---
title: "What Kind of Mess Did Lin Xiaohai Inherit at Shanghai Jahwa?"
description: "Shanghai Jahwa, once the undisputed leader in domestic beauty and personal care, has recently undergone major personnel changes, with former RT-Mart CEO Lin Xiaohai taking the helm. Despite the company's 125-year history and iconic brands like Herborist, Liushen, and Shuangmei, its latest half-year report reveals declining revenue and profit, a shrinking market position, and a host of challenges including an unclear brand structure, lack of blockbuster products, and lagging channel innovation."
author: "李彦"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2024-09-30"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/what-kind-of-mess-did-lin-xiaohai-inherit-at-shanghai-jahwa-8d08c188/"
markdown: "https://xinjignxiao.com/en/articles/what-kind-of-mess-did-lin-xiaohai-inherit-at-shanghai-jahwa-8d08c188.md"
original_source: "https://mp.weixin.qq.com/s/gX8OaSI0OUOIlSh9QOdD_A"
translation: "https://xinjignxiao.com/zh/articles/%E4%B8%8A%E6%B5%B7%E5%AE%B6%E5%8C%96-%E7%BB%99%E6%9E%97%E5%B0%8F%E6%B5%B7%E7%95%99%E4%B8%8B%E4%BA%86%E4%BB%80%E4%B9%88%E6%A0%B7%E7%9A%84%E6%91%8A%E5%AD%90-8d08c188.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/what-kind-of-mess-did-lin-xiaohai-inherit-at-shanghai-jahwa-8d08c188/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# What Kind of Mess Did Lin Xiaohai Inherit at Shanghai Jahwa?

> Shanghai Jahwa, once the undisputed leader in domestic beauty and personal care, has recently undergone major personnel changes, with former RT-Mart CEO Lin Xiaohai taking the helm. Despite the company's 125-year history and iconic brands like Herborist, Liushen, and Shuangmei, its latest half-year report reveals declining revenue and profit, a shrinking market position, and a host of challenges including an unclear brand structure, lack of blockbuster products, and lagging channel innovation.

If there was ever a veteran leader in domestic beauty and personal care, it was undoubtedly Shanghai Jahwa.
As a company with a 125-year history, Shanghai Jahwa owns many well-known brands, such as Herborist, Liushen, and Shuangmei.
Recently, Shanghai Jahwa underwent significant personnel changes. Lin Xiaohai, former CEO of RT-Mart, has become the top leader at Shanghai Jahwa.
Lin Xiaohai has deep experience in the FMCG and retail industries, having held positions at Procter & Gamble (President of Marketing, Greater China), Alibaba Group Holding Limited (Vice President and General Manager of Retail Connect), and RT-Mart (Executive Director and CEO). He brings both rich operational experience in the daily chemical market and insights from Alibaba's offline retail transformation. However, this is the first time Lin Xiaohai has simultaneously served as both CEO and Chairman. Shanghai Jahwa has given Lin Xiaohai immense trust and authority.
So, what kind of Shanghai Jahwa has Lin Xiaohai taken over, and what situation does he face? Recently, Shanghai Jahwa released its half-year report. While the data in this report has no direct bearing on Lin Xiaohai's performance, it clearly reflects the challenges he now faces.
The author has observed that Shanghai Jahwa's position in the beauty and personal care industry is precarious, leaving Lin Xiaohai with a considerable mess to clean up.
**Market Downturn**
**Intensified Competition in a Stagnant Market**
Competing with peers in a stagnant market during an industry-wide downturn is the first mess Lin Xiaohai faces.
From the half-year reports of various companies, it is clear that the intense competition in the beauty industry has not hindered the performance of top players. Except for Shanghai Jahwa, almost all listed beauty and personal care companies maintained positive year-on-year growth in revenue and net profit in the first half of this year. Among them, Shanghai SMI Group achieved triple-digit growth in both revenue and net profit, while Proya, Giant Biogene, and Marubi all saw double-digit growth in both metrics.
In contrast, Shanghai Jahwa, the oldest personal care and beauty group in China, saw a sharp decline in both revenue and net profit, which stands out starkly.
After Proya first surpassed Shanghai Jahwa in revenue in the first three quarters of 2023 with 5.249 billion yuan, becoming the leading domestic beauty company, Shanghai SMI also overtook Shanghai Jahwa in the first half of this year. Given current growth rates, it is only a matter of time before Betaine and Giant Biogene surpass Shanghai Jahwa as well.
The "rise of domestic beauty brands" was once used to describe many of Shanghai Jahwa's brands, including Herborist and Shuangmei, in a previous era. In recent years, this term has been repeatedly mentioned, but it now reflects a more fragmented reality: **the number of rising domestic beauty brands can be counted on two hands, while countless others have failed or declined, lost in market competition.**
The industry "winter" intensified in the first half of this year, with the beauty industry overall underperforming the consumer retail market. According to data from the National Bureau of Statistics, total retail sales of consumer goods in the first half of 2024 reached 23.5969 trillion yuan, a year-on-year increase of 3.7%. Among them, total cosmetics retail sales were 216.8 billion yuan, a year-on-year increase of only 1.0%.
National Bureau of Statistics data also shows that the 1% year-on-year sales growth in the first six months of 2024 was only higher than the special years of 2020 and 2022. In June alone, cosmetics retail sales totaled 40.5 billion yuan, a year-on-year decrease of 14.6%, marking the lowest level for the same period in nearly a decade.
We see that the stagnant market competition in the beauty industry has not only eliminated small and medium-sized brands but also affected some long-established major brands.
On one hand, a group of foreign beauty brands have been unable to sustain their full-scale competition and have withdrawn from the Chinese market, including Shiseido's high-end brand BAUM, French high-end makeup brand BY TERRY, and Kose Corporation, one of Japan's three major beauty groups. On the other hand, the competition among domestic brands has taken on a new dynamic: new domestic brands are rising, while old domestic brands are seeing their market share eroded.
Shanghai Jahwa is undoubtedly one of the most representative old domestic brands. As mentioned at the beginning of this article, Shanghai Jahwa is facing pressure from new leading domestic brands such as Proya and HANSHU. Under this external threat, Shanghai Jahwa's previous competitive strategies have proven unsuccessful. Reflecting this in the capital market, Shanghai Jahwa's stock price has fallen from nearly 60 yuan in 2021 to the current 14.42 yuan, with its market value evaporating by over 75%.
After Shanghai Jahwa, at its lowest stock price in a decade, was handed over to Lin Xiaohai, he discovered the second mess left behind: **an unclear brand structure and a complex product matrix without focus.**
**Lack of "Cash Cow" Hero Products**
After reviewing the brands of various companies, the author found that compared to its peers, Shanghai Jahwa has a rich brand matrix but **lacks "cash cow" hero products.**
Shanghai Jahwa currently has three business divisions and dozens of brands. These include Liushen and Maxam under the Personal Care Division; Dr. Yu, Herborist, Diancui, and Shuangmei under the Beauty Division; and Chuyan, Jiaan, and GF under the Innovation Division. All these brands generated 3.321 billion yuan in revenue in the second quarter. Among them, the Personal Care Division contributed the most revenue, accounting for 47.82% of the group's total.
Liushen and Maxam were established in 1990 and 1912, respectively, making them among the oldest brands under Shanghai Jahwa, yet they still generate the most revenue for the group. At the same time, despite the brand equity still being strong, Shanghai Jahwa has failed to produce a leading "hero product."
**In comparison, the brand portfolios of Proya, Giant Biogene, and Shanghai SMI, which performed better in the second quarter, are more focused and refined:**
Proya has four main brands: its namesake skincare brand Proya, makeup brand Caitang, and hair care brand Off&Relax, which together contribute nearly 95% of the group's revenue.
Giant Biogene has two main brands: Comfee and Kligan. The former has carved out a market with its recombinant collagen concept, contributing 81.5% of Giant Biogene's revenue, while the latter, based on the same concept, supplements the product line with an anti-aging focus, contributing 15.6% of the group's revenue.
Shanghai SMI has three main brands. The primary revenue generator is HANSHU, which has ridden the wave of short dramas in recent years. HANSHU is positioned as a scientific anti-aging brand and accounts for 83.6% of the group's total revenue. Additionally, One Leaf, a skincare brand for young users, and Little Dream Garden, for baby and child skin, contribute 3.5% and 5.0% of the group's revenue, respectively.
Looking at the gross margins of these companies, we can summarize the "secret" to their profitability: **focused marketing, strengthening the concept of a few brands, and creating "cash cow" hero products.**
**Lin Xiaohai offered his own understanding of this "mess" at the performance briefing: "People see Shanghai Jahwa's business declining and might think it's due to poor e-commerce channels, but in my view, it's not a channel issue; it's a brand power issue. The target user value of the brand is unclear."**
He then redefined brand priorities: The first tier includes Liushen from the Personal Care Division and Dr. Yu from the Beauty Division. Liushen targets the mass market, deepening its "cooling" assets; Dr. Yu focuses on sensitive skin and post-medical aesthetics consumers, aiming to become a leader in these niche segments. The second tier includes Herborist and Maxam, which will strive to become "value-for-money" brands in their scale segments. Other brands are grouped into the third tier.
It can be inferred that after prioritizing brands, marketing resources will be reallocated, and product concepts may become clearer. However, whether brand equity can be further unleashed depends on solving the pain point of brand aging.
**Channel Innovation Lagging Behind**
Brand aging is the third mess Lin Xiaohai faces.
Shanghai Jahwa's brand aging is reflected in two ways: difficulty in acquiring new customers and the loss of existing customers.
On the customer acquisition front, Shanghai Jahwa's latest financial report describes the risks it faces: the risk that marketing investments cannot keep up with rapid market changes and the rapid increase in customer acquisition costs.
On the repurchase front, comparing recent financial data, from mid-2022 to mid-2023, the number of current customers for its Herborist brand was 1.1063 million, a year-on-year decrease of 29.49%; the number of repeat customers was 557,000, a year-on-year decrease of 15.09%. For the Dr. Yu brand, the number of current customers was 2.0801 million, a year-on-year decrease of 33.61%; the number of repeat customers was 1.0168 million, a year-on-year decrease of 24.56%.
Why is Shanghai Jahwa's brand aging so evident? Although Lin Xiaohai believes the key is not the channel, the author believes that **Shanghai Jahwa, which has long been strong offline, has failed to keep up with channel innovation, exacerbating brand aging and potentially suppressing brand equity.**
As of the end of 2023, Shanghai Jahwa's main business revenue from online and offline channels accounted for 42.66% and 57.34%, respectively. In the same year, Proya's online channel revenue accounted for 93.07% of its main business revenue; Shanghai SMI's online channel revenue accounted for 85.6%.
Online sales of cosmetics have replaced traditional supermarket sales as the primary channel for cosmetics in China. According to data from China Commercial Industry Research Institute, in 2023, the top three sales channels for the skincare industry were e-commerce, department stores, and professional beauty stores, accounting for 41.3%, 21.1%, and 16.0%, respectively. Since last year, the integration of short dramas and short videos on content e-commerce platforms has opened new growth opportunities for beauty brands, including HANSHU.
**Changes in consumer purchasing habits, shifting from offline to online and from shelf selection to content-driven decisions, require brands to reshape their business logic and innovate their channels.**
In the words of Shanghai Jahwa's former CEO Pan Qiusheng, "A brand with hundreds of SKUs can fill shelves, which is a competitive tactic for occupying offline physical space. But online, the logic is reversed; it needs to be driven by hero products."
Compared to Shanghai Jahwa, which started offline, brands like Proya and HANSHU, which capitalized on online channel dividends, are better at riding traffic trends and their interest e-commerce strategies align more with modern consumer purchasing habits. This has caused Shanghai Jahwa's online layout to always seem a step behind.
Take the incremental growth brought by short dramas to peers as an example. In 2023, HANSHU generated 3 billion yuan in revenue through customized short dramas. Subsequently, Proya and Marubi quickly responded, producing several short dramas within half a year to keep up with the trend, but Shanghai Jahwa's brands have yet to take similar action. Despite repeatedly emphasizing the need to continue focusing on content e-commerce in press conferences and financial reports, the results have not been impressive.
**Can Lin Xiaohai Save Shanghai Jahwa?**
So, can Lin Xiaohai save Shanghai Jahwa from this mess?
Before Lin Xiaohai, including Pan Qiusheng, who came from L'Oréal, Shanghai Jahwa's CEOs mostly came from well-known domestic and international daily chemical companies. They had rich experience and impressive resumes, but ultimately failed to restore Shanghai Jahwa to its former glory.
The CEO position at Shanghai Jahwa has been jokingly called "the hardest job in China's cosmetics market." Multiple brand strategy adjustments and channel innovations have failed to reverse the group's decline. Clearly, Shanghai Jahwa needs a comprehensive transformation.
Therefore, Lin Xiaohai has initiated bold reforms, including comprehensive personnel adjustments.
For example, Ye Wei, former CMO of Proya, has become an external brand marketing consultant for Shanghai Jahwa. Shanghai Jahwa also announced changes in several core management positions, including new appointments for the General Manager of the Beauty Division (Chen Min), the General Manager of the Innovation Division (Qian Wei), and the Brand Director of Dr. Yu (Xu Xin).
It is worth noting that Lin Xiaohai stated that the new executives he brought in are "people I know well" and "first-class talents from first-class companies."
Regarding the company's future development vision, Lin Xiaohai outlined two goals: the basic goal is to grow faster than the market, with low single-digit growth, "1% higher than the market growth rate"; the higher goal is to benchmark against industry leaders and achieve "double-digit growth."
We see that after taking office, Lin Xiaohai has restructured Shanghai Jahwa's old pattern by focusing on both brand layout and personnel adjustments. However, to achieve double-digit growth, more innovative breakthroughs will be necessary.
The past financial reports are only a snapshot of Shanghai Jahwa's performance. Starting from the second half of the year, Shanghai Jahwa has officially entered the "Lin Xiaohai era." It is often said that it is difficult to turn a large ship around. Whether Shanghai Jahwa can reverse its decline in the next financial report remains to be seen.


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671