According to the financial data released by Bosideng Group (03998.HK) for fiscal 2019/2020 on June 23, thanks to its product innovation and accurate insight into market demand, the Group reported operating income of RMB 12.19 billion for fiscal 2019/2020 against all odds, a record high and a year-on-year increase of 17.4%. Net profit attributable to shareholders was approximately RMB 1.2 billion, a year-on-year increase of 22.6%. And the down jacket business of the brand Bosideng remains the Group's biggest engine of revenue growth, accounting for 78% of the total revenue.
Stellar financial performance of Bosideng
As shown by Bosideng’s 2019/2020 financial report, as of March 31, 2020, the group achieved operating income of RMB 12.19 billion, up 17.4% from a year earlier. Gross profit rose sharply by 21.7% to RMB 6.71 billion, and gross profit margin increased by 1.9 percentage points to 55%.
It is worth noting that revenue from its down jacket business was RMB 9.51 billion, up 24.2% from a year earlier. With revenue of RMB 8.4 billion, a year-on-year increase of 22.7%, the main brand Bosideng down jackets maintains a leading role in growth contribution, making it the Group's biggest growth driver.
As China's economy was impacted by complicated and volatile circumstances in 2019, as far as the clothing industry was concerned, with domestic clothing sales on a downward spiral and clothing export falling in both volume and price, the overall clothing industry is faced with great challenges. According to industry insiders, Bosideng‘s 45 years of dedication to and accumulated expertise in down jackets played a big part in its success amid stagnant market. And Bosideng's keen insights to keep up with the consumption environment and market trends is the best factor driving its growth.
Bosideng attaches equal importance to soft and hard power
With the whole clothing industry in a slump, brand growth is more difficult than in previous years. Nevertheless, Bosideng has succeeded in breaking the shackels and come to a turning point for growth by playing it safe and relying on its brand DNA.
Continuous product upgrading
It is the consensus of the whole industry that Bosideng’s advantage lies in its 45 years of dedication to product development and ingenuity. It stimulates the market and satisfies consumers’ needs to the fullest with high-quality professional down jackets, which can then translate into a driving force for brand growth.
Looking back on 2019, from the appearance on the Milan Fashion Week in collaboration with Italien "star creator" Ottavio Fabbri to showcase the ingenuity and charisma of Chinese down jackets, to the release of Bosideng X Gaultier collection, Bosideng has managed to give consumers a new understanding with its insight into consumer preferences amid consumption upgrade and its internationally fashionable, professional and high-quality down jackets. In addition, its Mountaineering collection, which has been recognized and favored by the Chinese National Mountaineering Team and the Arctic and Antarctic scientific expedition teams, is a vivid example of Bosideng's expertise and redefines professional down jackets.
Release of Bosideng X Gaultier collection
It can be seen that continuous product upgrading is undoubtedly an important driving factor for Bosideng's steady growth.
Closed-loop services empowered by digitalization
If product upgrading is a solid safety net to ensure stable revenue, then the high-quality and fast-responsive supply chain system enables Bosideng to adopt offensive or defensive strategies as the situation allows. This can be seen in Bosideng’s response to the challenges posed by the covid-19 pandemic. In the face of the unexpected covid-19 pandemic, in addition to fulfilling its responsibilities as a brand that "Brings warmth to the world" by donating more than 150,000 high-quality down jackets with a total value of RMB 300 million to those people working on the frontline of the pandemic across China, including the hardest-hit Wuhan, Hubei and areas plauged with cold spell in later spring, Bosideng has taken effective action at the retail level. By relying on the brand's digital retail platforms, digital supply chain platform and digital logistics platform, it has adopted a flexible model where consumers no longer need to set foot in a physical store to enjoy shopping and contactless services to better connect with consumers and provide consumers around the world with safer and more diverse consumption experience.
Bosideng down jackets worth RMB 300 million for frontliners
It is understood that Bosideng will take a series of steps to promote digitalization, including joining hands with Alibaba to build a global data center as an important measure for brand building in 2020. Bosideng empowers new retail models with digital marketing to promote internal adjustment and external sales, integrate online and offline channels, and help provide consumers with more precise interaction and services. It can be seen from these actions that Bosideng's success in maintaining dominance in the market is inseparably attributed to its strategies that add equal importance to soft and hard power.
Capital market "heartened" by Bosideng
Hit by the overall economic environment, it is difficult to get started in 2020. As other major industries are either poised for action or strugging to maintain status quo, Bosideng bolstered the confidence of the capital market with the release of its financial reports for fiscal 2019/2020. Bosideng is a constituent stock of the Hang Seng Composite LargeCap and MidCap Indexes and a constituent stock of the MSCI China Index, known as a weathervane of international investment. It has been covered for the first time by well-known overseas brokers such as Bank of America Merrill Lynch, rated "buy".
Furthermore, Bosideng's 45 years of commitment to and continued innovation of down jackets have also won a good reputation in the market. According to data released by Ipsos, the world’s third-ranked market research company, Bosideng’s recognition among Chinese consumers is as high as 97%, making it the number one down jacket brand in the eyes of consumers. With innovation and upgrading of down jacket design and professional features, Bosideng was also awarded the "World's Most Popular Down Jacket of the Year" in the clothing category by Sina Fashion Style Awards 2019.
In the long run, every challenge is an opportunity for expansion. Actions taken to turn crises into opportunities and upgrade brands vary from company to company. However, we have every reason to believe that nothing, even the unexpected outbreak of the covid-19 pandemic, can stop Bosideng, a leading company of the Chinese clothing industry, from being the frontrunner in future competitions.