On the evening of August 8, Xilinmen released its performance report for the first half of 2023. According to the financial report, in the first half of 2023, Xilinmen's operating income will be about 3.805 billion yuan, a year-on-year increase of 5.53%; the net profit attributable to shareholders of listed companies will be about 222 million yuan, a year-on-year increase of 1.2%.
If you only look at this financial report, the growth data of Xilinmen can only be said to be average. From 2012 to 2022, Xilinmen's revenue has increased from 897 million yuan to 7.839 billion yuan, making it the "first mattress stock". In contrast, the performance growth in the first half of 2023 will not be impressive.
However, if you look at the overall market, Xilinmen has already outperformed most of its peers.
In the first half of the year, the recovery of the furniture manufacturing industry was less than expected. According to the data of industrial enterprises above designated size in the country from January to June 2023 released by the National Bureau of Statistics, from January to June, the operating income of the furniture manufacturing industry was 289.82 billion yuan, a year-on-year decrease of 9.9%; the total profit was 13.2 billion yuan, a year-on-year decrease of 1.9%.
Although the decline in furniture and other industries has continued to narrow this year, and terminal consumption has shown a steady recovery trend, it is not easy to get back on track due to the long upstream and downstream chains and large scale of household consumption.
In this process, there must be brands that continue to decline and eventually withdraw from the market, and there must also be brands that undergo comprehensive changes and run out of speed. Then, around bedding, the core consumer category in the home furnishing market, how to dig out the "password" of the driving force for recovery?
With the release of the semi-annual report, Xilinmen gave its answer.
1. Interpretation of Xilinmen's financial report by three factors
Growth against the trend must have a "secret".
Looking into the financial report of Xilinmen, Songuo Finance believes that there are three main reasons:
First, Xilinmen continued to promote the marketization mechanism of research and development, grasped the emerging needs of the market, and used the stage of "618 promotion" to drive the growth of the overall performance.
During the "618" period this year, the sales of Xilinmen's entire network were nearly 1 billion yuan, accounting for about a quarter of the revenue in the first half of the year, and sales increased by nearly 69% compared with the same period last year. According to the battle report, Xilinmen’s sales on the Jingdong platform increased by 123% year-on-year, and sales on the Douyin channel increased by 251% year-on-year.
The high growth of multi-channel sales is inseparable from the exploration of market segmentation needs and the creation of popular single products. For example, "fairy bed", children's mattress series, suitable for the elderly and other products.
According to the "White Paper on "Home Life" Trends in 2023" jointly released by Aoweiyun.com, Xiaohongshu, Qingnianzhi and Andi AD, Xilinmen seized the aesthetic trend of "cream style" and launched the "fairy bed" in May-June. rise quickly.
Source: "White Paper on "Home Life" Trends in 2023"
In addition, through products such as children's mattress series and elderly series, Xilinmen accurately matches the different needs of segmented customer groups, including providing "puff sofa" with leather massage function for the elderly.
Second, the rejuvenation of sleep disorders is also one of the driving forces for Xilinmen's performance growth.
Entertainment behaviors such as watching dramas on mobile phones and reading novels, as well as factors such as work and life pressure, have caused more and more young consumers to suffer from insomnia. According to the "2023-2024 China Sleep Economy Industry Development and Consumer Demand Research Report" released by iiMedia Consulting, the sleep economy has entered a period of rapid development in recent years, and the market size will reach 495.58 billion yuan in 2023.
From another data, we can also feel the insomnia and anxiety of young people in the contemporary workplace: According to data from Ele.me, the market size of China's ready-made coffee has increased from 28.4 billion yuan in 2017 to 119.1 billion yuan in 2022, with a compound annual growth rate More than 30%. In 2022, the size of the coffee consumer group will increase to nearly three times that of 2020, and the main consumer groups will become younger and younger.
Source: Are you hungry
The coffee consumption of young people is not unrelated to sleep problems such as less sleep and average sleep quality. Focusing on the sleep problems of Chinese people and popularizing sleep health is also the long-term growth driver of Xilinmen.
Thirdly, the demand for replacement of bedding and the growth of demand in the B-end market have brought new market opportunities for Xilinmen.
In the home furnishing industry, compared with wooden products such as wardrobes and cabinets, mattresses and sofas are sub-categories with relatively high consumption frequency. Relevant data show that the replacement frequency of mattresses in American households is 2-3 years. In contrast, the frequency of mattress consumption in my country has a large room for improvement.
At the same time, the income from independent brand engineering channels is also an increase that cannot be ignored. In recent years, Xilinmen has been expanding the B-end market, including high-star hotel management companies, chain hotel groups, serviced apartments and other customers. By exploring new cooperation models with hotels, such as empowering existing hotels to upgrade and renovate, creating new market demands, co-operating with hotels, creating more diverse themed releases, upgrading users' sleeping experience in hotels, and quickly monetizing O2O experience, we achieved More earnings.
In short, new consumer demand, new potential energy of deep sleep and new market opportunities jointly supported the growth of Xilinmen in the first half of the year. With the release of a series of policies to promote consumption, the inflection point of the home furnishing industry has arrived in the second half of the year.
As one of the "Four King Kongs" of consumption, home furnishing is a key area for the recovery and expansion of consumption. On July 18, the "Notice of 13 Departments including the Ministry of Commerce on Several Measures to Promote Home Furnishing Consumption" was released, involving the upstream and downstream of the home furnishing industry chain and the measures to promote consumption are relatively clear.
So, how can Xilinmen take advantage of the recovery of consumption to take it to a higher level?
2. Two major logics to see the driving force of healthy sleep growth
Whether it is new market demand, new potential energy, or strong policy support, they are all exogenous driving forces. How to find differentiated competition points and create more endogenous driving forces for brand growth is the key for Xilinmen to continue to lead the sleep economy.
Today, the bedding market is highly competitive, and the industry is still in the process of accelerating clearing and head concentration. According to the Securities Times, the CR5 of my country's mattress market in 2020 is only 16%, which is far lower than the 51% of the US market. As the brand with the largest domestic mattress market share, Xilinmen's market share is only 4.4%, indicating that its growth space is still broad.
In the view of Songuo Finance, at present, the intergenerational change of consumers and the change of media channels have created two new growth logics for the sleep home furnishing market.
First, consumption upgrades have begun to reverse product innovation. Under the trend of intelligence, digitalization and greenization, product power is becoming more and more important to brands.
At present, my country's smart home industry is entering a rapid development channel after continuous exploration and evolution. From the several measures introduced by the Ministry of Commerce and other 13 departments to promote home consumption, we can see one or two: the policy proposes "innovating to cultivate smart consumption", "supporting residents to replace or purchase new green smart home products", and supporting enterprises to carry out research and development of personalized smart home products , guide the smart interconnection of the whole house, and increase the penetration rate of smart home parts and strengthen the logic.
Specific to the field of sleep home furnishing, with consumption upgrades and the rise of the concept of healthy sleep, how to improve consumers' sleep experience through intelligent technology has become crucial.
Judging from the first half of the year, Xilinmen continued to increase the intensity of "sleep upgrade".
On the one hand, looking at R&D investment, Xilinmen’s R&D investment continues to grow. According to the financial report, Xilinmen invested 80.1867 million yuan in the first half of the year. In recent years, Xilinmen's research and development investment has increased year by year.
On the other hand, from the perspective of intelligent products, Xilinmen is obviously exploring the combination of intelligent deep sleep technology with consumer pain points and needs, and implementing specific scenarios.
For example, Xilinmen launched a smart latex pad that cares about the health of parents. It relies on high-precision non-inductive monitoring technology to monitor the sleep quality of the elderly and generate a professional sleep report. At the same time, the mattress can also be set as a reminder to leave the bed for a long time, so that children can learn about the sleep health data of the elderly anytime, anywhere. Obviously, this product not only captures the sleep health problems of the elderly, but also aims at the filial piety of children, and landed in the scene of intelligent sleep care.
It can be seen that Xilinmen hopes to highlight more uniqueness while catering to the needs of consumers to upgrade their sleep experience.
It is worth mentioning that in addition to product innovation, the sleep market has another major growth logic: the rise of emerging channels has brought about changes in brand marketing methods, which is also an opportunity for brand transformation and upgrading.
With the development of platforms such as Xiaohongshu and Douyin, brand-new consumption habits of consumers are taking shape. Brands need to make more innovations in marketing, from the cultivation of awareness to the accumulation of word-of-mouth.
Source: "White Paper on "Home Life" Trends in 2023"
The focus of brand marketing is to compete for users' mental cognition, among which high-quality interaction is the key. The biggest feature of new consumer platforms such as Douyin and Xiaohongshu is that they have subverted the marketing method of one-way output of brands and are more social.
In response to these characteristics, Xilinmen explored emotional marketing methods in the first half of the year and launched the theme marketing of "the power behind". Use the "power behind" of different groups of people as the anchor point to throw out to the public, attracting users to share their "power behind" stories. By collecting stories, Xilinmen has achieved empathy with more groups.
From this, we can see that Xilinmen is exploring new digital marketing, building a new brand public domain traffic content ecology, and increasing brand rejuvenation and renewal.
Of course, just like technology research and development that requires continuous investment for many years, the innovation of the marketing system is also a long-term project. For Xilinmen to build a good media effect evaluation system for planting grass and further improve the conversion efficiency of the platform, it needs more tenacious and long-lasting perseverance.
In any case, the innovation trend in the field of healthy sleep has started at the end of Qingping, and the competition of sleep furniture brands is expanding from channels and prices to more dimensions such as technology and brand thinking. Stand firmly on the brand positioning of "deep good sleep", Xilinmen is still on the way.
Source: Songuo Finance