On November 28, 2023, Bosideng publicly shared its half-year financial report for the fiscal year 2024/25, highlighting impressive growth in both revenue and net profits. Particularly notable is the increase of over 20% in profits attributable to equity shareholders, setting a new historical record for the company.Furthermore, Bosideng pointed out that the textile and garment industry in China is witnessing new developmental opportunities as the effects of various policies become increasingly evident and market demand begins to loosen. The company is fine-tuning its strategy by keeping a close eye on the pulse of the times, maintaining a focus on its core business, prioritizing brand leadership, enhancing innovation efforts, and practicing a strong corporate culture to achieve sustainable and high-quality growth in performance.According to Guolian Securities, Bosideng’s unwavering commitment to focusing on its core business aims to tap into the potential demand for down products, aspiring to elevate its brand strength to become the top brand in down jackets. The down jacket category inherently features high functionality and an elevated customer experience, which helps drive penetration rates and growth among leading brands over more extended consumption cycles.Bosideng's mid-term revenue and net profit hitting historical highs is directly linked to its strategic decision to concentrate on its main business. In 2018, the company undertook a strategic shift, narrowing its focus and directing its efforts towards the down apparel segment. The results of this shift have been evident, with consistent performance growth over recent years.Recent research from CICC indicates that in solidifying its position in the core down jacket business, Bosideng is creating innovative product categories focused on "fashion functional tech apparel" while simultaneously enhancing the operating efficiency of its stores, thereby improving its operational capabilities.As highlighted in the financial report, for the first half of the 2024/25 fiscal year, Bosideng's brand revenue saw a year-on-year increase of 19.4%, reaching approximately RMB 5.28 billion. Additionally, the revenue from its Snow Flying brand surged 47.1% year-on-year to around RMB 390 million, with an improvement in gross profit margin by 6 percentage points.The Snow Flying brand capitalizes on the high cost-performance ratio within the down jacket market, focusing on three critical strategies: innovation in product variety value extension, breakthroughs in strategic all-channel models, and a reshaping of brand user perceptions, leading to significant performance growth.According to Huayuan Securities, the market size of China's down apparel has rapidly expanded to RMB 196 billion by 2023. This growth is further fueled by a shift in consumer behavior from conventional brand-focused purchases driven primarily by price, to a preference for individuality, creativity, and emotional expression. As brands explore consumer demands and offer diverse and innovative products, they drive the future development of the industry. It is anticipated that the market will continue to expand rapidly, with a compound annual growth rate of approximately 11% by 2028.In spite of the challenges posed by geopolitical risks and export pressures, Bosideng's private label manufacturing management business has demonstrated resilience, achieving a year-on-year revenue increase of 13.4% to roughly RMB 2.32 billion during the first half of the fiscal year 2024/25. This division continues to hone its competitive edge by focusing on core customers, developing its OEM (Original Equipment Manufacturer) and ODM (Original Design Manufacturer) capabilities, and enhancing its quick response capabilities while expanding overseas production capacity.Bosideng has consistently prioritized brand building, reinforcing its position as a "global leader in down apparel." During the financial reporting period, Bosideng implemented strategies centered around brand leadership, impactful branding campaigns, and synergistic sales initiatives that maximized brand perception and sales performance, deepening consumer recognition and appreciation for its brand.The reporting period also saw Bosideng receiving numerous accolades that underscore its leading brand strength and market competitiveness. Notably, it has been recognized in Brand Finance's "2024 Global 50 Most Valuable Apparel Brands" list, ranking 46th, and has made the "2024 Asia Brand 500" list by the World Brand Lab at 268th place. Additionally, it secured the 8th place in the "2024 World's Textile and Apparel Brand Strength Ratings," becoming the highest-ranking Chinese brand on that list.Bosideng has also made waves with its “Diverse Variations” cloud show that stunned audiences atop Shanghai's skyline. Through innovations in product categories and expanding incremental business, the company is injecting momentum into growth even in off-peak seasons. The first half of the fiscal year 2024/25 saw Bosideng focusing on the development of functional outerwear like sun protection clothing and single-shell jackets. Collaborative initiatives such as a limited-time pop-up shop with "Harper's Bazaar," a sun protection fashion show during the Beijing Film Festival, and partnerships with the Strawberry Music Festival, culminating in the spectacular cloud show at Shanghai Tower, have helped elevate consumer interest in these functional outerwear offerings.In its innovation endeavors, Bosideng is adeptly linking with consumers, swiftly tapping into their preferences. For instance, the introduction of the "Diverse Variations" three-in-one jacket series has successfully penetrated the outdoor and warmth markets, winning over consumer mindshare. This particular product has also been awarded the Red Dot Design Award, demonstrating its design excellence.At a time when technology is advancing rapidly, Bosideng is making strides in digital transformation. In sectors like smart manufacturing and smart logistics, the company has documented significant achievements, establishing a clear focus on user-oriented retail and product technologies for its digital transition. Concurrently, it is exploring a hybrid model that integrates online and offline developments, pushing for high-quality growth across its marketing channels.During the reporting period, Bosideng expanded its Top Store system, tailoring strategies unique to each outlet while collaborating deeply with key Top Store managers to pioneer and replicate successful operational models.Building a robust Top Store system is also crucial in enhancing the operational capabilities of individual stores. Additionally, Bosideng focuses on strategic incremental markets, optimizing its layered operational structure to meet varying customer needs effectively. The company has successfully improved its single-store management capabilities and operational efficiency, with more than 30% comparable growth across its full-channel operations.Bosideng heavily emphasizes self-operated construction and content upgrades, evident through initiatives such as the collaboration with Douyin for trendy promotions of lightweight down jackets. During the Double Eleven shopping festival, Bosideng's apparel, women's clothing, and men's clothing stores ranked second, first, and second respectively in sales, showcasing its market position. In the first half of the fiscal 2024/25, online sales of Bosideng brand down jackets grew by 24.1% year-on-year.Incorporating ESG理念 throughout its management practices, on July 16, 2024, S&P Global released the “Sustainability Yearbook (China Edition) 2024,” recognizing Bosideng for its outstanding ESG performance amid assessments of 1,735 companies across 60 sectors. It marks the company’s inaugural inclusion in the Sustainability Yearbook, positioning it as one of two brands chosen from the Chinese apparel industry, and underlining its leadership within the textile industry.During the reporting period, Bosideng rolled out its "1+3+X" ESG strategic framework, which articulates its vision to be "consumer-oriented and lead sustainable fashion." The organization has committed to achieving net-zero emissions across its operations by 2038 and has established interim goals to ensure progress toward this vision.In terms of carbon path planning, Bosideng is proactively undertaking carbon emission assessments across its entire value chain, including the group itself, suppliers, distributors, transportation, and product sales. The company has completed an independent carbon audit and, based on these refined carbon data systems, an actionable carbon pathway plan has been formulated to align with midsize strategic targets.During the first half of the fiscal year 2024/25, Bosideng’s supply chain has consistently focused on flexibility, quality excellence, research and development, resource integration, and cost leadership through systematic planning and enhancements.On the digital operations front, Bosideng has worked to streamline its existing systems, adhering to principles of a single entry point, a unified platform, and a consolidated data warehouse. This effort has led to the preliminary design, development, and testing of a core business operational platform, setting the stage for the realization of mobile offices, online operations, digital management, and intelligent decision-making.Notably, Bosideng's smart operations case has been selected for the Ministry of Industry and Information Technology's "2024 Digital Transformation of Manufacturing Industry Typical Case Collection," making it the only textile and apparel industry case included, providing valuable insights and leading examples for digital transformation within the sector.
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