make everyone beautiful and healthy, and to make every family clean and happy." Whether in the past, now or in the future, the core business has always revolved around cosmetology, skin care, personal care and home care, which are the cause related to millions of households. We now have 10 private brands, they are constantly enriching the business sector, and now add five joint venture brands and exclusive licensed brands. Two years ago, based on consumer insight, we foresaw the consumption trend of high-end, younger and subdivided, and built our brand matrix. Each brand plays an important role in its own sub-areas. These brands have shown full vitality in Shanghai Jahwa, and have taken root and sprouted in this virtuous circle of ecology and grown healthily. At present, we have two main brands and we are cultivating the third and fourth main brands, forming our first, second and even third echelons, to increase the brand growth.

The rapid growth of high-end and middle-end brands is fierce and unstoppable. We call it the second wave. Two years ago, on the same day, March 23, 2017, we talked about this topic and it’s still in our ears. Today, we find that the proportion of high-end brands has increased from 50% to 56%, the growth rate is 28%, especially in the field of e-commerce, accounting for 29%. Shanghai Jahwa has accelerated the upgrading of its products, made great efforts through all channels, and its business structure has already approached the market structure.

Now let’s look at the third wave. The upgrade of skin care products is the third wave. The slowdown of economic growth has led to the face economy and a wave of consumption upgrading. The category upgrading of skin care products is particularly important, which can be called the third wave.

Consumer upgrading does not simply mean that consumers are willing to pay for more expensive products, but is reflected in the evolution of categories. Take the skin care concept as an example: the first is smearing cream, and later consumers are more diligent in skin care with mask, then skin care is better with using the essence. From the growth rate of four categories, the fastest is the essence, up to 132%, followed by cream growth of 48%, mask 33%; men's skin care also self-contained, an increase of 32%.

Shanghai Jahwa has always been in the forefront of the wave. It has pioneered the high-end essence, and its R & D technology is also leading in industry. The lyophilized mask is popular among consumers and has become a star product. GF also pioneered in the men's special skin care brand.

Consumers' demands are changing all the time, which is the fourth wave. The products are high-end, the category has been upgraded, and the changes of consumers are also keeping pace. Their demands are changing day by day, forming waves one and another. Shanghai Jahwa’s product line is rich, the category updating is active, mutually stimulates with the market, promotes with each other, and leads and catches up with each other.

Now look at the fifth wave. The fifth wave is Chinese characteristics. This color is Chinese. We take this opportunity to share with you some fashion words: Chinese cultural elements, extreme Oriental charm, extraordinary cross-border cooperation, retro and fashion, fashion and fun...

2018 is the first year of national fashion. Compared with famous international brands, the national fashion pays more attention to novelty and fashion. It does not pursue extraordinary high prices and excessive luxury, but reflects some symbolic significance and attitude. The national fashion hand in hand with the national products are of great significance, such as the VIVE appearing in the fashion week of New York; the Maxam White Rabbit lip gloss reminds us of the sweetness of childhood; the cocktail of Liushen is intoxicating, but soon it changes and enjoys with the national treasure panda IP; Herborist cooperates with fashionista and fashion pioneers, deduces the spirit of independence and autonomy with the attitude of tide luxury, inherits traditional Chinese medicine and promotes Chinese culture.

Let's take another look. Fans economy and social economy are the sixth wave. For consumers, we have always been in accordance with their needs, painting a picture and labeled to provide appropriate products. The current wave is that consumers come together in a social circle. We need to attract their purchasing desire first and then engage in social fission. Consumers pay attention to the social experience when using products, as well as social shopping. Shanghai Jahwa has made several waves of activities combined with fans economy, changed the investment structure in media dissemination, and communicated with consumers more accurately.

Here is the seventh wave. That is Chinese enterprises going out and inviting in. Brands and enterprises must go out and invite in if they want to develop and grow. Many Chinese enterprises have expanded their territory and added categories through mergers and acquisitions. Shanghai Jahwa has opened up the global layout by purchasing Tommee Tippee and extended the product line of infant category. Our skin care and personal care products are also moving towards Europe, America and Africa. And recently, we have obtained the exclusive right to operate original imported products from the United States, and also supplemented the category of home care and hair care products of Shanghai Jahwa, which has added a brilliant stroke to create a perfect ecosphere.

The eighth wave is multi-brand and multi-channel. In the last century, we advocated positioning, single brand strategy and single channel strategy, while the current wave will be dominated by multi-brand and multi-channel companies. Our eight channels have been integrated in the past two years and developed both online and offline. Sales outlets continues to increase, and has now increased to more than 300,000.

Over the past year, our brands have been revitalized and many have become category representatives: Herboris is the first brand of herbal concept; Liushen is the top three of personal care overall; Maxam is hand cream No. 1; GF is the earliest national brand of men's skin care; Giving it is the first national brand of infant skin care; HomeAegis is the first brand of household appliances cleaning; Dr.Yu is the fastest growing brand of scientific skin care; International brands: Tommee Tippee has 50 years of British baby brand history; ARM&HAMMER is a brand with 180 years of history in the United States; Batiste is the world's largest dry hair shampoo; Femfresh is an outstanding British brand caring for women.

The innovation of products is the ninth wave. In our industry, there are experts who can create a brand by means of channels, and there are experts who can create their own brand and rush out a channel. But they all have to have good products to sustain development. New product innovations will set off a new wave.

2019 will be the product year of Shanghai Jahwa. To develop high-level products and become the benchmark of the industry, we must have strength. Specifically, we will establish six academies. Here is the introduction: Academy of Traditional Chinese Medicine, Academy of Hair and Dermatology, Academy of Packaging Materials and Structures, Academy of Fine Arts Design, Academy of Chinese and Foreign Regulations and Industry Standards and Academy of Raw Materials. Cooperation with institutions and colleges at home and abroad, including Chinese Academy of Sciences, Chiao Tung University, University Of The South, Zhejiang University, China Academy of Chinese Medical Sciences, Huashan Hospital, Ruijin Hospital, Shanghai Academy of Fine Arts and the French Industrial Design Union. I can't count it at one breath.

Starting from basic scientific research, we have developed into four categories of applied science. Every year, there are nearly 700 new products and 50-60 patents, including 15-20 invention patents.

As in the Changjiang River the waves behind drive on those ahead，let’s look at the tenth wave. Quality safety and consumer experience are the tenth wave. As consumers mature, they will pay more attention to quality and safety, good experience and significant effect when they constantly reflect on comparison in the process of exploration, so that they will repeat their purchases. There are many popular overnight brands in the daily chemical industry, but if we want to go through the waves without disappearing, we still need to trace back to the origin and return to the nature of the product. Therefore, we will not be impetuous, and we will pursue the spirit of craftsmen, in a series of quality control systems as well as high-tech, automated production lines, continue to create safe, efficient and high-quality products for the benefit and feedback of consumers who love Chinese manufacturing.