Wen/Han Lu
Founded in 2007, Baozun E-commerce is often perceived by many as a home appliance trading and operation company.
This multi billion dollar e-commerce player is accelerating its transformation, becoming the "operator" behind multiple international brands through exclusive agency distribution or acquisition operations.
At present, in addition to acquiring GAP's China business, Baozun also represents or owns international brands such as French beauty brand NUXE, Canadian fashion brand ALDO, British kitchenware brand Joseph Joseph, American floor scrubber brand BISSELL Pizza Hut, and British century old fashion brand HUNTER.
From pure electric commercial agency operation to brand wide distribution and operation, Baozun's capability boundary is expanding from online to offline.
In June, Baozun opened ALDO's first offline flagship store in China in Shanghai Globeport, and at the end of September, it opened HUNTER's first offline limited time store in Chinese Mainland in Shanghai Zhangyuan.
Baozun is taking a different operational path, and our positioning is to become a digital business partner of global brands, using technology and data to help brands seize opportunities for growth in China, "said Yu Junrui, an e-commerce specialist at Baozun, in an interview with 21CRBR.
Last year, Baoshan's revenue was 8.8 billion yuan. From July to September this year, the company's net revenue was 2.1 billion yuan, a year-on-year increase of 13%, of which e-commerce business revenue was 1.8 billion yuan.
The following is a self statement by Yu Junrui, edited and organized:
Filter brands
Starting from Philips, Baoshan has been engaged in distribution business in China for more than ten years.
We choose a brand considering three factors:
Firstly, brands should have sustainable investment in research and innovation to ensure continuous product updates and meet the needs of Chinese consumers. Secondly, brands are willing to explore the market in a Chinese way, as China's online and offline models are different from those abroad. Thirdly, the brand conforms to current consumer trends and can achieve excellence in a certain niche track.
Several brands acquired and represented by Baozun are unique in their respective fields, such as BISSELL's floor scrubber, which we believe is suitable for pet households.
For example, ALDO is a Canadian national level shoe and bag brand. The brand once entered the Chinese market, but was not very successful, and later withdrew.
In 2022, ALDO is considering entering China again. Originally, they wanted to cooperate with trading companies in Hong Kong, but later found that the e-commerce penetration rate in the Chinese market is very high, and simple traders may not be able to cover online and offline business. Baozun once operated ALDO's online mall on behalf of others, so the two sides continued their relationship.
We have been communicating with ALDO headquarters for over a year, clarifying the conditions for the brand to operate in the Chinese market.
For example, what is the demographic profile, what brands should competitors benchmark against, and how should product strategies be formulated? What rights does Baozun have regarding goods, and how does ALDO empower Baozun's supply chain in China? In addition, how to open offline stores, where to open them, different stores have different models, how to operate them well?
The traditional dealer model is to test the waters before purchasing a batch of goods, and only act as an agent when they sell well. And Baozun has signed a 20-year contract with ALDO, hoping to establish a firm foothold for the brand in China.
After the two parties decided to cooperate in April this year, Baozun repositioned its brand.
Compared to the North American market, which focuses on young white-collar consumers, ALDO has a more mature age group among domestic consumers due to its popularity and price range, with users around 35 years old, who have overseas experience or are foreigners and have a first impression of ALDO.
Within three months, Baozun opened a flagship store for ALDO on multiple e-commerce platforms and channels such as Tmall, Tiktok, Xiaohongshu, Vipshop and WeChat applet. In June, it launched ALDO's first offline brand flagship store in China in Shanghai Global Harbor, and opened its second offline retail store in Shenzhen at the end of September.
ALDO mainly operates on a self operated model in North America, and in the Chinese market, we plan to take a two-step approach.
In core cities, entering through a direct operated store model, there are requirements for decoration, design, and display to showcase the latest product lines. For other cities, they will explore together through a joint venture model with local partners.
We plan to open approximately 75 stores in China within ten years, with ALDO's sales in China accounting for 10% of its global market.
From the current performance, after four months of official operation, ALDO Tmall flagship store is close to the highest level store in the entire clothing, shoe and bag industry, with some SKUs ranking in the top 10 of the industry.
Adapt to local conditions
We have different strategies for operating different brands. ALDO's online and offline stores opened almost simultaneously, while our own brand HUNTER started online first.
In 2019, Baozun began collaborating with HUNTER and established a Tmall flagship store from scratch, officially launching its online business. We also operate Xiaohongshu, plant grass and build momentum, and consider opening offline stores after reaching a certain scale.
Last year, Baozun completed the acquisition of intellectual property related to HUNTER in Greater China and Southeast Asia, making HUNTER's business in Greater China an important component of Baozun Group's brand management business.
This year, we opened our first offline store in Shanghai, located in Zhangyuan, a popular online shopping district where young people love to check in. Our customer base is relatively young, which perfectly matches the image of HUNTER. After having a certain operational foundation online, we can capture customer profiles through data analysis, and then attract potential customers offline to consolidate our brand. This is a case of combining online and offline.
On November 21st, HUTNER's offline retail store opened at Raffles City Shanghai. We are considering opening HUNTER's third and fourth stores. In addition to Tmall, we will also increase investment in Xiaohongshu online, and all actions will be mutually supportive.
Having been operating the brand for many years, Baozun has developed a methodology for omnichannel growth of the i-MORE brand.
M represents Dynamic Merchandise, where we use big data to analyze what consumers want and what brands sell, and provide feedback to design and procurement.
For example, HUNTER's positioning in the UK is rain boots. When it first entered China, the market lacked recognition of the brand, so we defined it as a fashion brand that is a part of matching and can be worn by consumers to participate in fashion events.
This year, HUNTER has launched a new bag. By analyzing the consumer group of HUNTER shoes, we can deduce the bag styles they will like and then find upstream factories to produce them.
O is Omni channel, full domain linkage. There are numerous channels in the Chinese market, and Baozun aims to expand its products to all channels, allowing more people to see them. There is interaction between different channels, and different products are provided through different channels.
R is Reliable Supply Chain intelligent chain management. Nowadays, business emphasizes speed, and warehousing and logistics are crucial. Baozun has its own logistics system.
E stands for Unified Experience, which we refer to as empathy and empowerment. Consumers entering a physical brand store and entering the brand's Tmall flagship store experience the same services and prices. For example, for the ALDO brand, as we are responsible for both online and offline operations, we basically ensure that the new listings, prices, and discounts for offline stores and online flagship stores are consistent.
These four parts all rely on i-intelligence, which is digital technology, and we use this approach to serve our customers.
Breakthrough upwards
The cooperation model between Baozun and the brand is very diverse. When a brand enters China, Baozun provides online operations, marketing, and even builds logistics systems and offline stores for it. Baozun can also take over its distribution business, even brand monopoly or IP authorization.
Just like Joseph Joseph, who has always been a small and beautiful presence, considering withdrawing from the Chinese market due to difficulties in scaling up and high operating costs.
We contacted its UK headquarters and communicated our ideas with the CEO. Baozun was appointed as the brand agent, fully responsible for its operations in the Chinese market. Since then, Joseph's sales and profitability have improved.
In fact, different brands have varying demands. For example, beverage brands require instant retail channels, sports and outdoor brands focus on the operation and maintenance of Tmall channels, and some luxury brands only operate in their private domain, even requiring 1v1 customers and guides.
The emphasis of each channel is also different. In the past two years, Baozun has actively laid out emerging channels and achieved high growth in WeChat mini programs and Xiaohongshu. Baozun regards Xiaohongshu as one of the important channels and has formed a Xiaohongshu team internally to study the marketing strategies of different brands on the platform.
We need to look further ahead than the brand, identify the next development trend, plan ahead, and help the brand achieve incremental growth.
We are not only focusing on front-end sales, but also on the supply chain. We have market data and brand data that can clearly indicate when and what products are needed, and then utilize the domestic supply chain to produce high-quality products.
For the ALDO brand, we have recently made a new attempt by designing two genuine leather bags specifically for the Chinese market, as we have found that Chinese consumers prefer genuine leather materials. In other markets, ALDO's positioning may be slightly lower, but in China it may need to move up.
Our cooperation with ALDO is not only for the general agency business in the Chinese market, but also for the brand to authorize Baozun to design and produce proprietary products in China according to market and user needs.
If sales are outstanding, there is also an opportunity to export China's product line to other markets, which is the more ideal "China for China, for the World" model.
To truly understand a brand, one must know what goods it needs. Each category and brand has unique characteristics and requires the accumulation and accumulation of professional knowledge. Baozun started as an e-commerce company and is also the most knowledgeable e-commerce person.