Red Dragonfly takes off with folded wings.
Zebra Consumer Chen Biting
The traditional footwear market is fraught with crises, and major shoe companies are well aware of their own situations. The veteran brand Red Dragonfly successfully turned a profit last year, which might be worth reflecting on.
Red Dragonfly is a star enterprise in Wenzhou, China's shoe capital. In its early years, it expanded aggressively nationwide. At its peak, it had over 4,000 stores and went public in 2015.
However, the good days didn’t last long. Since 2018, the company's revenue and performance have declined for five consecutive years. With the gradual implementation of its contraction strategy, it finally survived the prolonged adjustment period.
Has Red Dragonfly's crisis truly been resolved? In a vast and fiercely competitive footwear market, how can it revive its glory through digital transformation and rejuvenation?
Surviving the Tough Times
Those born in the 1970s and 1980s likely have vivid memories of Red Dragonfly shoes. Over 20 years ago, wearing a pair of Red Dragonfly shoes was a symbol of status.
Back then, brands like Aokang, Yearcon, and Senda, also from Wenzhou—China's shoe capital—flourished alongside Red Dragonfly.
With its simple yet profound logo, Red Dragonfly shoes were highly popular at weddings, business events, and other formal occasions.
Few know that before founding Red Dragonfly, Qian Jinbo first apprenticed as a painter under his brother-in-law and later learned carpentry from another brother-in-law. In 1995, the 31-year-old Qian invested all his savings to officially establish the Red Dragonfly brand.
As domestic footwear products gradually penetrated the market, Red Dragonfly built a vast sales network and reaped substantial profits.
Alongside ST Aokang (603001.SH), Red Dragonfly became a formidable force in China's footwear industry.
In 2015, Red Dragonfly went public on the A-share mainboard, becoming the second listed footwear manufacturer in Wenzhou after Aokang International.
Post-listing, the company accelerated its expansion, continuously growing its revenue. In 2017, it reached its peak performance, with operating revenue and net profit attributable to shareholders reaching 3.245 billion yuan and 382 million yuan, respectively.
However, Red Dragonfly (603116.SH) soon lost its luster. From 2018 onward, its revenue and net profit declined for five consecutive years, only stabilizing last year.
In 2023, the company achieved operating revenue of 2.469 billion yuan, a year-on-year increase of 9.65%. It turned a net profit attributable to shareholders of 51.9478 million yuan, with a non-GAAP net profit of 17.6698 million yuan.
The company plans to distribute a dividend of 2 yuan per 10 shares (including tax), totaling 115 million yuan—221.84% of its net profit attributable to shareholders.
Transformation of a Traditional Brand
How can veteran footwear brands overcome midlife crises? While ST Aokang struggles, Red Dragonfly is also striving. Both face the same challenge: how to rejuvenate their aging brands and attract younger consumers.
On this front, Red Dragonfly’s president, Qian Fan, has a clear vision. He once stated that younger generations have diminishing demand for traditional leather shoes. Even in formal business or social settings, comfort takes precedence over convention—a trend further reinforced in recent years.
Last year, Red Dragonfly updated its slogan to appeal to younger consumers. While maintaining its leather shoe expertise, it accelerated the launch of non-leather products, including platform loafers, chunky sneakers, and retro skate shoes.
The outside world suddenly noticed that the once-stodgy Red Dragonfly had changed. The company has now prioritized lightweight sports, outdoor, and casual fashion footwear.
Channel-wise, the company is also transforming. It reduced its store count to under 3,000 (2,962 by the end of last year), converted some franchise stores to direct operations, and shifted from street-side locations to shopping malls.
In 2023, Red Dragonfly had 449 directly operated stores (adult and children’s), generating revenue of 427 million yuan, up 27.96% year-on-year. Its 2,513 franchise stores brought in 868 million yuan, down 2.48%.
Meanwhile, the company strengthened its online presence, with chairman Qian Jinbo even hosting live streams. Online sales accounted for 683 million yuan, or 30.66% of total revenue.
The Key Figure: The Second Generation
Most of Red Dragonfly’s changes occurred after Qian Fan became president.
At the end of 2020, Qian Jinbo stepped down as president, handing daily operations to his son Qian Fan while remaining chairman to steer the company’s overall direction.
Qian Fan, now 38, holds a master’s degree in business management and studied abroad. After returning to China, he didn’t immediately join Red Dragonfly but worked at a Shanghai investment firm first.
Upon joining Red Dragonfly, like many second-generation successors, he rotated through R&D, design, and sales before becoming vice chairman and vice president in 2018.
Qian Jinbo placed high hopes on his son, expecting him to inject new ideas and vitality into the brand. Thus, Qian Fan became the key figure in the brand’s rejuvenation.
Amid shifting consumer trends and market upheavals, leading the brand toward younger demographics hasn’t been easy.
With Belle’s delisting, Saturday’s transformation, Fuguiniao’s bankruptcy, and Daphne’s strategic retreat, selling shoes has become increasingly difficult for traditional footwear companies.
However, Qian Fan has a clear understanding of the market: amid industry reshuffling and transformation, sporty and casual styles are shaping trends.
Beyond focusing on Red Dragonfly and Red Dragonfly KIDS, the company launched GONGJI, an original designer brand.
GONGJI’s debut showcased a different Red Dragonfly—one rooted in Chinese cultural trends while blending classic aesthetics, capturing the attention of the lightweight outdoor and sports crowd.
In its 2023 annual report, the company stated it would invest more in R&D and marketing for sneakers, skate shoes, and dad shoes, aiming to transform Red Dragonfly into a full-category fashion footwear brand.
The leather-shoe-clad Red Dragonfly is now embracing outdoor sports.
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