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As the industry leader, Supor strives to give consumers a sense of "freshness", but its profitability is still inferior to that of up-and-coming companies. When "new products are not new" and price wars emerge, Supor may also be anxious.

On July 25, Supor released its first-half performance forecast, with the company's operating income during the period being approximately 10.965 billion yuan, a year-on-year increase of 9.84%; net profit attributable to the parent company was approximately 941 million yuan, a year-on-year increase of 6.81%. From this point of view, the company's growth is relatively stable, and the company's profit growth rate in the three years from 2020 to 2023 is almost between 5.3% and 6.8%.

As for the reasons for the growth in the first half of the year, Supor stated that the overseas market was affected by the overall environment and was in the destocking stage last year. With the completion of destocking, sales this year have increased; in the domestic market, the company mainly relies on innovation and channels to drive performance.

Innovation mainly refers to the increase in product categories, while channels mainly refer to the development of new platforms. Specifically, Supor, which is famous for its frying pans and rice cookers, has also launched corresponding products for the elderly, mothers and babies, outdoor and other sub-groups and scenarios in recent years. In addition to the "popular" categories such as wall-breaking machines, electric stew pots, and health pots, the company's more distinctive products include warm vegetable plates and automatic cooking machines.

From the channel perspective, Supor's strategy is the same as other brands, which is to increase investment in social platforms and short video platforms. When traditional e-commerce platforms such as Tmall and JD.com are becoming saturated, applications such as Douyin, Kuaishou, and Xiaohongshu provide new growth.

Liang Zhenpeng, a senior industrial economics observer, told the Beijing Business Daily that emerging tracks such as Douyin and Kuaishou have gradually become popular, and the advantages of Kol influence and scenario-based marketing have been continuously demonstrated. Accompanying the personalization of home appliances is "content-driven consumption". Compared with traditional e-commerce, social media has richer browsing content and is more likely to stimulate users' desire to buy. On an invisible level, social applications are also more accurate in algorithms and push notifications, which is also superior to traditional e-commerce.

The financial data reflects Supor's marketing strength. In 2022 and 2023, the company's sales expenses increased by 12.9% and 6.56% year-on-year respectively; in the first quarter of this year, it continued to increase by 7.11% year-on-year to about 590 million yuan.

However, there are also hidden concerns behind Supor's growth. Supor said that in an environment where consumers tend to be rational, the company's gross profit margin has been affected to a certain extent. From the data, after two years of growth in 2022 and 2023, the company's gross profit margin in the first quarter of this year was 24.42%, a year-on-year decline of 3.18%.

Industry insiders believe that the fierce internal competition in the domestic market has led to "increased volume and falling prices", and there is a trend of consumption downgrade in small kitchen appliances, which is quite unfavorable for leading companies.

This trend is also reflected in the data. According to statistics from Aowei Cloud Network, during the "6.18" period this year, the retail scale of all categories of kitchen appliances, including rice cookers, wall breakers, and induction cookers, was 3.28 billion yuan, a year-on-year decrease of 10.3%. Among them, the traditional channel was 2.48 billion yuan, a year-on-year decrease of 15.8%; although the Douyin channel increased by 11.9% year-on-year, the sales volume was only about 800 million yuan, which cannot be compared with the traditional channels.

Judging from the average market price, the average price of all types of small kitchen appliances during the "6.18" period this year was 201 yuan, while the average market price in the same period last year was 219 yuan. Based on this calculation, the average price this year has fallen by 8.3%. In terms of categories, induction cookers, electric pressure cookers, and air fryers are all "unavoidable."

Through horizontal comparison, we can see that price war is indeed a problem in the industry. However, in the context of declining gross profit margins, the company with more new products and more freshness for consumers will have higher profit margins. Taking the first quarter data as an example, Supor's competitor Joyoung's gross profit margin was 26.92%, a year-on-year decline of 3.4%; Bear Electric Appliances' gross profit margin was 38.51%, a year-on-year decline of 3.14%. It can be seen that the "newer" Bear Electric Appliances is more profitable.

Regarding the issue of innovation, Supor wants to make steady progress. In its latest investor relations activity record, it mentioned that the company must maintain good competitiveness and a high market share in rigid demand categories, while also choosing to enter some categories that have market capacity and can develop sustainably.

From the industry's point of view, leading companies like Supor are facing a dilemma. Liang Zhenpeng said that it is a difficult problem for Supor to balance new and old product lines, but in the foreseeable future, the company's focus will still be on traditional categories. After all, although there are many new small kitchen appliances now, there are not many that are truly shipped in large quantities on a large scale. Especially for a company like Supor with annual revenue exceeding 20 billion yuan, it cannot easily change its course.

A Beijing Business Daily reporter interviewed Supor on related issues, but no response was received as of press time.

Beijing Business Daily reporter Tao Feng and Wang Zhuli