On June 10, at the 2020 strategic conference of Mengjie, Jiang tianwu, chairman of Mengjie and Li Jing, general manager of Mengjie were interviewed by the reporter of the economic observer, and answered most of the questions about Mengjie.
Why we signed with Weiya
On May 11, 2020, Mengjie Co., Ltd. signed a strategic cooperation agreement with Qianxun culture, an e-commerce live broadcast organization. The company will cooperate with Weiya, Taobao anchor of Qianxun culture, in consumer feedback, product sales, Weiya portrait rights, public welfare and other aspects.
Weiya is currently the most popular live broadcast anchor on Taobao, known as the first sister of e-commerce.
Mengjie shares started to rise and stop continuously from May 12. The original stock price of Mengjie shares, which had been fluctuating around 4 yuan, rose to over 10 yuan just ten trading days later, and the stock price doubled. During the period, there were seven trading days of continuous rise and stop, and the total market value increased by more than 4 billion yuan.
About the live broadcast, Li Jing, general manager of Mengjie, said that the company actually started to do it from last year, because there are many changes in the new retail business. Last years outlet should be a small community. From the end of last year to now, it is live broadcast. So from last year, the boss (Jiang tianwu, chairman of the board) said that all new things must be learned.
Jiang tianwu, chairman of Mengjie Co., Ltd., told the economic observer, Weiya gave us four live broadcasts. The fans attracted by the four broadcasts are 99.5% new customers. The new fans are the most valuable to us. So far, their returns are 40%, which is quite attractive. And then give us the praise, in the e-commerce we have been high, the best. Its very difficult to sign strategic cooperation with such a top-level online celebrity as Weiya. In general, people dont sign with you. There are various considerations for not signing with you. Our cooperation is not exclusive. There are many factors in signing strategic cooperation with Weiya, not only a problem of carrying goods, but also the experience of Weiyas own struggle. We can learn a lot from it. The selection is very strict, which is exactly what we want. In the past, when we used to do home textile, we basically did what we sold. Now the competition is more fierce. We work with Weiya team, and we really learn a lot from the selection. Its a great help to our online e-commerce and offline sales. Their selections are obtained from customers and their fans. Her methodology is what we need to learn. Jiang tianwu detailed the reasons for the cooperation between Mengjie and Weiya.
She is a top-level online celebrity, which should be reasonable. She didnt come out by accident. We think she must have her logic. She represents her fans to be our product experience officer to make our product experience. This list is worth it. So we spent more than one million yuan to occupy this hole (live broadcast terminology), not to rush to sales, but via gave us 20 There are many pits. We still need to take a lot of goods in one year. Jiang said.
Profitability and underweight
In the first quarter of 2020, the financial data of Mengjie fell seriously, with the operating revenue of 360 million yuan, a year-on-year decrease of 34.63%; the net profit of 30.57 million yuan, a year-on-year decrease of 46.63%.
Li Jing said that the first quarters performance was mainly affected by the epidemic. When department stores and stores opened, they didnt open. Basically, no one went shopping.
However, according to the 2019 annual report, Mengjies operating revenue in that year was 2.6 billion yuan, but its net profit was only over 85 million yuan, which was significantly lower than that of the industry.
Li Jing explained that this has a lot to do with Mengjies market layout. The companys investment in the first and second tier market is the largest, that is to say, the brand construction and direct stores invested in the first and second tier cities all cost a lot.
In the first and second tier markets, the share of a single city is 74.1%, but in the third and fourth tier markets, the share is only 1.67%. Before, we used to be a brand, hold high and fight high, and stand at the commanding height of a market, all in the first-line and second-line market layout, which is relatively cost-effective. In the second half of last year, we started to build thousands of stores in thousands of cities and sink channels. The situation will be better now. Jiang tianwu replied.
Li Jing said that in addition, the company has high quality requirements and high cost, such as Mengjie babys baby products, all of which are made of class a materials. Class a material refers to infant fabric, which can be used close to the body, but many other childrens products manufacturers will not use class a fabric, but will use class B or even class C. There is also the size of the quilt cover. We have launched a standard size of Mengjie - 2.48M by 2.48M, large square, convenient to cover the quilt without looking at the horizontal and vertical, which is very popular with women. But it needs to be cut with 2.8 meters wide cloth, and the market size is basically 2.2 meters by 2.4 meters. It uses 2.35 meters wide cloth to cut, and the cloth we cut will be far more than the same industry. In this case alone, our cost will increase by 100 million. Li added.
Mengjies share price soared due to the signing of the contract with Weiya, and was inquired by Shenzhen stock exchange due to the reduction of shareholders in the soaring share price. The shareholders of the reduction are special. They are Wu Jing, the ex-wife of chairman Jiang tianwu, and Wu Jings concerted actors, who have reduced about 2 million shares in total.
When talking about this issue, Jiang tianwu replied that we have no ideological preparation, we have no reduction in our holdings, and we have a clear conscience.
At the strategic conference of Mengjie in 2020, Jiang tianwu said that the company will upgrade from home textile to high-quality home life service in all aspects, and continue to build a one kilometer home consumption service ecosystem around four dimensions of upgrading goods, channels, services and new retail mode, so as to become a new leading brand of home life retail.