Zhouliufu IPO Will Be Around The Corner: More Than 3000 Franchise Stores Support More Than 1 Billion Revenue, Trademark Disputes Still Exist

Zhou Liufu, a well-known jeweler, is going to be on the market.

On October 29, zhouliufu Jewelry Co., Ltd. (hereinafter referred to as zhouliufu), which was once "dragged down" by GF Securities, will finally go to the meeting for examination.

Zhouliufu is a fashion jewelry group integrating jewelry R & D design, production and processing, chain sales and brand operation. As of June 30, 2019, the company has 3425 franchise stores and 28 self operated stores, with a marketing network all over the country. According to the certificate issued by China Baoji Association, as of December 31, 2018, the number of outlets in zhouliufu was ranked among the top four among the listed companies in the same industry. Among them, Zhoufu group has been listed in the stock market, and there are 16 leading enterprises in the industry, such as Zhoufu group (867.006), Zhoufu group (16.006.007.006), Zhoufu group (16.006.007.006), Zhoufu group (16.006.007.006), Zhoufu group (16.006.006.006), Zhoufu group (16.006.007.006), Zhoufu group (16.006.006.

IPO supported by more than 3000 franchise stores

After the jewelry brands such as Chow Tai Fook, Chow Tai Sheng and Zhou Sheng Sheng are on the market, Zhou Liufu, a younger brother of the Zhou family, will also be on the market.

From its establishment in Shenzhen in 2004 to its rapid listing, the rapidly expanding franchise stores have contributed a lot to Zhou Liufu.

According to the latest prospectus (Draft for the meeting), as of June 30, 2020, the company has 3425 franchise stores and 28 self operated stores. From 2017 to the first half of 2020, the net number of stores added in each period of zhouliufu report period was 489, 529, 665 and - 21, respectively.

"The company's" channel first "strategy and a series of supporting strategies are the key to the rapid growth of franchise stores." Zhou said.

Zhou Liufu said that the company gives full play to the advantages of the franchise mode, implements the "channel priority" strategy, and cooperates with high-quality franchisees from all over the country, so as to quickly establish a broad chain network by using the local business circle resources, human resources and capital resources of these franchisees.

At the same time, the company has a competitive franchise policy to attract high-quality franchisees. In jewelry brands with the same channel scale, the company's overall franchise policy is relatively more favorable. In addition, in 2017, the company's brand use fee policy for pure gold products was adjusted from charging per gram to charging a fixed amount by store annually, which is more attractive to high-quality franchisees.

In addition, it provides a basis for rapid growth of the jewelry industry.

The sharp fall of gold price in 2013 triggered a boom in gold jewelry purchase among consumers, which also overdrawn the demand for gold jewelry in advance. As a result, the whole jewelry industry experienced a relatively low tide from 2014 to 2016. Since 2017, the income of residents has increased year by year, diamond penetration rate has been continuously improved, young consumer groups have risen, and the demand for jewelry in the third and fourth tier cities has been increasing Driven by various favorable factors, the jewelry industry began to show a warming trend in consumption in 2017.

At the end of 2014, the national jewelry Standards Technical Committee revised the mandatory national standard "regulations and nomenclature method of precious metal purity of jewelry" (gb11887-2012), eliminating the appellations of "thousands of gold", and guiding consumers to pay more attention to jewelry design, technology, style and brand value.

Zhou Liufu believes that in this context, for jewelry store operators all over the country, especially in the third and fourth tier cities, their business model of no brand or self created brand in the past has been seriously challenged. Due to their disadvantages in scale, capital and cost, and their own lack of ability in brand operation and management, product marketing design, enterprise operation and operation, they are in consumption In the case of more and more attention to brand, these operators will have to choose jewelry brands with greater brand awareness to develop together, and national jewelry brands will obtain good development opportunities. In addition, the franchise stores of the company covered the third and fourth tier cities highly during the reporting period. The relatively low price level and living cost of these cities made the local people have more discretionary property and higher consumption power.

According to the latest prospectus, during the reporting period, the main business income of zhouliufu mainly came from the franchise mode. From 2017 to the first half of 2020, the revenue of franchise mode was 807.17664 million yuan, 132.256.3 million yuan, 1763.6312 million yuan and 49.299.39 million yuan respectively, accounting for 86.45%, 82.18%, 82.00% and 62.05% of the main business income respectively. Although the proportion showed a downward trend year by year, it was still relatively high.

Zhou Liufu said frankly that the franchise mode enables the company to quickly occupy the market, which is in line with the brand development stage of the company and the strategic requirements of "channel priority" formulated by the company. However, the excessive dependence on the franchise model may bring certain operational risks. If the franchisee withdraws its stores on a large scale, stops operation or changes its brand, and fails to renew the shop lease contract or joint venture contract, and the company is unable to timely and effectively adjust the type and layout of channels, the product sales will face the risk of slowing down or even falling Business development will also be adversely affected.

"Jewelry industry is a capital intensive industry with high distribution cost and great pressure on working capital. The franchise mode can greatly reduce the financial pressure, but it will also bring challenges to brand management and operation Cao Chunxiang, founder of myse Oriental jewelry cultural and creative brand, told 21st century economic reporter.

"If I'm self-employed, I have to invest a lot of money to open my own store. In the franchise mode, the brand can expand rapidly at low cost, but the control over the brand is not so strong, such as the tonality of the franchise store, whether the products will be" mixed "and so on A senior jewelry industry person who insisted on self support told reporters.

However, there are not a few jewelry brands that rely on the franchise model. "Lao Fengxiang also has many franchise stores," she says.

The franchise mode allows zhouliufu to expand rapidly, but the operation and management under the mode of relying on franchise is also full of challenges.

According to the public data, zhouliufu was twice punished by Shenzhen authorities for illegal behaviors during the reporting period, and the unqualified products of zhouliufu were also found in the spot check of Shanghai precious metal products quality supervision in 2017.

"Zhouliufu" trademark still in dispute

Similar brand names with "zhoudafu", "zhoudasheng", "zhoushengsheng" and other jewelry brands make zhouliufu, which came out later, always makes people feel familiar.

However, with the "brand shortcut" followed by the trademark problem has been plagued Zhou Liufu.

As the law of Hong Kong stipulates that registration can be completed by one word difference, there is often a situation in Hong Kong where "Li Kui and Li Gui" are confused. Among them, there are several companies with the word "Zhou Liufu" in their registered names in Hong Kong alone.

In 2015, a number of companies with names including "zhouliufu" gold and diamond (now renamed "Dongguan Huangyue" jewelry), Hong Kong zhouliufu Gold Diamond Jewelry Group and Fujian zhouliufu Gold Diamond Jewelry Co., Ltd. filed a lawsuit against zhouliufu, aiming at the plaintiff's prior right to use the commodity name "zhouliufu" and confirm "zhouliufu" The three Chinese characters do not enjoy the right of registered trademark. It is confirmed that the Chinese "zhouliufu" is not the unique name of well-known commodities, but a common name widely accepted by the public to refer to jewelry commodities after being used by many enterprises and operators.

Until now, the case has not been decided.

"Zhouliufu should be regarded as the first tier jewelry brand in China. In the past two years, zhouliufu is also making some new attempts, including the combination of some IP addresses on the Internet, etc. I personally think the design ability may still need to be strengthened. This kind of design ability is not only about the technology of the product itself, but also from the perspective of beauty, fit for wear and other aspects, how to get close to international brands, which needs to be continuously strengthened. This may also be the problem faced by domestic jewellers. How to embody the value of cultural innovation is still our short board. " Cao Chunxiang thinks.