Text/Photo by Yangcheng Evening News reporter Xu Zhangchao and Ding Ling

　　Recently, Jiaoxia Holdings Co., Ltd. (hereinafter referred to as “Jiaoxia”), a sunscreen company that started with a small black umbrella, officially submitted a prospectus to the Hong Kong Stock Exchange, impacting the “first share of urban outdoor concepts in China”.

According to relevant data, in 2021, Jiaoxia’s total retail sales and online retail sales will be the first, with a market share of 5% and 12.9% respectively, and the online retail sales will be more than 5 times that of the second largest brand.

　　In 2013, Jiaoxia's first product, the double-layer small black umbrella, came out. From sunscreen single product to sunscreen outdoor, to horizontal layout of all urban outdoor categories, how will Jiaoxia stand?

Is the future promising?

　　Marketing revenue accounts for nearly half

　　According to the prospectus, from 2019 to 2021, Jiaoxia’s revenue was 385 million yuan, 794 million yuan and 2.407 billion yuan respectively, with a compound annual growth rate of 150.1%.

During the same period, the adjusted net profit was 19.68 million yuan, 39.41 million yuan and 136 million yuan respectively, and the adjusted net profit margin was 5.1%, 5.0% and 5.6% respectively.

Jiaoxia has been criticized for its high brand premium. Why is the company's net profit not high?

　　The reporter noticed that since the launch of the Little Black Umbrella in 2013, Jiaoxia has embarked on a business routine of "focusing on marketing and ignoring R&D", from celebrity endorsements to Internet celebrities bringing goods, to high-density marketing on multi-traffic platforms, allowing Advertising under bananas has become ubiquitous.

Jiaoxia mentioned in the prospectus that in 2021, Jiaoxia will cooperate with more than 600 KOLs, covering 1.4 billion fans on mainstream media platforms, bringing a total of 4.5 billion page views.

　　How much money did Jiaoxia spend on brand promotion and marketing?

The prospectus revealed that in 2019, 2020 and 2021, Jiaoxia’s distribution and sales expenses were 125 million yuan, 323 million yuan and 1.104 billion yuan, accounting for 32.4%, 40.7% and 45.9% of total revenue, respectively. .

Among them, advertising and marketing expenses (ie "promotional expenses") were 36.917 million yuan, 119 million yuan and 586 million yuan respectively, with a growth rate of 223% and 392%.

　　Jiaoxia emphasized the importance of R&D in its prospectus. However, compared with the sharp rise in advertising and marketing costs, Jiaoxia’s current R&D accounts for a slightly lower proportion of revenue, and the proportion of R&D investment in the past three years has shown a trend of decreasing year by year. .

According to the prospectus, from 2019 to 2021, Jiaoxia’s R&D expenditures were 19.9 million yuan, 35.9 million yuan and 71.6 million yuan respectively, accounting for 5.3%, 4.6% and 3.0% of total revenue, respectively.

　　What is the future brand development of Jiaoxia, which is questioned for its low cost performance and low R&D investment?

Some people in the industry believe that the marketing-driven business foundation is more fragile than the technology-driven business. Jiaoxia may have higher risks in terms of future revenue and growth. Therefore, it may be difficult to obtain an ideal valuation or liquidity in the secondary market in Hong Kong. Sexuality, may repeat the mistakes of Yixian e-commerce after listing.

　　Transition "story" with unclear prospects

　　In front of the Jiaoxia store in Wanlinghui, Tianhe, Guangzhou, delicate plant and flower patterns are printed on the inner cloth of the two open sunshades.

From time to time, there are young female customers shopping in the store.

Xiao Yang, a young woman who was trying out a sun hat, told the reporter that she had never bought the products from Jiaoxia. After buying the sun hat and ice silk sleeves from this company, she felt that the sun protection effect was very good and recommended it to her. Just stopped by to take a look.

　　In Jiaoxia’s flagship store on JD.com, Jiaoxia, which targets the outdoor product market for young women, also launched a variety of outdoor products for men, such as fisherman hats, quick-drying windbreakers, ice silk sleeves, and straight-handled umbrellas.

However, the reporter noticed that almost all the sunscreen products displayed on the shelves of Wanlinghui's Jiaoxia store are women's models.

The staff of the Jiaoxia store told reporters that at present, the store does not display sunscreen products for men due to the small display area.

　　Deeply cultivating the women's outdoor product market is undoubtedly the positioning of Jiaoxia when it was first established. Now Jiaoxia is shifting from a single sunscreen product to a full-category urban outdoor business.

According to the prospectus, since 2017, Jiaoxia has extended its product categories from umbrellas to non-umbrella sunscreen products such as sleeves and hats, and by 2021, Jiaoxia has expanded its scale from sunscreen products to non-sunscreen outdoor products. It looks more like an outdoor "grocery store".

　　In addition to sunscreen products, the Tmall flagship store in Jiaoxia also includes canvas shoes, Martin boots, interiors, thermal clothing and accessories.

At the same time, Jiaoxia's target customer group has also changed, from young modern women to groups of different ages and genders.

However, judging from the product sales of Tmall and Jingdong flagship stores under Jiaoxia, the highest sales are still a series of women's sunscreen products such as umbrellas, sunscreen masks, and sunscreen clothing, which are mainly for "pleasant" consumption.

　　Mr. Lin, born in the 1980s, who was shopping in Wanlinghui, told reporters that sunshades are not a necessity for him. He has a banana umbrella given to him by his relatives. The only difference between Jiaoxia and other brands is "expensive".

Can the "sunscreen anxiety" of young female customers spread to other consumer groups?

How big is the real demand for sunscreen products?

　　Industry insiders said that daily commuting and outdoor sports have very different needs for sun protection. Some daily clothing can actually meet the needs of daily sun protection. As a market segment of outdoor sports, sun protection is not only a product of professionalism and brand power. Shang and Jiaoxia are not enough to compete with traditional outdoor sports brands. Whether the new positioning of "urban outdoor" can continue to bring high growth remains to be seen.

　　The female brand comes from two post-80s engineering men

　　Although it is a brand that focuses on female consumers, the story of Jiaoxia began with two post-80s engineering men.

　　Jiaoxia's founder and CEO Ma Long graduated from East China University of Science and Technology with a major in polymer materials and engineering, and later came to Hong Kong for development.

Being in Shanghai and Hong Kong, two of the most diverse cities, allows Ma Long to observe the changes in people's lifestyles up close.

　　Ma Long found that it was very common for Hong Kong women to participate in various emerging activities such as night running and urban cycling at that time, and in the choice of clothing accessories, they began to deliberately choose some niche brands. Functional differences to emphasize the individuality of the self.

But at that time, few brands in mainland China could satisfy the multiple demands of female consumers for product appearance, function and brand at the same time.

Based on this insight, Malone began planning to start a business.

　　First of all, Ma Long found Lin Ze, a fellow with the same engineering background. After nearly half a year of planning, the two officially established the Jiaoxia brand in 2013.

It is understood that within the group, Ma Long is mainly responsible for product development, supply chain and brand management, while Lin Ze is mainly responsible for marketing and sales.

　　According to CIC, in terms of total retail sales and online retail sales in 2021, Jiaoxia ranks first among Chinese sunscreen apparel brands, with market shares of 5% and 12.9% respectively, of which online retail sales exceed the No. 5 times that of the two major brands.

In addition, among emerging brands in China's footwear and apparel industry with annual retail sales exceeding 1 billion yuan, Jiaoxia also ranks first in terms of retail sales in 2021, and has the fastest growth rate.

　　Before the IPO, Sequoia China held 19.37% of Jiaoxia, the largest institutional shareholder, with Fengqiao Capital holding 6.96% and Huaxing Capital 1.54%.

At the same time, Ma Long, founder and CEO of Jiaoxia, holds 29.07% of the company, and another founder, Lin Ze, holds 27.91%.

In 2013, founders Ma Long and Lin Ze founded Jiaoxia in Hangzhou.

The word Jiaoxia comes from "under the banana leaf", implying that the brand has focused on sun protection needs since its inception.

In the same year, Jiaoxia launched its first sunscreen product, the double-layer black umbrella, which was sold in the Tmall flagship store.

In 2016, Jiaoxia opened its first brand-operated store in Shanghai.

　　(Zhong He)