In front of the Dabao cosmetics counter on the first floor of ganjiakou shopping mall, Miss Wang was sighing with a lot of newly bought Dabao products. "Dabao was also sold. If you buy more now, it will no longer be a national brand. " Between words, there is sadness about the sale of Dabao and helplessness about the fate of the daily chemical industry in China.
At the end of March 2007, American Johnson & Johnson completed the acquisition of Beijing Dabao at a sky-high price of 2.3 billion yuan. The reporter searched online and netizens left tens of thousands of comments on this acquisition. Although up to now, the two sides have not made a specific explanation on the merger, but its impact on the development trend and market structure of the domestic cosmetics industry and its representative significance have begun to make people in the industry talk about it.
As the acquired party, Beijing Dabao Cosmetics Co., Ltd. (referred to as Dabao) is not fragile. First, it is a large state-owned backbone enterprise specializing in the production of cosmetics in China, followed by the most famous cosmetics brand in China. In its ten years of development, through promoting wholesale through retail and establishing Dabao counters, hundreds of counters and thousands of distribution points have been set up in large and medium-sized shopping malls in major cities across the country, covering the primary, secondary and tertiary markets in an all-round way, making it a leader in channel laying among domestic cosmetics enterprises. If advantages and disadvantages grow together, when advantages are incalculable, disadvantages are fatal. In order to pursue rapid market growth, Dabao adopted the principle of quantitative expansion in channel construction. So when Dabao's channel network was successful, the lack of back-office management forced the once symbolic domestic cosmetics company to bow its head.
Wide channels but not strong.
Dabao's huge sales network, which it has always been most proud of, cannot hide its poor control of terminal channels.
Dabao adopts a typical regional agent distribution system, that is, agents buy out products and promote the market in their respective regions for sales and distribution, which can avoid certain risks for enterprises, but it also causes poor management of Dabao channels and inconsistent market prices.
When the reporter called Dabao Company as the owner of an individual cosmetics store, the sales manager of Dabao Beijing entrusted the reporter to an agent in Beijing. The agent told reporters that his sales methods and prices are free and there are no restrictions on Dabao. Therefore, in order to increase the shipment, he always receives the goods from the lower-level dealers or consumers, and the delivery price is unified as the delivery price of Dabao Company. His profit point is the rebate and reward of Yu Dabao manufacturers. "But in fact, what is my delivery price? Dabao Company does not interfere, and there is no management method. In order to increase sales to win rebates and rewards, I can even reduce the freight to below the loading price. " The agent said. Based on this, the product price of its subordinate sellers is even more uncertain.
Therefore, at least from a realistic point of view, Dabao does not have a perfect price system as the support of channel management nationwide. Even in its old base area, Beijing, the prices of products are different. Even some sales counters set up in major supermarkets in Yu Dabao have different prices. For example, a product named Dabao Snow Crystal Vitality Honey has just been on the market for about a year, and the reporter found that there are at least two prices. In Dabao counter of ganjiakou Building in Xicheng District, the price of this product is 53 yuan, while in Fengyi Yikelong Supermarket in Fengtai District, the price of the same product is only 42 yuan, and the price difference is about 20%. Dabao promoter of Yikelong Supermarket told the reporter that the reason for the price difference of different counters lies in the different price increases between stores. The implication is that the final price of Dabao is completely affected by the store. Commenting on Dabao's sales, a netizen wrote, "Dabao's market is immature because there is not even a lowest national unified price." On the website of a Shandong company named Taian Zhong Bai Distribution Co., Ltd., the reporter also got a preliminary understanding of Dabao's channels in other provinces and regions. Our company acts as an agent for skin care products, including Dabao, and determines its own price according to the purchase amount and items of the next-level customers, and has the right to formulate various promotion and gift policies. In addition, the company also provides free delivery for customers who buy a certain amount of goods. The reporter further learned that this agency does not have a clear agency area, and Dabao has no restrictions on whether its different agency conditions affect other agents. "Our Dabao agent here basically doesn't ask about the source and destination," another shopkeeper in Shandong told reporters on QQ.
As a matter of fact, Dabao has no management system and has no ability to restrain its local agents. "Dabao's channel can be described in one word, that is,' wide and wide'", an industry insider joked.
Subsequent negative effects have emerged.
Sales channels are flying all over the sky, which makes the internal management and logistics costs high. In fact, due to the rapid development of market channels, Dabao once had high inventory, high in-process reserve, long production cycle, and could not deliver goods in time, especially unable to effectively control the product inventory and funds of different branches.
Paying too much attention to market sales in the competition makes Dabao eager to complete the improvement of channel and distribution system in the subsequent development, which makes Dabao's channel not only belong to the traditional distribution method, but also lack of logistics distribution system and weak market follow-up service support. These factors are becoming the inducement of low sales and profits. In second-and third-tier cities and even township markets, Dabao's wholesale channels and market influence are still very strong, but due to imperfect channel management, Dabao's terminal market performance is not satisfactory, coupled with the uncertainty of sales prices and cross-selling, its brand image has been greatly affected, and its sales performance in recent years is rarely satisfactory.
According to relevant media reports, in recent years, Dabao's sales have been hovering around 700-800 million yuan, which has come to a standstill. The truth of this stagnation is that Dabao has achieved the ultimate in channel development and coverage, and bottled sales are much higher than other brands. This means that if Dabao does not make adjustments in product market positioning and price, the growth of pure quantity is close to the limit. However, the channel management can't keep up with the above problems, which in turn makes Dabao obviously weak in positioning, price adjustment and profit maintenance.
In terms of product line adjustment, although Dabao has also developed more than a dozen products including day cream and night cream in recent years, under the influence of long-term popular image, these products that try to get rid of low-end positioning have not been successful and their market performance is not satisfactory. Dabao SOD honey, whose market price is about 10 yuan, still stands out as its main product for many years, even accounting for more than 60% of the total sales. The thin product structure makes it difficult for Dabao to cope with the increasingly fierce market competition.
After occupying the first position in the sales volume of domestic skin care enterprises for many years, Dabao's market share has rapidly shrunk from 10% to 1% in recent two years. What is even more worrying is that the profit margin of mid-to high-end cosmetics is generally around 10% ~ 30%, while Dabao only maintains around 2%. Although this is related to Dabao's civilian route, the inadequate management of its logistics channels is also an unavoidable factor. Two years ago, in a domestic mainstream media, Dabao also declared that as a national enterprise, it should persist in development with the operating characteristics of "high quality, low price and facing the public". The original news of Dabao's sale also shows that Dabao only wanted to sell 5 1% of the property rights at first. Obviously, the current sale is not planned by Dabao for a long time, but a decision made in the face of realistic development difficulties. Some insiders once thought that the sale of Dabao's overall property rights should be more related to the business operation mode.
The reporter learned from Dabao's website that Dabao not only has a cosmetics production line, but also set foot in the beauty salon service industry, taxi industry, advertising industry and training industry. And even set up advertising companies, driving schools, Dabao hotels, property management companies, etc. Diversification is the preparation of enterprise transformation, but it is definitely unfavorable to the professional development of enterprises.
The sales of Dabao are somewhat disappointing. Whether it is the backbone of domestic cosmetics, or the well-known friendly image and true feelings, the reasons for its big sale, whether it is the lack of follow-up research and development, or the disparity between marketing ability and competitors who have already pushed into China, or the golden cicada has taken advantage of capital to find another way, all of which have predicted the failure of the current business model of China cosmetics industry.