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Recently, the emerging consumer product company Jiaoxia was reported to have laid off employees. Today, the reporter confirmed from a former employee that due to internal structural adjustments, the marketing department was merged into the sales department, the entire brand department was removed, and all related personnel resigned.

The aforementioned employee told the reporter that in fact, more than the aforementioned marketing department was involved in the layoffs. Many departments were involved, involving one or two hundred people. It was a relatively large structural adjustment, and the CMO also resigned.

The reporter called the company to verify the above information, but received no response.

Qichacha shows that the number of people insured in Jiaoxia’s annual industrial and commercial report in 2023 is 516.

Jiaoxia initially started out as a sun umbrella and created some hit products in the sun protection field. Today, Jiaoxia's product line has expanded to multiple categories such as sun protection clothing and sun protection masks. As a leading company in a new consumer brand that was popular a few years ago, Jiaoxia is a leader in the sun protection category. The prospectus was first submitted to the Hong Kong Stock Exchange in April 2022. After it expired, Jiaoxia submitted the prospectus again in October 2022. But since then, there has been no further news on Jiaoxia's road to listing.

Analysts believe that the company's ability to stand out from the crowded market earlier was due to its mastery of traffic. As a DTC brand, Jiaoxia has invested heavily in marketing, using top influencers such as Li Jiaqi to promote products, cooperating with thousands of KOLs in half a year, and using social media platforms and e-commerce live broadcasts to build its reputation.

Judging from the results, Jiaoxia has also tasted the sweetness. According to the previous prospectus, the company's revenue in 2019-2021 was 380 million yuan, 790 million yuan and 2.4 billion yuan respectively, with an annual compound growth rate of 150%. In the first half of 2022, Jiaoxia's revenue was 2.21 billion yuan, a year-on-year increase of 81.3%. With a series of high-gross-profit products such as clothing, umbrellas, hats, and accessories, Jiaoxia's overall gross profit reached 60.3%. However, correspondingly, Jiaoxia's advertising and marketing expenses have been rising, from 36 million yuan in 2019 to 587 million yuan in 2021, and the proportion of total revenue has increased to 24.4%.

But at that time, there was also anxiety for Jiaoxia. The company started with the sun umbrella business, and sun protection clothing has always been Jiaoxia's trump card product. However, just like down jackets have seasonal attributes, sun protection clothing is also mainly worn in summer. After the hot sales in a single season, how to deal with the off-season sales in the other three seasons and extend the sales cycle to four seasons is also a problem that Jiaoxia needs to consider. The company once said, "Compared with the first half of 2022, the company expects that the business, financial condition, operating results and prospects in the second half of 2022 will be affected by seasonality, especially product sales and advertising and marketing expenses.

In addition, in the early days of the business, the sun protection clothing market was almost a relatively blank blue ocean category. At that time, Jiaoxia seized the market through the explosive product strategy and quickly became the leader in the segmented track, but then many new players also poured into this field. The huge potential of the sun protection track has spawned many brands focusing on this vertical category, such as ohsunny, sinsin, and VVC. In addition, Uniqlo, Bosideng, Heilan Home, Li Ning, Metersbonwe, Semir, etc. have entered the market in recent years.

In its prospectus, Jiaoxia mentioned that it did not build its own factory, but adopted the OEM model. This means that as long as consumers can find the "source supplier", they can buy the same brand at a low price. "The entry threshold of this category is very low. It was OK when there were not many players in the early days, but now the competition is too fierce and the actual profit is not high." A brand insider told reporters.

This forces Jiaoxia to focus on new categories. In 2023, the company announced its transformation, upgrading its product matrix to enter the light outdoor market, and invited Jay Chou to endorse it. At present, although the light outdoor market is huge, the domestic outdoor sports market has long entered a stage of fierce competition, and the old players in the outdoor track continue to make steady efforts. Mid-to-high-end brands such as Arc'teryx and The North Face have professional product blessings, while the popular Decathlon wins in the affordable and diverse outdoor product matrix. On the contrary, Jiaoxia does not have absolute professional outdoor brand advantages and product hard-core support.