--- title: "From viral mouthwash to IPO: Can Xiao Kuo Technology's traffic miracle withstand the cycle?" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/39612912.md" description: "A probiotic mouthwash sold over 100 million yuan within 80 days, with this achievement, Xiaokuo Technology directly proved that traffic can rewrite the growth curve of an industry. But as it stands at the doorstep of a Hong Kong stock IPO, the real question the market is asking is whether this growth is a victory of brand power or an overdraft of traffic dividends? Recently, this oral care product group originating from Shenzhen has submitted its prospectus to the Hong Kong Stock Exchange. Starting from grassroots entrepreneurship, yet able to root itself in Douyin's traffic algorithm and even get investment from ByteDance—what is the true nature of this traffic-driven brand operation enterprise? How long is the lifecycle of its core hit brand "Canban"? With a high gross margin of 70%..." datetime: "2026-03-30T12:34:20.000Z" locales: - [en](https://longbridge.com/en/topics/39612912.md) - [zh-CN](https://longbridge.com/zh-CN/topics/39612912.md) - [zh-HK](https://longbridge.com/zh-HK/topics/39612912.md) author: "[松果财经Pinecone](https://longbridge.com/en/profiles/26955235.md)" --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/topics/39612912.md) | [繁體中文](https://longbridge.com/zh-HK/topics/39612912.md) # From viral mouthwash to IPO: Can Xiao Kuo Technology's traffic miracle withstand the cycle? A probiotic mouthwash sold over a billion yuan within 80 days, with this achievement, Xiaokuo Technology has directly proven that traffic can rewrite the growth curve of an industry. But as it stands at the doorstep of a Hong Kong IPO, the market's real question is whether this growth is a victory of brand power or an overdraft of traffic dividends. Recently, this oral care product group originating from Shenzhen has submitted its prospectus to the Hong Kong Stock Exchange. A grassroots startup, it has managed to root itself in Douyin's traffic algorithms and even received investment from ByteDance. What is the true nature of this traffic-driven brand operation company? How long is the lifecycle of its core hit brand "Shenban"? **70% High Gross Margin, Yet Unable to Fill the Marketing Black Hole?** In China's highly mature and oligopoly-dominated oral care industry, the rise of Xiaokuo Technology is essentially a path substitution. Traditional brands represented by Yunnan Baiyao, Colgate, and Hawley & Hazel rely on offline channels, functional mindshare, and long-term brand building to construct their moats. As a latecomer, Xiaokuo wisely circumvented this system. Leveraging content platforms like Douyin and Xiaohongshu, it directly reshaped the consumer decision-making chain through KOL seeding and frequent new product launches, transforming oral care from a functional category into a fast-moving consumer good with aesthetic and social attributes. This model has brought astonishing growth efficiency. Data shows that "Shenban" portable mouthwash has cumulatively sold nearly 300 million units to date; by 2025 retail sales, the company ranked second in China's mouthwash market; in terms of revenue, it jumped from nearly 1.1 billion yuan to 2.5 billion yuan over three years, with a compound annual growth rate of 51%, and even achieved an 82.5% year-on-year surge in 2025. This explosive growth, combined with a high gross margin of around 70%, far exceeding that of traditional FMCG companies, is enough to make any investor envious. This also explains why this non-elite, grassroots-founded company has successively received investments from institutions like Plum Ventures, Shiji Jinyuan, and ByteDance since its inception. Its valuation had exceeded 1.87 billion yuan by 2019. However, beneath the surface brilliance, the fragility of its business model is laid bare. In the consumer goods industry, gross margin is the facade, while net profit is the substance. And Xiaokuo's substance has been almost hollowed out by high marketing expenses. Over the past three years, its sales expense ratio has consistently remained above 60%. In comparison, the sales expense ratio of traditional giant Yunnan Baiyao is only around 10%. Even the parent company of Lengsuanling, often criticized for heavy marketing, has a sales expense ratio far lower than Xiaokuo's. This means the company is essentially trading continuous traffic investment for growth. This model works during the traffic dividend period, but once traffic costs rise or platform rules change, its profitability will come under pressure quickly. The book loss in 2025, although mainly due to share-based payments, also amplified this instability to some extent. Even after adjusting for non-cash factors, with adjusted net profit reaching 155 million yuan, its profit quality is still difficult to compare with that of traditional FMCG giants. In other words, the core contradiction for Xiaokuo Technology currently is that it completed a cold start at internet speed but has not yet established the slow variables that a consumer goods company should have. **To Become "China's P&G", What is Xiaokuo Lacking?** To break its dependence on the single oral care track and to better leverage its control over algorithms and traffic acquisition advantages, Xiaokuo Technology is trying to tell a grander story: becoming the Chinese version of P&G. In 2025, Xiaokuo launched the personal care brand "Little Arrow", entering markets like shampoo and body wash, attempting to replicate its path of achieving hit breakthroughs through traffic-driven strategies in the oral care field. From a capital narrative perspective, this is a logical step: the oral care market has limited growth potential, while the personal care track offers more space and imagination. However, the birth of all FMCG giants has never relied on simple category stacking. P&G's core competitiveness lies in its profound R&D system and multi-brand synergistic matrix capability. Whether it's Head & Shoulders, Pantene, or SK-II, they are essentially built on long-term technological accumulation and brand stratification. Xiaokuo currently has over 500 SKUs, but it relies more on an OEM system, and its R&D expense ratio was only 0.8% in 2025, a mere fraction of its sales expenses. This means its product innovation remains at the level of packaging and concepts. In terms of results, the new business has yet to form a support. In 2025, the revenue contribution of new brands like "Little Arrow" was only 0.3%, almost negligible. This means the so-called second growth curve remains at the narrative stage. The deeper issue is that this expansion is more like a defensive move. In the context of capital market preference for growth stories, the company needs to continuously expand its boundaries to support valuation imagination. However, without the support of core technology and organizational capability, premature multi-front operations may instead disperse resources, causing it to lose its advantage in the main battlefield of oral care. From an investment perspective, the key for Xiaokuo now is not simply to do more categories, but to truly build cross-category replication capability. If it fails, then "China's P&G" is more like an unfulfilled long-term option. **A Product Power Elimination Race at a Historical Turning Point Has Begun** Zooming out to the macro level, Xiaokuo's IPO is at a delicate historical juncture. Looking back at the last decade of China's mass consumption, during this phase, the "Internet+" mindset comprehensively reshaped the production and sales logic of the entire society. "How to leverage traffic to grow big and strong" became the core proposition for consumer brands. In the coming decade, the question is becoming "How to prove 'product power' in global competition". The service consumption share in OECD countries is as high as 60%-70%, while China's is only 45%. This means future competition will no longer be limited to the physical attributes of products, but to the service, cultural, and technological value carried by brands. The macro level has already given clear signals. In a 2025 report, the National Development and Reform Commission clearly stated that China's consumption is shifting from survival-oriented to development-oriented, and the public's pursuit of quality is the foundation for social advancement; at the implementation level, it further specified the goal of creating 3 trillion-level and 10 hundred-billion-level high-quality consumption fields by 2027, as well as globally renowned Chinese consumer goods. This means the era's requirements for "Made in China" are undergoing a qualitative change. At this point, the competition Xiaokuo faces is no longer just Yunnan Baiyao or Colgate, but the selection mechanism within the entire industrial upgrading process. The traffic dividends it previously relied on are gradually fading; the R&D and product capabilities it has yet to strengthen are becoming the key threshold for future competition. Meanwhile, international brands are accelerating localization, domestic giants are accelerating rejuvenation, and homogenized competition among new consumer brands is intensifying. This determines that traffic-driven strategies are shifting from an advantage to a standard. More severely, once entering the deep waters of offline channels, Xiaokuo will face higher entry costs and a more complex competitive structure. Channel fees, inventory management, and brand premium capability will all become new tests. Therefore, what Xiaokuo Technology truly faces is an elimination race of epochal proportions. **Conclusion** The IPO of Xiaokuo Technology is a watershed. It represents both a successful sample of new consumer brands in the traffic era and exposes the inherent limits of this model. Moving forward, the market will no longer pay for growth itself, but will question the quality and sustainability behind the growth. That is the real answer that determines how far it can go. Source: Songguo Finance ### Related Stocks - [Yunnan Baiyao (000538.CN)](https://longbridge.com/en/quote/000538.CN.md) - [The Procter & Gamble Company (PG.US)](https://longbridge.com/en/quote/PG.US.md) - [ByteDance (BYTED.NA)](https://longbridge.com/en/quote/BYTED.NA.md) - [Colgate-Palmolive Company (CL.US)](https://longbridge.com/en/quote/CL.US.md)