Chinese Stationer Swaps Pens for Cosmetics in Search for Growth
Liao Shumin
DATE:  Jun 06 2019
/ SOURCE:  yicai
Chinese Stationer Swaps Pens for Cosmetics in Search for Growth Chinese Stationer Swaps Pens for Cosmetics in Search for Growth

(Yicai Global) June 5 -- Shanghai M&G Stationery plans to start retail and wholesale sales of cosmetics as the company expands beyond its traditional business to find new sources of profit growth, it said in a statement yesterday.

The Shanghai-based company has seen positive results in recent years from efforts to transform into a cultural and creative enterprise from a stationery giant, a sector that is not only cyclical and seasonal but also faces unique challenges.

Net profit at the listed company jumped 27 percent to CNY806 million (USD116.7 million) last year on a 34 percent gain in revenue to CNY8.53 billion (USD1.24 billion). The firm projects revenue to grow 27 percent again this year to CNY10.84 billion.

M&G Stationery is trying to cast off an 'old brand' image and is piloting a crossover strategy linked with youth marketing. It has started working with cosmetics brands to enhance the association between M&G and the makeup category in the minds of consumers.

Subsidiary Shanghai M&G Colipu Office Supplies added cosmetics, cleaning and sanitary products to its business scope last October. The following month, M&G injected CNY320 million into the unit to promote its development. This year, M&G joined with popular domestic cosmetics brand Mariedalgar to unveil a limited edition make-up collection before introducing one for the cherry blossom season with Maxam, a brand under Shanghai Jahwa Group.

The company's traditional stationery market is cyclical and saturated. Low-priced writing instruments and student stationery offer less income elasticity, M&G said in its annual report last year. Hence its efforts to seek new growth opportunities.

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Keywords:   — Shanghai M&G Stationery,Cosmetics