Household Cleaning Brand Bluemoon to Go Public
With necessities such as laundry detergent as its core products, Bluemoon still has growth potential in the context of consumption upgrading.
► Bluemoon’s market share ranked first in 2019 in the laundry detergent, concentrated laundry detergent and hand sanitizer field.
► The company enjoyed improved profitability, and online sales were climbing with 47% of total revenue in 2019.
► Around 70% of offline channels relied on low-tier cities.
► Frost & Sullivan forecasts that China’s household cleaning and care industry will experience a higher compound annual growth rate in 2024.
Bluemoon, a household cleaning brand, submitted its prospectus to the Hong Kong Stock Exchange on June 29. Hillhouse Capital, which invested in the company ten years ago, is the largest institutional shareholder, holding 10% of shares.
Founded in 1992, Bluemoon produced core products including laundry detergent, hand sanitizer, clothing cleaning and care products, kitchen cleaning products and bathroom cleaners. Among them, the laundry detergent and hand sanitizer market share have ranked first for 11 consecutive years (2009 to 2019) and eight straight years (2012 to 2019), respectively.
In terms of market share based on sales volume, the company topped in the laundry detergent, concentrated laundry detergent and hand sanitizer fields in 2019, with market shares of 24.4%, 27.9%, and 17.4%, respectively.
The clothing cleaning and care products segment has generated around 88% as of total revenue for three consecutive years. Increasing gross margins for this part drove overall gross margin up from 53.2% to 64.2% over the past three years.
Regarding revenue, Bluemoon recorded HKD5.63 billion, HKD 6.77 billion, and HKD 7.50 billion from 2017 to 2019, with a compound annual growth rate of 11.9%. This number is over twice the industry’s average of 4.9%.
Bluemoon embraced the new retail trend as well, lifting online sales to 47% in 2019. What stands out was its revenue's compounded annual rate of 33.5% from online channels, four times the industry’s average of 8.5%.
Supermarkets and distributors constitute offline channels, accounting for 14.1% and 38.7% of total revenues, respectively. Among 1268 offline distributors, 70% are concentrated in low-tier cities.
According to Frost & Sullivan’s report, the total sales of China’s household cleaning and care industry enjoyed a compound annual growth rate of 5.3% from 2015 to 2019, twice the global scale of 2.5%. This number is expected to be 8.7% in 2014, accounting for more than one third of the worldwide increase.
“In the very beginning, among the traditional multinational companies with great influence in the world, Procter & Gamble was the champion in each country. So far, Bluemoon has undergone a larger market share in China’s laundry detergent than the sum of P&G and Unilever,” said Zhanglei, the founder of Hillhouse Capital.