Blue Moon recently released its 2021 financial report. Data shows that in 2021, Blue Moon's revenue was HK$7.597 billion, and net profit was HK$1.014 billion, achieving high-quality and steady growth for the full year. Among them, the core business of fabric care and cleaning further solidified its advantage, with annual revenue of approximately HK$6.457 billion, a year-on-year increase of 15.4%. Notably, the newly launched products in 2021, the underwear-specific laundry detergent and the antibacterial deodorizing laundry detergent, received high market recognition, showing the potential of star products. Seeing this report card, one cannot help but be surprised. As we all know, the current market environment is undergoing tremendous changes. From the economic development at the macro level to the frontline market at the micro level, it is full of challenges, difficulties, and internal and external uncertainties. ****In an uncertain environment, the value of the leader becomes prominent First, looking at the overall economy, the shift in gears and slowdown, with significant downward pressure, is the judgment of many economists on China's current economic development. Of course, at the Central Economic Work Conference in October 2021, the official judgment was also clear: triple pressures of demand contraction, supply shocks, and weakening expectations, emphasizing "stability first, seeking progress while maintaining stability." In fact, under the disturbance of multiple external factors, the domestic consumer market in 2021 was under overall pressure. Although Blue Moon also faced operational pressure in the first half of 2021, its full-year performance remained steady with progress, growing 8.6% year-on-year. This shows that Blue Moon, as a leading brand in the daily chemical industry, has the ability to self-regulate and resilience when facing market economic challenges. Looking at the daily chemical industry, according to industry data from Euromonitor, the sales scale of China's daily chemical industry in 2020 reached 251 billion yuan, an increase of 10.2 billion yuan from the previous year, a year-on-year increase of 4.24%. Compared with the past growth rate of over 5%, it has declined. In the era of stock, outperforming the industry average is the strength of the leader! Finally, look at consumption. The pandemic directly led to overall weak consumption. The outbreak and rebound of the pandemic in multiple places increased the uncertainty of employment and income for middle- and low-income groups, significantly constraining consumption capacity and willingness; while high-income groups also significantly reduced consumption expenditure due to the constraints and lack of external consumption scenarios. This is also the key reason behind the official judgment of demand contraction. It is against this backdrop that Blue Moon still carried out various innovations and reforms in a planned and continuous manner according to its established policies, achieving steady growth in performance, which greatly encouraged and boosted confidence in both upstream suppliers and downstream distributors. This also verifies a saying: The harder the times, the more reliable the value of the leader. Even if market space is limited, in the era of stock competition, leading enterprises can leverage their competitive advantages to occupy more market share and thus achieve growth. Looking deeper, what is the reason behind Blue Moon's impressive financial data? This is also worth the attention of industry practitioners. ****Establish a solid competitive advantage and dig deep into the moat When the industry is in a period of rapid growth, it is natural for enterprises to achieve rapid growth; this is the dividend brought by the overall development of the industry. When dividends decrease, only a few enterprises can still maintain growth, which must be the result of continuously strengthening their own moats while enjoying market dividends in the past. What moats has Blue Moon dug? What insights can it bring? Combining Blue Moon's financial operating indicators and development history, we summarize three: First, the moat of "intangible assets"; second, the moat of "management"; third, the moat of "innovation." Let's discuss them one by one. First, the moat of "intangible assets" mainly refers to the brand. There are two important milestones here. Before 2008, Blue Moon's business was mainly hand soap and household cleaning products. At that time, the market share of laundry detergent in China was less than 4%. Foreign brands believed that the Chinese laundry detergent market was not yet mature and mainly promoted washing powder. In such a situation, Blue Moon resolutely invested heavily in developing laundry detergent and cultivating the market, tolerating short-term losses, thus bringing a larger pattern. At the same time, it signed Guo Jingjing and spent heavily on CCTV advertising. The slogan "Creating the Era of Laundry Detergent" made Blue Moon's "champion quality" deeply rooted in people's minds. Then in 2011, it launched a hand-washing-specific laundry detergent, in 2015, it launched the first metered pump-head "Concentrated+" laundry detergent in China - Machine Wash Supreme, and in 2018, it launched Supreme Biotechnology laundry detergent. In the process of subversion and self-subversion, Blue Moon, with washing as its core, continuously insight into demand changes, created products that consumers need, and also made consumers remember the Blue Moon brand. During the dividend period of category upgrading, it did not rush to seek profits but heavily invested in brand value, allowing Blue Moon to occupy consumers' brand mind share. Through innovative brand building to build and consolidate brand power, Blue Moon's knowledge marketing concept not only promotes products and brands but also conveys scientific washing knowledge and concepts to consumers based on rich research and production experience, enhancing consumers' awareness of cleaning products and improving their product usage habits and experience. In addition, Blue Moon Group also holds the "Blue Moon Festival" in the third quarter of each year, exclusively sponsoring the Mid-Autumn Festival galas of CCTV and Hunan Satellite TV, leveraging the natural association of the brand name with the moon and Mid-Autumn Festival to continuously carry out brand marketing. At the same time, through interactive segments in the galas, it sends a large number of gifts to consumers, bringing them a relaxed and pleasant cleaning experience and a new clean lifestyle, accompanying viewers to celebrate the festival. With nine consecutive years of the Blue Moon Festival and many years of exclusive sponsorship of the Mid-Autumn Festival gala, active interaction with the new generation of young people, and online and offline channel reach, Blue Moon's "long-term and large-scale brand investment" is probably unmatched by few enterprises. Relevant data shows that Blue Moon's laundry detergent and hand soap brand power index has ranked first for 11 consecutive years (2011-2021); Blue Moon's laundry detergent has ranked first in industry market comprehensive share for 12 consecutive years (2009-2020), and laundry detergent for 9 consecutive years (2012-2020). The value of a brand lies not in the brand name itself, but in consumers' first-mind awareness of Blue Moon, which no one can take away or snatch. Second, the moat of "management." Management is more internal to the enterprise. Although we as observers cannot know the direct management advantages, the external manifestations of management are clearly visible. In recent years, the external retail format has been changing rapidly, especially with the emergence of new formats under the influence of the pandemic. Facing the emergence of multiple retail channels, the enterprise's response speed and organizational alignment can also reflect the dynamic management level behind it. In 2012, when e-commerce was just emerging, Blue Moon began to actively layout, cooperating with Tmall and JD.com to seize the first opportunity for online development. In 2020, when the pandemic boosted the rapid development of O2O channels, Blue Moon also actively expanded its business. In 2021, Blue Moon climbed to the top tier in the O2O platform rankings of JD Daojia and Meituan Flash Purchase. In addition, laying out online live streaming platforms and building a self-operated account matrix also boosted Blue Moon's sales. According to the financial report, in 2021, Blue Moon's online channel achieved revenue of HK$3.806 billion. Of course, the reform of traditional offline channels has also been effective, with distributor revenue increasing by 50% year-on-year in the second half of 2021. In exchanges with some distributors, the author clearly found that Blue Moon has also made great efforts in offline channels in the past year. First, it implemented channel classification management to match different products in different channels, reducing the risk of cross-channel dumping; second, it strengthened the control of the price system, scientifically and reasonably allocating the value chain to ensure the "dual growth" of distributor profits and sales; third, it deepened and refined the county market, penetrating to the town and village levels, improving the layout in traditional offline channels. Whether it is seizing new channels or optimizing traditional channels, this is brought about by the "management" moat behind Blue Moon. Frankly speaking, channels are not static. We have reason to believe that even if more channels emerge or evolve in the future, Blue Moon can still effectively regulate and scientifically design through the invisible hand of "management." After all, leading brands can often use more efficient management capabilities to quickly adjust and promote change, resisting external shocks with great resilience. Third, the moat of "innovation." What is innovation? At the product level, it is simply understood as: making different and good products. Not only to make products that have been defined by the industry, but also to redefine products based on demand. As a pioneer in the laundry detergent market, Blue Moon's star flagship product, the Deep Clean Care Series laundry detergent, has endured and become a truly long-life-cycle big product. In 2021, Blue Moon's newly launched underwear-specific laundry detergent and antibacterial deodorizing laundry detergent were favored by the market as soon as they were launched. Among them, the underwear-specific laundry detergent ranked first in pre-sales for underwear laundry detergent on the Tmall platform during the "Double 11" period, and on JD.com, it was the only laundry detergent to make it onto the JD Fine Care Healthy Life Trend List. Strictly speaking, a star product itself cannot constitute a brand's core competitiveness. Product iteration based on demand insight and the ability to continuously launch star products is the true core competitiveness of an enterprise. Continuously combining consumer usage functions, usage scenarios, usage groups, and usage experience, enriching the product structure, and building a category matrix are the external manifestations of innovation. In summary, we can understand why Blue Moon can stand out in a challenging environment. Behind this, it is inseparable from the three moats that Blue Moon has quietly dug deep. ****The harder the times, the more we should follow the leader Frankly speaking, in the past, the growth of our business operations relied more on demographic dividends, economic dividends, and the growth dividends of the industry under population and economy. Industry practitioners often look at the fundamentals of total industry output, evaluating the sustainability of their own business by the level and speed of growth. But when dividends decrease and the economy slows down, what do we look at? In an environment of surplus economy, we should shift from a macro industry economic perspective to a micro enterprise value creation perspective. In a stock market, the value of an enterprise comes from relative competitive advantages, and behind competitive advantages is the level of enterprise operation. The market changes rapidly. Finding certain factors in uncertainty is the essence of investment and operation. Therefore, in the context of overall economic downturn, as practitioners around the industry or direct upstream and downstream partners, the harder the times, the more we should follow the leader. Blue Moon's stable performance in 2021 also verifies that in difficult times, the value of leading enterprises remains. Are you "watching" me?