Executive resignations, key technical personnel leaving, declining revenue… Since the beginning of this year, various controversies surrounding Bloomage Biotech have never ceased.
Recently, Bloomage Biotech has once again become embroiled in public “disputes.” Cheng Fei, the former head of QuadHA, publicly released videos through platforms such as Xiaohongshu (Little Red Book) and Douyin (TikTok), stating that they would sue Bloomage Biotech on grounds of “infringement of reputation rights” and demanded a public apology from Bloomage Biotech.
What is the story behind this?
Cheng Fei Files Lawsuit Against Bloomage Biotech
On June 16th, Cheng Fei, also known as Zhifanfan, released a video on social media platforms such as Xiaohongshu (Little Red Book) and Douyin (TikTok), where they recounted various incidents after leaving Bloomage Biotech. They accompanied the video with the caption “The biggest skincare industry scandal of 2024, I will clarify everything at once.” Cheng Fei claimed to have experienced workplace bullying and announced their intention to formally sue Bloomage Biotech, demanding a public apology, clarification of the facts, and restoration of their personal reputation.
So, what exactly is going on?
To understand the dispute between Cheng Fei and Bloomage Biotech, we need to go back to the “termination controversy” in March of this year.
On March 8th, Cheng Fei posted a video on their personal Douyin account, looking back on their work experience at QuadHA. The accompanying caption read, “Time passes like words, gathering and parting have their own timing, time doesn’t rush, and everyone has their own destination.” This marked the first public confirmation of their departure from QuadHA. Cheng Fei did not provide an explanation for the resignation and stated, “Our founders were collectively terminated, and the handover hasn’t happened yet.”
As a key figure during QuadHA’s growth phase, Cheng Fei’s personal brand was deeply intertwined with the development of the QuadHA brand. Their personal livestreams achieved impressive results, such as exceeding a billion yuan in annual GMV, generating tens of millions of yuan in daily sales, and garnering over a million exposures. Therefore, when news of Cheng Fei’s departure broke, discussions about the future development of the QuadHA brand became heated. Up to this day, Bloomage Biotech has not made any public response to this incident.
It is worth noting that despite the official announcement of Cheng Fei’s resignation, the disputes between Cheng Fei, Bloomage Biotech, and the QuadHA brand did not come to an end.
In the latest video release, Cheng Fei mentioned, “On May 16th this year, the official customer service account of QuadHA spread rumors in the distributor group, claiming that after the agents paid for the goods, they did not receive any shipments because the money was with me. They also said that the rewards were not given to the agents because the third-party company had a relationship with me, and I asked them to cancel it.”
Cheng Fei stated that due to this message being disseminated by the official QuadHA customer service account, they received numerous abusive messages through private messages on their personal social media accounts and related platforms. In response, Cheng Fei posted a response and refutation in their circle of friends (a social media feature), stating that they would use legal means to protect their reputation.
“On the second day after I posted in my circle of friends, QuadHA’s official customer service account issued a notice and distributed all the goods and sales rewards to all the agents,” Cheng Fei stated in the video. “Similar coincidences have happened countless times during my more than six years at Huaxi (Biotech).”
Regarding their public statement, Cheng Fei commented in the Douyin account’s comment section that the purpose of releasing the video was because they had already filed a lawsuit but had received no response. It’s worth mentioning that no relevant court hearing information has been found through public channels for CHAILEEDO, the brand associated with Cheng Fei.
In regards to this incident, CHAILEEDO attempted to contact the parties involved. As of the time of writing, CHAILEEDO has not received a response from Bloomage Biotech regarding this matter, and the message sent to Cheng Fei’s Douyin account has been marked as read but not replied to.
Personnel Turmoil Continues, Bloomage Biotech Under Pressure
The attention surrounding the dispute between Cheng Fei and Bloomage Biotech stems from the deep connection between Cheng Fei’s personal IP and the QuadHA brand.
In 2018, during the brand’s initial establishment, Cheng Fei was actively involved in the brand building of QuadHA. Through their personal IP as the brand’s spokesperson, they successfully established a strong connection between the brand and its fans. Public information shows that Cheng Fei’s livestreams became an important sales channel for QuadHA in 2021. Under Cheng Fei’s leadership, QuadHA broke the billion-yuan threshold in 2022 and became the second billion-dollar brand under Bloomage Biotech.
However, compared to other independent beauty brands, QuadHA is not solely driven by its spokesperson. Its growth is heavily reliant on the research and marketing support provided by Bloomage Biotech, which serves as an important endorsement of QuadHA’s research capabilities and technological content.
Nevertheless, it is undeniable that Cheng Fei had already built a strong connection with the brand’s fans during their involvement in the brand building of QuadHA. Even now, in the comments section of their videos, many fans express sentiments like “I started using QuadHA because of Cheng Fei” or “I won’t use QuadHA anymore,” highlighting the depth of the connection between Cheng Fei and the QuadHA brand. As of the time of writing, Cheng Fei’s Douyin account still has 222,000 followers and 3.43 million likes.
As a result, after Cheng Fei’s departure, there have been speculations online regarding the high-level turmoil at Bloomage Biotech. Furthermore, Bloomage Biotech has indeed experienced numerous personnel changes this year, aside from the “Cheng Fei’s departure,” there have been two officially announced executive changes.
Firstly, in February of this year, Bloomage Biotech announced the deliberation and approval of the “Proposal to Adjust the Appointment of Chief Financial Officer,” appointing Wang Hui as the new CFO, while Luan Yizheng continued to serve as the Deputy General Manager of the company, responsible for investment management.
Secondly, in April, Bloomage Biotech released an announcement titled “Announcement on the Resignation of Core Technical Personnel,” stating that core technical personnel Ma Shouwei had “resigned from the company due to personal reasons.”
It is worth mentioning that Ma Shouwei joined Bloomage Biotech in 2021 as the Director of Functional Skincare Product Development at the Shanghai R&D Center, primarily responsible for basic formula technology and the development of functional product formulas. Prior to joining Bloomage Biotech, Ma Shouwei had worked at Unilever (China) Research Center and L’Oréal (China) Research and Innovation Center.
In the 2022 annual report, Bloomage Biotech mentioned that Ma Shouwei had participated in the application of dozens of research and development patents, with five patents granted and one example of a phenomenally developed product. However, based on Bloomage Biotech’s announcements, they do not believe that Ma Shouwei’s departure will have any impact on their research and development system.
In the announcement of Ma Shouwei’s resignation, Bloomage Biotech emphasized that during his tenure, Ma Shouwei had participated in the application of several invention patents as a non-sole inventor, and the company owned all the rights to these patents. Additionally, Bloomage Biotech has established a systematic and complete research and development organization, which can function in an orderly and efficient manner to support the development of existing business.
Therefore, Bloomage Biotech stated that Ma Shouwei’s departure would not affect the integrity of their patent rights nor have a significant adverse impact on their technological advantages, core competitiveness, business development, or product innovation.
First Quarter Revenue Growth Rebounds, Can Bloomage Biotech Return to Glory?
In addition to personnel changes, discussions about Bloomage Biotech in the industry also stem from its less-than-ideal performance in 2023. Particularly, the functional skincare product segment has even started to drag down Bloomage Biotech’s revenue growth.
According to the company’s financial report, Bloomage Biotech achieved a total revenue of 6.076 billion yuan in 2023, a year-on-year decline of 4.45%. The net profit attributable to shareholders of the listed company was 593 million yuan, a year-on-year decline of 38.97%. It is worth noting that this is the first time Bloomage Biotech has experienced a decline in performance since 2019.
Not only did the overall performance of the company decline, but the performance of the functional skincare product segment, which accounts for a significant portion of Bloomage Biotech’s total revenue, also showed weak performance. From 2019 to 2021, the functional skincare product segment under Bloomage Biotech had been rapidly growing at a rate of over 110% per year. However, starting from 2022, the overall performance growth of this segment directly declined to 38.8%. In 2023, the segment’s performance began to show negative growth, with a year-on-year decline of 18.45%. Its share of total revenue also dropped from 72.45% in 2022 to 61.84%.
Looking at the QuadHA brand, its annual revenue in 2021 still maintained high growth of 150.19%, but the growth rate started to slow down in 2022, dropping to 39.73%. In the first half of 2023, QuadHA’s revenue declined by 10.10% compared to the previous year. In comparison, Ren Baiyan declined by 2.04%, Mibelle declined by 16.81%, and BM Jihuo declined by 29.62%.
So how has the QuadHA brand performed in the market this year? According to CHAILEEDO intelligence data, from January to May this year, QuadHA’s online channel (Taobao, JD.com, Douyin, Kuaishou) GMV declined by 9.08% year-on-year. Among them, Taobao platform GMV increased by 16%, while Douyin platform declined by 40.8%.
However, Bloomage Biotech stated in its financial report that it is currently undergoing phased adjustments to its major brands, with a focus on optimizing category systems centered around flagship products and deepening brand value. They aim to improve the coordinated management of multiple brand resources, enhance resource utilization efficiency, and empower differentiated operations and orderly growth for major brands.
According to the latest financial report for the first quarter of this year, Bloomage Biotech’s revenue has successfully rebounded. The total revenue for the first quarter of 2024 was 1.361 billion yuan, a year-on-year increase of 4.24%. The net profit attributable to shareholders of the listed company was 243 million yuan, a year-on-year increase of 21.39%.
However, they did not disclose the revenue of the functional skincare product segment. In the performance briefing of the first quarter, Bloomage Biotech stated that they will continue to focus on marketing promotion across multiple platforms, strengthen brand exposure online and offline, optimize the refined operation capabilities of self-operated channels, and pay attention to consumer asset management and improving customer satisfaction.
In addition, Bloomage Biotech is also exploring other high-growth areas to compensate for the current performance decline. For example, they have actively entered the synthetic biology field and successfully developed recombinant collagen with proprietary intellectual property rights using synthetic biology technology. They have launched medical-grade raw material Bloomcolla™ COL3-MD recombinant Type III human collagen and cosmetic-grade raw material Bloomcolla™ Col III recombinant Type III collagen. In January 2024, they obtained a Class II medical device registration certificate and are expected to launch wound dressing products with collagen ingredients in the future. In terms of functional skincare products, Ren Baiyan also launched new products containing ingredients such as hyaluronic acid and recombinant Type III collagen.
Furthermore, Bloomage Biotech stated that botulinum toxin and regenerative materials are also areas they are exploring. For example, in 2023, they officially unveiled the Hainan Provincial Key Laboratory for Regenerative Medicine Technology and Materials Transformation, which focuses on three research directions: “fundamental research and application transformation of biomedical new materials, design and development of regenerative medicine stem cell culture media, and innovative application research of stem cell derivatives.” However, since terminating its cooperation with South Korean botulinum toxin company Medytox in September of last year, Bloomage Biotech has not publicly disclosed any information about expanding into the botulinum toxin market. Whether botulinum toxin can become the next growth point for Bloomage Biotechremains uncertain.
Overall, Bloomage Biotech experienced a decline in performance in 2023, with its functional skincare product segment showing weak growth. However, the company has implemented adjustments to its major brands and reported a rebound in revenue for the first quarter of 2024. They are focusing on optimizing their category systems and deepening brand value to improve performance.
Bloomage Biotech is also exploring other areas such as synthetic biology, recombinant collagen, botulinum toxin, and regenerative materials to compensate for the decline in their skincare segment. They have successfully developed recombinant collagen and obtained medical device registration certificates for wound dressing products. The company is actively researching regenerative medicine and materials transformation, indicating a potential focus on innovative applications in these areas.
Regarding botulinum toxin, Bloomage Biotech terminated its cooperation with Medytox in 2023 and has not disclosed any further information about expanding into this market. The potential for botulinum toxin to become a growth point for Bloomage Biotech remains uncertain.
It is important to note that the information provided is based on the available data up until September 2021, and the current status of Bloomage Biotech may have evolved since then. For the most accurate and up-to-date information, it is recommended to refer to the company’s official announcements and financial reports.
