Last week marked a strategic shift for Jala Group as it unveiled its new identity: "Chando Group." The move aligns with its strategic and brand development goals, aiming to enhance consumer engagement.
This rebranding adds to the trend of local beauty giants adopting their flagship brands' names, joining the likes of Proya and Marubi.
Since 2020, China's beauty sector has witnessed a dramatic surge and intense competition, with Jala Group being a pivotal player. This rebranding reflects a significant change, worthy of attention and discussion.
In Chinese culture, "Jala" resonates with beauty and positivity. The group shared earlier, "Jala," derived from Sanskrit, means "water," symbolizing a place of life, beauty, and abundance.
Established in 2001, the group has mirrored its name's essence, creating an empire with 7 brands including Chando, over 40,000 retail outlets, and an annual turnover exceeding 5 billion yuan. This has cemented its status as a key player in China's local beauty industry.
Chando, with its diverse consumer base, is the group's most developed brand. It dominated the 2019 "Double 11" sales, becoming the top national brand in both offline stores and brand total sales, with online sales reaching 747 million yuan, a 41% increase from the previous year. In 2020, CBNData showed Chando as the leader in online skincare consumption in China. Chando has indeed been a trendsetter in the nascent wave of national beauty products.
Apart from Chando, the group has a well-defined brand portfolio. Botanical Wisdom caters to sensitive skin, while Maysu, launched alongside Chando in 2001, targets the luxury market. Though not as mass-market-oriented as Chando, Maysu has been consistent in its marketing efforts. Since 2017, the group has ventured into niche markets with brands like Spring Summer, Biorrier, COMO, Assassina, and Love as My Own, targeting diverse consumer segments.
While the group's brands have been successful, Chando remains the cornerstone, justifying the high-profile rebranding to garner more industry and consumer attention and fuel further growth.
The beauty giant is at a crossroads, needing to innovate and adapt.
The ascent of C-Beauty has reshaped the beauty landscape, bringing success but also intense competition. The once-dominant Jala Group, and its flagship Chando, have felt this shift.
In 2021, the Jala Group's financial performance shone brightly in the domestic beauty market, with a total revenue of approximately 5.69 billion yuan. This was a notable achievement, particularly when compared to other listed companies in the sector; only Shanghai Jahwa exceeded this with a revenue over 7 billion yuan, while others like S’Young, Bloomage Biotech, Proya Group, and Botanee’s ranged between 4 to 5 billion yuan.
However, a closer look at the Tmall “Double 11” sales data from 2020 onwards reveals a significant shift: Chando, once a top contender, has been absent from the top 10 for three years straight. In contrast, Proya, another brand named after its flagship product, has been rapidly ascending. In the 2023 Tmall "Double 11" sales, Proya clinched second place overall and first among domestic brands, while Chando slipped to the fifteenth spot. Despite maintaining its position as the top-selling national brand in traditional department store channels in 2023, Chando's traction on modern online platforms like Douyin, Kuaishou, and Xiaohongshu hasn't mirrored this success.
Contrasting with Chando's trajectory, Proya Group's strategic alignment with its core brand has propelled its growth. Its revenue for the first three quarters of 2023 was an impressive 5.249 billion yuan, marking a 32.47% increase from the previous year, and its net profit grew by 50.6% to 746 million yuan. This remarkable performance has put Proya on track to potentially overtake Shanghai Jahwa, a long-standing leader in the industry, setting the stage for Proya to possibly become the leading domestic beauty conglomerate. Forecasts suggest Proya might even surpass the 8 billion yuan revenue mark this year.
This competitive landscape highlights the fundamental business truth: stagnation means regression. The newly rebranded Chando Group now faces the critical challenge of reclaiming its dominance in the domestic market. While it's unclear if Proya Group's success in leveraging its core brand influenced this rebranding decision, it's evident that Chando is poised to receive enhanced resource allocation and heightened performance expectations.
The rebranding also marks a strategic alignment with the Group's ambitious international expansion plans, encapsulated in its Strategy 3.0. This vision envisages Chando Group not only as China's leading beauty enterprise but also as a frontrunner on the global stage, emphasizing a multifaceted approach that includes a singular focus, diversified brands, comprehensive business models, and internationalization. This strategy aims to cement Chinese beauty brands' sustainable growth in the global market.
The group's international market expansion strategy, which began in earnest in 2018 with Chando's venture alongside Tmall overseas, has borne fruit. Over five years, Chando has successfully penetrated markets in Canada, Malaysia, and Indonesia. In 2023, Chando emerged as the fastest-growing global beauty brand, with a 36% increase in brand value to 1.3 billion US dollars, according to the latest Cosmetics 50 list. Additionally, it holds the top spot among Chinese brands in Lazada's beauty and skincare category.
Chando's established international reputation offers the group a valuable foothold in global markets. The decision to rename the group after Chando strategically positions it to connect more efficiently with new markets and stakeholders, leveraging a brand already resonating globally.
However, this strategic move is not without its challenges. The close resemblance between Chando's English spelling and that of LVMH's Chandon sparkling wine could potentially lead to brand confusion among international consumers, posing a unique challenge in the group's global branding efforts.
The transformation of "Jala Group" to "Chando Group" is not just a change of name; it's a strategic pivot with far-reaching implications. This new identity could be part of a larger plan for capital market expansion.
Recently, the company, which was previously hesitant about going public, reportedly began exploring an IPO, potentially in Hong Kong by 2024, aiming to raise up to $500 million. This shift in strategy indicates a significant evolution for the group.
The rebranding to Chando, a name already well-established in the market, simplifies the group's identity, streamlining its market presence and potentially setting the stage for the anticipated IPO. However, it's crucial to note that the change to a "limited liability company" format may affect the group's ability to publicly issue stocks. This could be a strategic denial of IPO rumors or a hint towards a possible separate listing for the Chando brand itself.
For a billion-dollar enterprise, every move is significant, and a corporate rebranding is no small feat. From Jala Group to Chando Group, the unfolding story is rife with possibilities: Could Chando become an independent entity through a public listing? Will this enterprise emerge as a new global face of Chinese beauty? What changes will the other sister brands under the same roof undergo due to this strategic shift? The answers to these intriguing questions will emerge in Chando Group's subsequent actions. As industry observers and recorders, we at ConCall eagerly anticipate witnessing a successful story of transformation and renewal.