The rumor of Blue Moon's IPO may either confirm the company's bottleneck or reflect its cash needs. Like low-profile companies such as Wahaha and Laoganma, Blue Moon, which had never shown signs of going public, is now rumored to be planning an IPO. Apart from Shanghai Hongzhang Investment as shown by Zero2IPO Research, Hillhouse Capital is Blue Moon's only external investor. Zhang Lei, who is keen on "finding the best companies and being a friend of time," personally drove Blue Moon's rise to prominence through laundry detergent. Besides providing long-term capital support to build a moat, Zhang Lei also connected Blue Moon with JD.com to fully develop online sales. In 2015, when Zhang Lei and Luo Qiuping discussed internet thinking, it was also a year of "change, change, change" for Blue Moon, perhaps indicating that Blue Moon's moat was not deep enough. Blue Moon, which had taken too big a step, suspended cooperation with some hypermarkets in 2015, intending to build its own sales channel, "Moon House." But the reality was that it was completely held hostage by big-box retailers. In 2017, its laundry detergent market share was overtaken by Liby, and Moon House came to an end. Against the backdrop of rapidly rising marketing expenses and pressure from peers, whether Hillhouse Capital can pick the fruit of Blue Moon remains a question. **-01- Blue Moon has Hillhouse above it It is reported that Blue Moon is considering a Hong Kong IPO in 2020, planning to raise about $400 million. This news, with little verifiable information, easily reminds people of Hillhouse Capital, which is often associated with Blue Moon. Zhang Lei's support for Blue Moon is well-known in the capital circle. But interestingly, how Zhang Lei invested in Blue Moon and how much he invested remains a mystery. Although there is little information, judging from the frequency with which Zhang Lei mentions Blue Moon in public, investing in Blue Moon is seen by Zhang Lei as an important battle for Hillhouse Capital to enter the consumer goods industry. Whether it was Belle or Gree that Zhang Lei later invested in, Blue Moon can be said to be the pioneering work. Regarding his optimism about Blue Moon, Zhang Lei once publicly stated that in 2008, Hillhouse Capital, which was studying consumption upgrading, saw that multinational companies like P&G and Unilever had occupied the household washing market, but these multinationals' historical baggage prevented them from seizing the trend of consumption upgrading, which brought opportunities for local Blue Moon. It is reported that Zhang Lei first met Blue Moon founder Luo Qiuping in 2006, when Blue Moon's main product was still hand sanitizer. Zhang Lei once said that he had known Luo Qiuping for a long time, but they did not formally cooperate until 2010. Before formally investing in Blue Moon, Blue Moon, which had just launched laundry detergent in 2008, greatly aroused Zhang Lei's interest, and encouraging Blue Moon to enter the laundry detergent market became Zhang Lei's "own business." In 2010, most multinational companies were still selling powdered detergents in China, but with strong support from Hillhouse Capital, Blue Moon seized the opportunity in the gap thanks to laundry detergent. In 2013, thanks to the hot sales of laundry detergent products, Blue Moon's annual sales increased from 400 million yuan in 2007 to 4.3 billion yuan, with a compound annual growth rate of 49%. Blue Moon's market share of laundry detergent ranked first for six consecutive years from 2008 to 2013. It can be said that Blue Moon led the transformation of China's washing market from washing powder to laundry detergent. Hillhouse Capital's management of Blue Moon was a process of first suppressing and then promoting. Because consumers' washing habits cannot be easily changed, the promotion of laundry detergent was undoubtedly costly. In the early stage, Blue Moon, which was originally profitable, became a loss-making enterprise. But this approach is very Zhang Lei. Hillhouse Capital's evergreen fund model can provide companies with the longest-term capital. Whether it is the previously invested JD.com, which lost money for 8 consecutive years, or the recent Belle, in Zhang Lei's view, the early losses of more than one billion are just a few points in the fund, but helping companies build a moat can achieve long-term value creation. On the other hand, in the process of reshaping Blue Moon, Zhang Lei paid more attention to the development of online channels. Entrepreneurs in portfolio companies can learn from each other's strengths, and Zhang Lei's investment characteristic also allowed JD.com and Blue Moon, which he invested in at about the same time, to connect. Blue Moon learned about e-commerce and social media, while JD.com learned about product sales. One result of a seminar was that Blue Moon redesigned its detergent packaging to fit more easily into JD.com's delivery boxes. Relying on the JD.com platform, at the marketing level, the two sides have repeatedly carried out "Super Brand Day" activities, and relied on JD.com's logistics to reduce the cost of single delivery, forming synergies. **-02- There is no "river" in Blue Moon On the ultra-long track that Zhang Lei does not care about, whether it is ten, twenty, or even thirty years, Blue Moon, which has become the number one in laundry detergent, has shown its glory. But laundry detergent has developed rapidly in the category of liquid detergents in China. According to statistics from the Prospective Industry Research Institute, in 2012, laundry detergent accounted for only 28.42% of liquid detergents in China, but by 2018, the proportion quickly rose to 44.53%, and the market size grew to about 53 billion yuan. Among the many cake dividers, besides Blue Moon, brands such as Tide, Chaoneng, Liby, Ariel, and Lonkey are also rising rapidly. In 2015, when Zhang Lei and Luo Qiuping discussed internet thinking, it was also a year of "change, change, change" for Blue Moon, perhaps indicating that Blue Moon's "moat" was not deep enough. In June 2015, Blue Moon launched a massive exit campaign with Auchan, Carrefour, RT-Mart and other hypermarkets, seemingly breaking with the "supermarket" channel. This move was interpreted by the outside world as an intention to reduce the proportion of sales in the KA channel. Blue Moon President Luo Qiuping once expressed that the promotion cost of the KA channel was too high and intended to cancel promoters. It is worth noting that in the early stage of entering the laundry detergent market, Blue Moon adopted a human-wave tactic in the KA channel. In the second half of 2015, Blue Moon launched a new sales channel independently developed called "Moon House," which was a new O2O + direct sales model. However, this self-built channel attracted a lot of controversy. For example, at the beginning, the positioning of Moon House physical stores was to integrate sales, distribution, and service, but when it was actually implemented, it became a demonstration store only responsible for sales and publicity. The logistics partners changed from Tmall and JD.com at the beginning to regional water stations after several changes. According to reports from Beijing Business Today, by the end of 2017, "Moon House" stores had been subleased one after another, and the official WeChat platform "Moon House" was renamed "Blue Moon Scientific Laundry." The Moon House plan came to an end. Perhaps it was Blue Moon's abandonment of some offline channels and the great leap forward of new channels. Data from Euromonitor showed that Blue Moon's market share in China fell from 23.4% in 2012 to 20.3% in 2016. Subsequently, the market share of its main competitor Liby laundry detergent reached 26% in 2017, overtaking Blue Moon. **After the setback, in the second half of 2017, Blue Moon began to rebuild the old path of supermarkets. Against the backdrop of rapidly rising marketing expenses and pressure from peers, how Blue Moon can dig a deeper moat remains a test. Some people say that the listing of the new economy is the last round of financing before decline. Blue Moon is neither a new thing nor an old industry, and due to the characteristics of PE, secondary market exit is almost a certainty. The rumor of Blue Moon's IPO may either confirm the company's bottleneck or reflect its cash needs. Source: Global Tiger Financial A reward of 400-2000 yuan will be paid once the tip is adopted.