Born into an ordinary teacher's family in Yantai, Shandong, Wang Xuning was never constrained by institutional thinking. Driven by personal interest and dedicated research, he became the "Father of Soymilk Machines" and made Joyoung a household name. At its peak, Joyoung's market value once surpassed Haier Smart Home. It's no exaggeration to say that Joyoung was once the undisputed leader in small kitchen appliances, and Wang Xuning created an undeniable business legend in China's commercial landscape.

However, in recent years, Joyoung's performance has been disappointing, especially its profits, which have declined for three consecutive years. Meanwhile, its main competitors, Supor and Bear Electric, have thrived against the trend, either outperforming Joyoung in revenue or surpassing it in profits. As a veteran player, Wang Xuning is undoubtedly under immense pressure.

Can he lead Joyoung to break through the 困境 and return to the billion-yuan club?

1. Is the Small Giant Losing Steam?

In the highly mature small appliance market, the stable financial reports of top players hardly attract netizens' attention. Instead, unusual performances draw more focus. In 2023, Joyoung's stock price achieved revenue of 9.613 billion yuan, a year-on-year decrease of 5.54%, with net profit attributable to the parent company of 389 million yuan, down 26.58% year-on-year. After deducting non-recurring gains and losses, the net profit was 353 million yuan, a 35.76% decline. Following the earnings disclosure, Joyoung's stock price remained sluggish.

Behind Joyoung's continuous decline, there are undoubtedly macro factors in the industry. For example, AVC's 2023 full-channel data shows that the overall size of small kitchen appliances was 54.93 billion yuan, down 9.6% year-on-year, with offline retail sales of 42.2 billion yuan, down 10.7%, and online retail sales of 12.7 billion yuan, down 6.0%.

At the same time, competition from leading cross-industry players has intensified. For instance, giants like Midea Group have entered the small kitchen appliance sector, while Xiaomi, Dyson, Ecovacs, and Philips are competing fiercely in the home appliance and personal care segments.

Image: Qianzhan Industry Research Institute

However, the blame cannot be entirely placed on the macro environment and competitors, as players like Supor and Bear Electric in vertical segments have achieved growth against the trend:

On March 30, 2024, Supor disclosed its latest annual report. In 2023, the company achieved total operating revenue of 21.304 billion yuan, up 5.62% year-on-year; net profit attributable to the parent company was 2.18 billion yuan, up 5.42%; and net profit after deducting non-recurring gains and losses was 1.994 billion yuan, up 5.63%.

On April 8, 2024, Bear Electric disclosed its latest annual report. In 2023, the company achieved total operating revenue of 4.712 billion yuan, up 14.43% year-on-year, and net profit attributable to the parent company of 445 million yuan, up 15.24%. Both revenue and net profit hit record highs, achieving double-digit growth.

Therefore, Joyoung's performance slowdown requires more introspection into its own positioning to find a solution!

Supor's solution was significant cost reduction and efficiency improvement, with improved product and channel structures leading to further gross margin growth. Bear Electric's solution was outstanding performance in emerging categories, attracting young consumers with innovation, and optimizing marketing channels. What about Joyoung?

2. Can It Return to the Billion-Yuan Club?

A company's problems ultimately stem from its key people. At the end of 2022, Wang Xuning stepped down as chairman of Joyoung, succeeded by former general manager Yang Ningning, while former Dyson Greater China president Guo Lang took over as the new general manager. However, a year later, Joyoung remains stuck in the 低谷. Will Wang Xuning return to the front lines? That remains to be seen.

It's worth noting that the small kitchen appliance market differs significantly from traditional large appliances in that online consumers dominate. AVC's 2023 full-channel data shows that online sales are 3.3 times higher than offline sales. Whether Joyoung can significantly improve its online marketing effectiveness and GMV conversion in 2024 will be crucial to turning around its annual financial performance!

Additionally, returning to the product itself, no matter how big the brand, product quality and after-sales service cannot be overlooked. On the Black Cat 投诉 platform, there are numerous complaints about Joyoung's flagship products like frying pans and blenders, which need urgent attention. After all, consumers spend money for 放心 and 安心。

Moreover, Joyoung's R&D strategy is commendable. Years ago, Wang Xuning established a three-tier R&D system for Joyoung—combining 前瞻性， innovation, and regular upgrades.

However, despite its strategic emphasis on R&D, Joyoung's actual R&D investment remains relatively conservative. From 2019 to 2023, Joyoung's R&D spending was steady, slightly over 4% in 2023, while sales expenses 长期 remained high at nearly 15% of revenue. Increasing R&D investment while reducing sales expenses might be key to Joyoung's turnaround.

In 2023, Joyoung's R&D team shrank by 8 people, from 713 to 705. In 2024, expanding the R&D team will require more investment, testing Wang Xuning's strategic resolve.

After over 30 years in the small appliance industry, Joyoung still has a solid foundation, which gives it the 底气 to innovate or reform. Can the 底蕴深厚的 Joyoung stage a comeback, surprising consumers and investors, and return to the path of a billion-yuan market cap and revenue?

Let's wait and see!