Shanghai Jahwa United Co., Ltd (Shanghai Jahwa), a Chinese cosmetics enterprise, released its annual report for 2023, becoming the first listed company in the Chinese cosmetics industry to do so.
In 2023, Shanghai Jahwa’s revenue was 6.598 billion yuan, down 7.16% year-on-year. The net profit attributable to shareholders of the listed company was 500 million yuan, up 5.93% year-on-year. This marks the second consecutive year of revenue decline for this long-standing Chinese daily chemical company, and also the first time its revenue has fallen below 7 billion yuan in the past six years.
In terms of its core business, skincare revenue for Shanghai Jahwa in 2023 amounted to 1.994 billion yuan, a slight increase of 0.98% year-on-year, accounting for 30.28% of the total revenue. Personal care and home cleaning revenue reached 2.514 billion yuan, down 4.88% year-on-year, representing 38.58% of the total revenue. Revenue from the mother and baby category stood at 1.856 billion yuan, down 13.35% year-on-year, constituting 28.17% of the total revenue.
In terms of distribution channels, in 2023, Shanghai Jahwa’s online channel revenue reached 2.81 billion yuan, accounting for 42.66% of the total revenue, while offline channel revenue amounted to 3.777 billion yuan, representing 57.37% of the total revenue. Among these, offline supermarkets remained the largest channel, with revenue of 2.381 billion yuan, constituting 36.14% of the total revenue.
Shanghai Jahwa stated that in 2023, its overseas market was negatively impacted by declining birth rates, inflation, and regional conflicts, leading to a roughly 12.9% year-on-year decrease in overseas business income, resulting in negative revenue growth for the company. Additionally, the overall recovery of the domestic consumption market fell short of expectations, with traditional offline supermarkets facing challenges from online channels, community group buying, and changing consumer habits, leading to the closure of some large chain supermarkets and hypermarkets. Online channel performance varied, with traditional e-commerce platforms facing downward pressure, while interest-based e-commerce platforms led by platforms such as Douyin experienced growth.
Shanghai Jahwa stated that to further adapt to changes in the market environment, the company has implemented organizational structure adjustments by establishing business units, including the Beauty Skincare and Mother-Baby Business Unit, Personal Care and Home Care Business Unit, and Overseas Business Unit. These units are categorized by product type to facilitate brand and sales synergy, both online and offline. The central departments have strengthened their ability to share resources across product categories, while the backend departments have enhanced professional management capabilities, aiming to accelerate decision-making and market responsiveness.
Furthermore, Shanghai Jahwa has outlined a strategic focus on categories with high-profit margins, high growth rates, and strong brand premiums in the coming years. This indicates a gradual shift towards increasing the proportion of beauty and skincare businesses while enhancing the profitability of personal care businesses through differentiation. This strategy involves proactively phasing out categories with low-profit margins, low profitability, and low brand premiums. Shanghai Jahwa stated that this adjustment began gradually in 2023 and may bring revenue pressures in the short term.
