In the first half of 2024, under the multiple influences of insufficient effective domestic demand, economic differentiation, escalating geopolitical risks, and increasing external uncertainties, the overall consumer market environment is weak, which is an unspoken consensus within and outside the consumer industry.
For consumer enterprises, a weak consumption environment is not a favorable survival environment. However, this does not mean that consumer enterprises in this situation have no effective strategies to deal with it. In his book &#34;Management,&#34; Inamori Kazuo, known as the &#34;Saint of Management&#34; in Japan and having experienced multiple economic cycles, pointed out that the moment a company enters a state of complacency is the beginning of its decline. To avoid this situation, it is necessary to continuously venture into new businesses and achieve success.
This development concept can also be glimpsed from the continuously innovative leading daily chemical enterprise Blue Moon (06993).
On August 22, Blue Moon disclosed its performance report for the first half of 2024. The financial data shows that in the first half of the year, the company recorded revenue of HKD 3.131 billion, an increase of approximately 40.9% year-on-year; and a net loss of HKD 664 million. The reason for the loss is attributed to the company's insistence on &#34;venturing into new businesses,&#34; which led to a significant increase in sales and distribution expenses due to the vigorous promotion of new products, expansion of new e-commerce channels, and brand building business during the period.
Looking at the evolution of Blue Moon's products, since promoting the upgrade from &#34;powder&#34; to &#34;liquid&#34; category in 2008, creating the era of liquid laundry detergent in China, its pace of &#34;innovation&#34; has never stopped. In 2015, it launched the &#34;Concentrated+&#34; laundry detergent for machine washing, once again leading an industry transformation from &#34;traditional laundry detergent&#34; to &#34;concentrated laundry detergent.&#34; Then in August 2024, the company launched the &#34;All-in-One Supreme&#34; new product during the Blue Moon Festival, further enriching the connotation of the new era of laundry.
Whether in prosperity or adversity, Blue Moon's consistent innovation undoubtedly requires a considerable amount of financial and material resources, thereby exerting certain pressure on profit margins. However, from a long-term perspective, by continuously innovating to create more value for users, the industry, and society, as well as providing a better cleaning experience, it will further promote the company's long-term high-quality development.
Next, let's further explore the company's philosophy of gaining long-term development momentum through its latest financial report and strategic actions.
<h2>Behind the Losses: &#34;Attacking the City&#34; is More Important than &#34;Defending the City&#34;</h2>
Looking back at the domestic and international laundry detergent market in recent years, it is undeniable that the current laundry detergent industry is in a new consumption era where consumption upgrades and expansion are taking place simultaneously, with high-quality and high-functional demands coexisting.
According to the &#34;2022-2026 Laundry Detergent Market Status Survey and Development Prospects Analysis Report,&#34; globally, laundry detergents have a clear trend of vertical product iteration, and they generally follow two parallel paths: liquidation and concentration. The mainstream products transition from &#34;soap-powder-liquid,&#34; with continuous improvements in product performance; and concentration, with improvements in surfactant formulations and increased active ingredient content. Laundry additives mainly show multifunctionality to meet various needs such as softening, fragrance enhancement, odor removal, and anti-static properties
It is worth noting that the change and improvement in consumer awareness bring new market opportunities to the laundry detergent industry. At the same time, it also means that laundry detergent brands need to stand at the forefront of the industry, continuously innovate with a more forward-looking perspective, in order to anchor industry development dividends with strong product power.
In this regard, BLUE MOON GROUP clearly understands this well.
In 2015, BLUE MOON GROUP took the lead in launching the Supreme Concentrated+ laundry detergent, promoting the industry's &#34;concentration&#34; transformation. In 2018, it upgraded to launch the Supreme Biotechnology laundry detergent, meeting users' diverse needs, continuously improving product efficacy, and enriching the product matrix through upgrades and iterations. This year at the BLUE MOON FESTIVAL, the Supreme Biotechnology laundry detergent (All-Purpose Clean) made a grand debut. As the culmination of ten years of supreme product functionality, the all-purpose new product can dissolve in water upon entry, adapt to a 15-minute quick wash mode, achieve super cleanliness with no residue. It also has multiple stain removal, all-purpose cleaning, diverse deodorizing, and 72-hour long-lasting fragrance functions, meeting different consumers' laundry needs accurately with one bottle.
It is worth mentioning that the BLUE MOON GROUP's Supreme series laundry detergent adopts the &#34;Concentrated+&#34; formula, with up to 47% active ingredient content, three times that of the national standard laundry detergent, thus bringing outstanding cleaning effects. Based on the &#34;Concentrated+&#34; formula, coupled with more detailed product functions, the Supreme series laundry detergent provides an efficient and worry-free cleaning method, breaking the traditional laundry concept of the masses and leading the arrival of a new era of laundry.
However, for enterprises to gain long-term sustainable development momentum, innovation alone is not enough. It is also necessary to continuously establish deep connections and communication with consumers, bringing more experiences and knowledge to consumers.
This also means that while BLUE MOON GROUP is increasing its innovation efforts, it also needs to increase marketing investment, cultivate consumer mindshare, and strengthen its connection with consumers.
By sparing no effort to cultivate consumer mindshare, this is also the reason for BLUE MOON GROUP's loss in the first half of the year.
Regarding the reasons for the profit loss in the first half of the year, BLUE MOON GROUP explained in its financial report that it was mainly due to the increase in sales activities leading to the growth of sales and distribution expenses, especially in promoting new products, expanding new e-commerce channels, and brand building business.
Specifically, in the first half of 2024, facing continuous changes in consumption patterns and demands, BLUE MOON GROUP strategically adjusted the product placement and sales models on e-commerce platforms to more effectively reach more consumers. For example, increasing marketing investment in live e-commerce, inviting top influencers to livestream sales; while reaching a broader consumer base, it also achieved a significant increase in sales volume. According to data disclosed by BLUE MOON GROUP, during the &#34;618&#34; shopping festival, the group ranked first in cumulative sales on multiple mainstream e-commerce platforms.
In addition to live streaming, BLUE MOON GROUP actively engages with consumer groups through various marketing activities. For example, organizing events like &#34;BLUE MOON FESTIVAL&#34; and &#34;Supreme Clean Journey,&#34; inviting consumers to exchange laundry experiences face-to-face and experience the charm of the products
It is worth mentioning that in the astronomical phenomenon of the &#34;super moon&#34; on August 20th this year, BLUE MOON launched the #拍一拍灯月相映图# activity on platforms such as Weibo and Douyin, inviting consumers to take the most beautiful pictures of the moon and lanterns, passing on their expectations for luck, further narrowing the distance between the brand and consumers. During the live broadcast event with CCTV Super Brand Day, BLUE MOON also carefully created common laundry pain point scenarios such as dining, sports, and home, inviting host Sa Beining to become the &#34;clean experience officer,&#34; challenging consumers to remove stubborn hotpot stains, post-exercise sweat odors, and find &#34;invisible stains&#34; in daily life, experiencing the charm of BLUE MOON's &#34;cleaning three secrets&#34; firsthand.
<img src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20240826/1724638295824404.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image 2.png" original-src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20240826/1724638295824404.png"/>
Therefore, due to the current stage where investment exceeds current sales growth, BLUE MOON experienced a loss in the first half of the year.
In theory, as a leading company in the industry, BLUE MOON should achieve steady growth in performance with the Matthew Effect. So why does it still spend a lot of resources and finances to compress profit margins?
Based on the above content, as the era of laundry detergent evolves, consumer demands naturally change as well. Therefore, for BLUE MOON, the key to this answer lies in - &#34;attacking&#34; is more important than &#34;defending&#34;.
Specifically, as the industry continues to evolve, product categories are also accelerating innovation and upgrades. The development law of relying on a single strategy is no longer suitable for a more diversified and quality-oriented market trend. In this context, while good companies find ways to meet user needs and gain good reputation, successful companies strive to create super products, lead the trend of the times, and achieve both reputation and profit.
Therefore, even though cultivating a new market requires more &#34;consumer education&#34; costs, and is even more difficult and risky than taking a share from an existing market, BLUE MOON still spares no effort in cultivating new consumer markets, leading the industry in new trends.
From the 12-year persistence of the BLUE MOON Festival, it can be seen that BLUE MOON has patience and determination in market cultivation layout. As a &#34;exclusive festival&#34; created by BLUE MOON for consumers, BLUE MOON continues to deepen its close relationship with consumers by conveying scientific washing knowledge and clean living habits, continuously consolidating the market awareness of the brand and products. The 12th BLUE MOON Festival has recently been officially launched, and BLUE MOON is conducting a series of exciting activities in collaboration with CCTV Super Brand Day to convey the supreme clean principle to consumers, demonstrate the supreme clean power, and promote a scientific, healthy, and clean lifestyle.
<h2>Behind the Innovation: Anchoring the Future Laundry Growth Space</h2>
Of course, from a more long-term perspective, BLUE MOON, by continuously innovating and leading the industry trend, clearly has more strategic considerations
From leading the industry's leap from &#34;laundry powder&#34; to &#34;laundry liquid&#34; with the introduction of deep clean laundry detergent, to breaking through technological barriers with the launch of the first domestic concentrated + laundry liquid - Machine Wash Supreme, and then innovating to introduce BLUE MOON Supreme Biotechnology Laundry Detergent, leading the industry into the &#34;concentrated +&#34; biotechnology era.
During this period, behind BLUE MOON's continuous disruptive innovation leading the industry's development of new trends, the actual target is the considerable growth space in the new laundry liquid consumer market.
Take the rapidly developing food delivery market in recent years as an example. Before the emergence of food delivery platforms, the public did not have a demand for ordering food online, and even if they did, users were not aware of it themselves. It was not until platforms like Ele.me and Meituan carried out extensive promotions, gradually cultivating the habit of ordering food online, that a business + food delivery platform + user ecosystem was formed, creating a new demand for ordering food and generating a huge industrial consumption chain. Data indicates that the market size of the food delivery industry is expected to reach 1.9 trillion yuan by 2027, with a penetration rate of the industry expected to reach 30.4%.
Therefore, for BLUE MOON, behind the new product iterations leading the industry's new development trends is a vast consumer space.
Based on data. It is reported that before 2008, the public generally used laundry powder and soap, with laundry liquid accounting for less than 4%. BLUE MOON quickly seized the market opportunity with a deep clean laundry detergent, ushering in the era of &#34;liquid&#34; laundry in China. In 2011, specialized laundry detergents for hand washing were introduced based on Chinese laundry habits. In 2018, BLUE MOON Supreme Biotechnology Laundry Detergent was launched.
Since 2008, when BLUE MOON fired the first shot in the domestic laundry liquid market, within 4 years, BLUE MOON's sales skyrocketed to 10 billion, with a market share of 24% across all channels, driving the penetration rate of laundry liquid in China from 4% to 44%. The significant increase in penetration rate undoubtedly released a huge consumer space. According to Frost &amp; Sullivan's speculation, from 2020 to 2024, China's laundry liquid industry will maintain a high average annual compound growth rate of 13.6%, and by 2024, the national laundry liquid industry market size will exceed 50 billion yuan.
Today, in the new era of laundry liquid - the trend of concentrated laundry liquid, there is also significant growth space.
According to a report by Huajing Industry Research Institute, compared to the penetration rate of concentrated laundry liquid in developed countries in Europe and America, the penetration rate of domestic concentrated laundry liquid is significantly lower. In 2019, the penetration rate of concentrated laundry liquid in the United States was 98.8%, while China's market penetration rate was only 8.2%.
At present, with the trend of consumption upgrading, the concentration of laundry liquid has become the general trend. According to statistics, in 2019, the market size of concentrated laundry liquid in China was 2.231 billion yuan, with a penetration rate of 8.2%. It is estimated that by 2024, the market size will reach around 5.5 billion yuan, and the penetration rate will exceed 10%. Compared to regular laundry liquid, concentrated laundry liquid is more convenient to use, with higher cleaning efficiency, thus steadily increasing its penetration rate, and still having great potential in the future.
Therefore, for BLUE MOON, the current early strategic investment is not only aimed at the company's product innovation, but also projects the future growth momentum of the enterprise
<h2>Industry Pioneer Demonstrates Responsibility and Commitment</h2>
In addition, it is worth mentioning that besides anchoring future growth potential, the upgraded Blue Moon supreme laundry detergent also carries some social significance and industry value.
Firstly, from an industry perspective, the compact size of the supreme detergent can help retailers reduce storage space, save transportation costs, increase shelf output, and match emerging channels such as e-commerce.
Secondly, on a social level, the supreme detergent is more environmentally friendly, not only saving water and electricity, but also significantly reducing the packaging materials and overall carbon emissions used in washing. According to the evaluation by the China Cleaning Products Industry Association, if Chinese consumers all use concentrated detergents, it could reduce electricity consumption by 8.567 billion kWh, carbon dioxide emissions by 1.7472 million tons, and washing wastewater by 2.4211 million tons annually.
Overall, in the trend of concentrated laundry detergent, Blue Moon's decision this time to sacrifice &#34;short-term profits&#34; in exchange for &#34;long-term development&#34; strategically demonstrates the company's foresight and efficiency in execution as a leading enterprise.
More specifically, Blue Moon's current early investment will bring more development possibilities to the company and the industry. Firstly, from the perspective of industry development trends, Blue Moon's promotion of concentrated products and the construction of emerging channels are expected to help it become a leader in the era of concentration, projecting the company's growth direction for the next 5 to 10 years. Secondly, having the courage and determination to bear current losses also reflects Blue Moon's confidence and commitment as an industry leader, by sacrificing the company's short-term profits to provide a better laundry experience for more consumers and contribute to the industry's green development.
As the saying goes, &#34;things should be viewed with a long-term perspective,&#34; Blue Moon, venturing into &#34;new businesses,&#34; deserves more expectations and attention from the market

06993

In the first half of 2024, BLUE MOON GROUP announced its financial performance, with revenue increasing by approximately 40.9% to HKD 3.131 billion, but recording a net loss of HKD 664 million. This loss is mainly due to the strategic investment in new products and the expansion of e-commerce channels. BLUE MOON GROUP's business philosophy emphasizes "attacking the city" rather than "defending the city", believing that innovation is the key to corporate development. By continuously launching industry-leading products, BLUE MOON GROUP aims to create higher value for users and promote long-term high-quality development

Insight from Blue Moon Group's semi-annual report: "Attacking the city" is more important than "defending the city"