"Rongmei" Will Be Born Soon?

The development of e-commerce has entered a fast lane. The first batch of "Taobao brands" relying on e-commerce have also entered a bumper harvest period, and are seeking to be listed "to a higher level".

Three squirrels selling snacks, yujiahui selling yunifang facial mask, and Xiaoxiong electric appliance, which sells kitchen appliances, will land in a shares. If you include the overseas capital market, you can also add Ruhan holding.

However, in the most important category of e-commerce women's clothing plate, so far, no A-share listed company has been born.

Although the small industry giants Huimei fashion (its brands Chuyu, yinman) and split silk shares (its brand split silk) disclosed that their IPO prospectuses impacted the gem as early as 2016, they had to wait for many years without any results. In the first half of this year, it was even more reported that handu clothing had terminated the A-share listing guidance.

Recently, the application for listing on the gem of Rongmei shares, the industry's "little sister", has been accepted, or overtaking on the curve will become the first share of A-share women's clothing "Amoy brand".

Against the trend, the gross profit rate increased sharply?

On July 31, rihe Rongmei Co., Ltd. (hereinafter referred to as "Rongmei") disclosed its IPO prospectus and planned to raise 601 million yuan on the gem, mainly for the construction of production bases.

Rongmei's main business is online clothing brand retail. Relying on the "Rongmei rumere" brand, the annual SPU reaches 4000 models, which are sold through tmall and Taobao.

The upstream relies on garment manufacturers, while the downstream sells through e-commerce channels. The company says its main competitiveness lies in planning and design and supply chain management.

From 2017 to 2019, Rongmei's operating revenue was 585 million yuan, 704 million yuan and 694 million yuan respectively, and the net profit attributable to the parent company was 69.9408 million yuan, 100 million yuan and 110 million yuan respectively.

In 2019, the company's operating income decreased by 1.42% year-on-year, but the company's net profit attributable to its parent company increased by 10% year-on-year because of the substantial growth of gross profit rate against the industry.

China's women's wear industry is very large, with sales exceeding 1 trillion yuan in 2019, more than the sum of men's and children's wear, accounting for nearly half of the clothing industry.

At the same time, the competition in women's wear industry is extremely fierce. According to the data disclosed by Euromonitor, the market share of the top ten brands in China's women's wear industry will be 8.4% in 2019, and the market share of the top ten brands in men's wear industry will be 18.9%.

Therefore, in recent years, the life of the whole industry is not easy, even the head enterprises are no exception. Anzheng fashion increased revenue but not profit. The performance of GELIS, taipingniao, Jinhong group and langzi shares declined, and lashabel suffered huge losses, and almost no one was better off.

Can Rongmei be the most difficult year to be affected by the epidemic situation in 2020?

Focus on Taobao channel?

After Taobao upgraded and launched tmall mall, Alibaba platform has realized differentiated development. Brand merchants take tmall mall as the main channel. Taobao is more suitable for small and medium-sized sellers and focuses on cost performance.

From the sales ranking of "double 11" clothing stores in 2019, the top ten brands of tmall are UNIQLO, bosden, SEMAR, GXG, etc., while most of Taobao's top ten are online celebrity sellers such as my favorite wardrobe, Sydney custom-made and k-sister's homemade women's clothing.

In terms of scale, there is a huge difference between the two platforms. Last year, ASM Anna, the number one clothing seller in Taobao, achieved sales of 322 million yuan, which even failed to rank in the top 10 of tmall's "double 11" campaign.

As a "Taobao brand", Rongmei shares owns three stores, namely, "Rongmei high-end women's wear" Taobao store, tmall's "rumere flagship store" and "rongmee flagship store".

However, the company went against the trend of the industry and vigorously supported Taobao store, which accounted for more than 99% of the company's operating revenue year by year, and the sales volume of the two tmall stores decreased from more than 30 million yuan to less than 5 million yuan during the reporting period.

As of 6:00 p.m. on August 6, 2020, the number of fans in rumere flagship store and Rongmei flagship store were 252000 and 215000 respectively, and the number of fans in Rongmei's high-end women's clothing Taobao store was 4.352 million.

As a Taobao brand, tmall mall abandons the branding and focuses on the low-end Taobao channel, which is not conducive to the long-term development of the brand.

From the operation data of Rongmei shares, the downward trend is still very obvious.

In 2019, the company's key operating indicators such as the number of orders, the number of buyer ID, the average order price, and the total order amount will decline comprehensively. On the other hand, in 2019, the company's sales volume decreased by 7.27%, and the average price of products increased by 6.27%.

Even if the company substantially increased its marketing investment in 2019, and the promotion fee project in the sales expenses increased by nearly 40%, it still could not reverse the fate of the company's revenue decline.

After 80's founded a couple's shop

Amoy brand is not established for a long time. Huimei fashion was founded in 1998 as a clothing enterprise mainly engaged in foreign trade. It took years for Huimei fashion to expand its own brand with the help of e-commerce. Handu clothing house was established in 2008, and split silk Co., Ltd. was established in 2011. By contrast, Rongmei shares are younger.

In 2012, Guo Jian and Wendi, a couple born in 1980s, jointly founded Rongmei. Before that, none of them had any experience in the clothing industry. Guo Jian was a long-term analyst and trader, and Wendy worked in China Telecom.

Rongmei Co., Ltd. recruited Zhu Zhengjun from Jiangsu Panjia flax textile factory in 2015 to serve as director and deputy general manager. In 2017, Rongmei recruited Yu Qingtao from Everbright to take on four major positions, namely, director, deputy general manager, financial director and Director Secretary, forming the core team of the company. It is worth mentioning that these two core personnel, also born in the 1980s, are about the same age as the founders.

Rongmei shares is a typical "husband and wife shop". The largest shareholder Rongmei ingenuity is 50% owned by Guo Jian and Wendi, together with their respective shares, controlling 98.24% of the shares before the issuance of the company. The other 1.76% of the shares are held by Zhu Zhengjun and Yu Qingtao.