Jiumu Wang Yingfa, a male demolition enterprise from another rural area, has once again crossed the 3 billion yuan mark.
According to the financial report released by Jiumu Wang on April 25th, in 2023, Jiumu Wang’s operating expenses decreased by 16.60% year-on-year to 3.055 billion yuan, with a net profit of 191 million yuan after returning to the parent company, and a loss of 92.36 million yuan in 2022; The net profit after deducting non parent income decreased by 301.64% year-on-year to 241 million yuan.
This is the second time that King Jiumu has cashed in more than 3 billion yuan in business development, which is also the best in his history, although it has only slightly decreased by about 5 million yuan compared to the highest point of 3.05 billion yuan in 2021. The year-on-year turnaround in net profit from returning to the parent company was mainly due to the narrowing of losses in investment operations, but there is still a slight difference from the 195 million yuan in 2021.
The improvement of the deeds of King Jiumu is partly due to the overall recovery of the men’s demolition mall. Among the listed companies that were spun off by men from other regions, Baoyou Bird, Seven Wolves, China Lilang, and George White had a 2023 turnover of 21.82%, 6.70%, 14.84%, and 16.63%, respectively; The operating expenses of Hailan Home and Yagor Service in the first three quarters of 2023 were 13.85% and 12.83%, respectively.
Compared to female dismantling, the industry format of male dismantling in China is relatively stable, and the shuffling rate is slower. According to data from the Prospective Research Institute, the concentration rate (CR5) of the top five companies in China’s male dismantling industry in 2022 was 15.8%, while the figure for the female dismantling industry has been around 5% for a long time. Another intuitive example is that the Taiping Bird male demolition has shown greater resilience than the female demolition in the overall decline of group achievements in the past two years, with its business surpassing that of Taiping Bird female demolition in 2023.
On the one hand, this is because men’s clothing dismantling needs are not as diverse as women’s, and men’s dismantling has stronger essential attributes, so the consumption side needs are not as bumpy as women’s dismantling. On the other hand, top male demolition companies are also pushing for transformation to maintain their market share.
Their tactics are also quite similar, highlighting strong categories, attracting young customer groups, and integrating channels, which are common strategies.
Image source: Nine Pastoral Kings
The Nine Shepherds also did the same.
Similar to the positioning of Seven Wolves as a “master of jackets” and Yagor’s exaggeration of “Chinese shirts”, Nine Shepherds King has been driving a strategic transformation of “master of men’s pants” since 2020, focusing on product categories to strengthen brand abstraction and cost. In 2023, the growth of Jiumu Wang’s sales was mainly mobilized by this category, with men’s pants products contributing 48% of the total sales, with a year-on-year growth rate of 21.51%, second only to the 21.70% growth rate of jackets. In 2019, the contribution of Jiumu Wang men’s pants to Yingfa was 39%.
How to attract and promote the new generation of young consumers is also a common achievement among veteran men. In the financial report, Jiumu Wang specifically identified “younger customers” as one of its growth highlights for 2023.
Jiumu Wang’s youthfulness strategy includes communication media marketing, which attracts and attracts young users through communication topics and the essence of detached grass planting; And please hire young celebrities to represent you, which is also a common strategy for other accompanying brands. The current representatives of brands such as Yagor, GXG, and Lelang are male celebrities in their thirties.
In April 2024, Jiumu Wang also announced five brand representatives, namely Zhu Yawen, Zhang Yunlong, Wei Daxun, Li Yunrui, and Fan Chengcheng, aged between 24 and 40, which basically revealed the age scale of Jiumu Wang’s target audience (25 to 50 years old). This is also the second time in nearly five years that King of Shepherds has driven the brand’s representative. Prior to 2019, his representative had always been the 70s male celebrity Lu Yi.
In terms of channels, Jiumu Wang, like Yagor, also adopts a “joint store” strategy with the goal of improving store efficiency. In 2023, the number of stores under Jiumu Wang’s umbrella net decreased by 58 to 2386 (of which about two-thirds were franchise stores), but the total area decreased by 3%. In 2024, Jiumu Wang will also focus on expanding its new stores through shopping centers and Aolai channels, as well as franchised prefecture and county-level large stores; It is estimated that the number of stores will be net deleted and increased by 50 to 100.
From the deeds of King Jiumu, it can be seen that the aforementioned actions have indeed had consequences, at least showing signs of steadily breaking through the 3 billion yuan mark. In the first quarter of 2024, Jiumu Wang Yingfa inherited and deleted, with a deletion rate of 21.70%. In 2024, Jiumu Wang plans to realize a revenue of 3.4 billion yuan.
Image source: Nine Pastoral Kings
But the danger points and the scale of long-term growth also survive.
Firstly, the transformation towards youthfulness brings about marketing collaborations, resulting in the ultimate dividend level. In 2023, the sales utilization rate of Jiumu Wang was 36.6%, with advertising and business promotion expenses of 186 million yuan, accounting for 6.1% of the total revenue, and a net profit margin of 6.2%. Before 2019, the sales utilization rate of Jiumu Wang was mostly maintained below 30%, with advertising and promotional expenses mostly below 4%, and a net profit margin of over 15%.
Secondly, strengthening a single category can also make it difficult for Jiumu Wang to break free from his dependence on men’s pants, leading to long-term downsizing of the enterprise. Especially, Jiumu Wang has not yet broken free from the independence of its main brand – in 2023, Jiumu Wang brand contributed over 90% of its revenue.
This is also a result faced by many male dismantling companies that have not yet developed new strengths. The positive case that can be seen in Jiexing is Baoyouniao. With the second and third growth curves of Huihuojis and Baoniao, it has achieved high-speed growth since 2020, with revenue exceeding 5 billion yuan from over 3 billion yuan.
Jiumu Wang also stated in his financial report that he will continue to pay attention to the investment and acquisition opportunities of the service dismantling brand and the upstream and downstream of the service dismantling industry chain, in order to enrich the brand matrix. But just as important as finding high-quality goals is cultivating the brand, and at this stage, Jiumu Wang seems to still focus its main spirit on the main brand.
By the end of 2023, Jiumu Wang’s subsidiary brands FUN and ZIOZIA, which were purchased in 2011 and 2018 respectively, each had 95 and 94 stores, with business development scales ranging from 100 million to 150 million yuan. At the end of 2019, FUN and ZIOZIA had 246 and 139 stores respectively, with revenue of 266 million yuan and 105 million yuan, respectively.
Jiumu Wang plans to inherit and optimize ZIOZIA’s channel structure in 2024; The current brand positioning and marketing strategy of FUN is linked to street dance civilization. Jiumu Wang plans to transform its “fashionable pants dismantling” strategy, providing products that expose four major scenes of young people’s activities, outdoor activities, leisure, and denim.