Chinese Herbal Shampoo Brand Bawang Gained Sales of $40.990 Million

On March 29, Bawang International (Group) Holdings Limited released its 2021 results announcement. The Group’s total revenue was approximately $43.2 million, down 0.9% year-on-year from 2020. Loss for the year attributable to the Group’s shareholders amounted to $1.43 million, expanding 124.96% year-on-year. The Group’s operating loss was approximately $1.18 million, mainly due to the increase in the cost of sales and administrative expenses.

During the reporting period, the Group’s core brand, Bawang, generated revenue of $40.99 million, accounting for 95.2% of the Group’s total revenue, relatively unchanged from FY2020.

Bawang is the core brand of Bawang International (Group) Holdings Limited, which is mainly engaged in the shampoo business based on the concept of Chinese herbal hair care, and the anti-loss shampoo is the representative product of the brand.

Needless to say, the consecutive years of performance losses have shown that Bawang, which is endorsed by international superstar Jackie Chan gains much reputation, and has fallen from the altar.

The glory days of Bawang can be traced back from 2006 to 2009. At that time, Bawang ranked the top of the domestic herbal shampoo market for four consecutive years, with a rapid increase in market share of 3.5%, 5.7%, 7.8%, and 8% respectively. What’s more, at that time, Bawang had a market share of over 46% in the herbal shampoo and hair care market.

But the prosperity did not last long. On July 14, 2010, Hong Kong’s The First Weekly claimed that Bawang’s shampoo contained carcinogenic dioxane. The incident then quickly spread and soon evolved into a storm of public opinion that swept the mainland market. Although the National Medical Products Administration announced the results of the sample tests and “corrected” the name of the Bawang Group, its brand image fell into disarray.

In 2017, the Bawang Group was embroiled in a “liquidation” scandal. Chen Qiyuan and his wife Wan Yuhua broke up their relationship, and Wan Yuhua asked the court to liquidate Fortune Station Limited, the holding company of Bawang International, to protect her rights. The divorce, which involved the shareholding and even the control of the Bawang Group, also had a certain impact on the group and its brand.

In addition, Bawang also suffered the “baldness of its founder”: consumers questioned the efficacy of Bawang’s representative product, anti-loss shampoo, after seeing the high hairline of Bawang Group founder Chen Qiyuan.

In addition to the above-mentioned series of scandalous crises, the development strategy of Bawang Group, the parent company of the Bawang, is also intriguing.

Since its listing in Hong Kong in 2009, in order to pursue maximum sales, Bawang Group has expanded greatly around the concept of the “Chinese herbal family” and launched the Chinese herbal anti-dandruff shampoo brand “Chasing Wind”, the Chinese herbal anti-dandruff shampoo brand “Ben Cao Tang”, and the Chinese herbal shampoo brand “Bawang”.

The Group has launched the Chinese herbal anti-dandruff shampoo brand Royalwind, the Chinese herbal anti-dandruff shampoo brand Ben Cao Tang, and Bawang toothpaste products, and restarted the old brand Li Tao. In addition, it also had the idea to enter the home cleaning, biogenetic, financial, and other fields.

This may reveal a signal: Bawang has lost its direction.

A small and medium-sized enterprise with a turnover of only a billion or so in its glory days, launching multiple brands and entering multiple categories at the same time, dispersing corporate resources and distracting management attention, also makes itself more competitors in the business battle.

From the 2021 financial report data, the revenue of Bawang reached more than 95% of the group’s total revenue, which is enough to show that the expansion of other brands of Bawang Group in recent years has created little revenue for it.

Some industry analysts say that Bawang is still in the view of consumers to prevent hair loss, and in the category of anti-hair loss products in the leading e-commerce channels. Because the Bawang Group has been playing the slogan of “the family of Chinese medicine”, all the brands under Bawang are invariably branded with the concept of Chinese herbal medicine, even the concept of anti-hair loss. This is one of the important reasons why the other brands of the Bawang Group have not played out their positioning.

But Bawang Group itself does not seem to see anything wrong with the expansion strategy. In its 2021 financial report, it said that in 2022 it would expand toothpaste and body wash products for its brand Bawang to increase sales revenue. It aims to stabilize the market share of the original anti-hair loss and hair care products, and plans to expand hair care oil products and develop a new ginger series.

Perhaps the reason for this decision is that some of its new products have also had a good performance. As of March 31, on China’s mainstream e-commerce platform Taobao, the official flagship store of Bawang reached more than 100,000 regular customers, and the top-selling product in the store is not the iconic product Bawang anti-loss shampoo, but the Bawang Camellia hair care oil launched in recent years with monthly sales of 30,000 + units.

And after a big expansion of the brand and category, its founder Chen Qiyuan also understands very well the importance of Bawang to the group. He once said in a media interview in 2018: “At this stage, we first need to achieve an improvement in performance. Keeping the brand Bawang, we will be able to survive.”



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