Author | Wang Xiaojuan

Editor | Huang Yu More than half a year ago, e-commerce giants began to follow in the footsteps of PDD to launch "refund only". However, the drawbacks of "refund only" gradually emerged, and now Taobao is correcting its course. On July 26th, Taobao announced that it would optimize the "refund only" strategy, improve the seller's after-sales autonomy based on the new version of the experience score (store experience score), the higher the experience score, the greater the seller's disposal rights, and stores with a score of 4.8 or higher will receive more autonomy. The relevant policies will be officially implemented on August 9th. It's easy to see that Taobao is trying to strike a new balance between user experience and seller rights. Over the past few years, the biggest change in the e-commerce industry has been the rise of PDD. In addition to low prices, "refund only" is also a core factor in PDD's success. Therefore, e-commerce platforms have gone from questioning and understanding PDD to learning from PDD. At the end of last year, in order to strengthen consumer rights, Taobao began to support buyers for refund only, and JD.com also revised its guidelines to add standards for user refund only. However, while "refund only" protects consumers, it is also vulnerable to abuse by "wool party" and causes harm to seller rights. For example, during this year's June 18th promotion, many clothing merchants stated that the return rate can reach 80% or even 90%. Since consumers can apply for a refund without returning the goods for quality issues, a large number of merchants are experiencing significant losses. Insiders at Taobao told Wall Street News that Taobao is taking a beneficial exploration between users and sellers by optimizing the "refund only" based on the store experience score. "By guaranteeing consumer rights, it also significantly optimizes the business environment and forms a more benign and healthy e-commerce ecology." This also conforms to the current tone of Taobao's adjustment of the business environment. Recently, Taobao launched a round of scale modification for merchants, such as clarifying that "experience score" is the core basis for traffic distribution. In addition, from September 1st, Tmall will cancel the annual software service fee for the platform. However, Taobao's relaxation of the "refund only" rights of sellers is only to a certain extent. The premise for sellers to obtain autonomy is to continue to improve their service capabilities. At the beginning of the year, Taotian announced the upgrade of the new store comprehensive experience rating standard. After the upgrade, the rating focuses more on consumer-related indicators such as "refusal rate for refund" and "platform help rate." In addition, services that affect consumer shopping decisions, such as "return insurance", will also be a bonus for merchants. In other words, if sellers want to get high scores, they really need to serve consumers well. Of course, Taobao also provides practical rewards such as traffic to high-quality merchants, and this time it has also ceded some after-sales rights. Wall Street News learned that after the optimization strategy of "refund only" is launched, Taobao will not actively intervene through Wangwang or support refund only after receiving goods for sellers whose store experience score is greater than or equal to 4.8. Instead, Taobao encourages merchants to negotiate with consumers first. In short, Taobao will reduce or cancel after-sales intervention for high-quality stores, and the platform will give different degrees of autonomy to merchants according to the experience score and industry nature. In addition to giving merchants more autonomy, Taobao will also provide multiple after-sales service solutions for merchants to choose from, guiding merchants to continuously optimize after-sales services and reduce disputes and losses caused by "refund only". It is worth mentioning that Taobao has also optimized the appeal process for "refund only". After the user initiates an appeal, the platform will invite a third-party testing agency to sample the product. If the test passes, the platform will compensate the loss to the seller. As Taobao adjusts the "refund only" policy, it is time for the industry's grand "learning from PDD" campaign to reflect. In the increasingly fierce e-commerce competition, true innovation and differentiation can bring greater competitiveness than copying and learning from others.

Bosideng sold well this summer.

Recently, the leading down jacket company Bosideng Group announced its interim performance for the 2024/2025 fiscal year. As of September 30, 2024, Bosideng Group achieved revenues of 8.804 billion yuan, an increase of 17.8% year-on-year; the profit attributable to shareholders was 1.13 billion yuan, up 23% year-on-year.

Given the overall downturn in the outfits industry, this achievement is particularly commendable.

Bosideng Group's main business is primarily divided into brand down jacket business, OEM management business, women's clothing business, and diversified outfit business.

Specifically, the core down jacket business remains the largest source of revenue for the group. In this reporting period, the down jacket business achieved revenues of 6.063 billion yuan, up 22.7% year-on-year. Additionally, the OEM management business generated revenues of 2.319 billion yuan, an increase of 13.4%; and the diversified outfit business generated revenues of 0.117 billion yuan, up 21.3% year-on-year.

Looking at the brands under the group, the majority is still the bosideng brand.

Among them, bosideng brand revenue increased by 19.4% year-on-year, reaching 5.28 billion yuan, accounting for over 87% of the down jacket business. The other two brands, with a business share of 6.4%, snow flying brand revenue grew by 47.1% year-on-year, and ice clean brand with a business share of 0.4% saw revenue increase by 61.5%.

However, beneath the prosperous performance, bosideng is not without worries.

First, like the overall downturn in the women’s apparel industry, bosideng's women’s apparel business has experienced a decline of over 20%.

During this reporting period, the bosideng group’s women’s apparel business revenue was approximately 0.308 billion yuan, accounting for 3.5%, a year-on-year decrease of 21.5%. Currently, bosideng has four mid-to-high-end positioned brands—Jesse, Bangbao, Koliano, and KeLuoba; however, during this reporting period, the revenue of these brands decreased year-on-year by 16.1%, 31.3%, and 19.9% respectively.

The number of women’s apparel stores has also decreased. During this reporting period, the total number of retail stores in the women’s apparel sector net reduced by 29 compared to the same period last year, down to 396 stores. Among them, direct-operated stores decreased by 24, down to 305.

In addition, the characteristics of the down jacket industry also constrain this leading group. In the down jacket industry, the long inventory cycle has always been a pain point. In this reporting period, the inventory cycle of bosideng increased by 29 days, reaching 189 days, and the payable cycle increased by 41 days, reaching 260 days.

In explaining this data increase, bosideng stated that this is mainly due to early inventory preparation, slightly earlier production, and slowing down the rhythm and speed of shipments to dealers.

When the overall performance is decent, these concerns are of little consequence for bosideng. For bosideng, however, the greater challenge lies in its ongoing efforts over the past few years towards high-end positioning and diversification, which have not been optimistic.

Since 2018, bosideng has been raising prices and has aggressively invited celebrity endorsements. However, in the past two years, consumers have become more cautious, and high-end down jacket brands like canada goose and Moncler have also increased their presence in the china market, making bosideng's path to high-end positioning even more challenging.

This year's singles' day sales reports show that bosideng became the only down jacket brand with sales exceeding 1 billion on Tmall. But when opening its store, based on sales ranking, the best-selling items are two lightweight men's down jackets priced at 299 yuan and 199 yuan, with only one item among the top ten best sellers priced over 1000 yuan.

From the performance of its various brands during this reporting period, the performance growth of the cost-effective brand Xuezhongfei increased by nearly 50%. This indirectly proves that the cautious attitude of consumers directly affects the completion of the company's global strategy.

While the brand is aggressively pursuing high-end positioning, this has not been reflected in the gross margin. In this reporting period, bosideng's down jacket business gross margin declined by 10 basis points to 61.1%.

The overall gross margin of the group is also declining. From the fiscal year 22/23 to 23/24, bosideng group's gross margin decreased from 70.8% to 69.6%, and during this reporting period, its gross margin declined year-on-year by 10 basis points to 49.9%.

Moreover, there are many voices among consumers who do not recognize bosideng's high-end positioning. After all, the high-end positioning of many brands is taken on by new brands, and significant price differences under the same brand will inevitably be detrimental to the sales of high-priced items.

In this regard, bosideng has also made plans. In October, bosideng confirmed it had acquired over 30% of Moose Knuckles' shares, planning to enhance its competitiveness in the global high-end market through this brand.

The down jacket category is always greatly affected by the seasons, and regarding this aspect, bosideng began exploring diversified business early on.

The founder of bosideng, Gao Dekang, has stated that bosideng plans to raise the sales proportion of non-down products to over 40% as a new growth curve for the company. However, this goal has not yet been achieved, as in the first half of fiscal year 2025, revenue from non-down business accounted for approximately 31% of bosideng's total revenue, and this proportion has declined compared to the past.

In recent years, with the popularity of the "Gorpcore" trend, bosideng is also trying to enter more vertical outdoor fields, competing with brands like Arc'teryx, and even using GORE-TEX fabric to produce jackets.

In addition to jackets, bosideng is also producing sun protection clothing to extend the product sales cycle, catering to summer demand. However, its market performance for sun protection clothing has not been good; as a latecomer, consumers lack awareness of bosideng's sun protection clothing, and it has some distance to cover in competing with professional brands like Jiao Xia and Jiao Nei.

New business has also affected the group's gross margin. bosideng explained that the decline in gross margin was also influenced by the newly launched sun protection clothing business with lower gross margins.

It can be seen that the high-end and diversified path of leading groups is not easy.

Facing the future, bosideng's management hopes to achieve a sales target of 30 billion yuan by 2026. Its sales for the 23/24 fiscal year were 16.8 billion, which means it needs to double its sales in the next two years.

In the current cautious consumer spending environment, this performance growth target is also filled with challenges. bosideng needs more innovative products and strategies to continue to grow against the trend.