The globally renowned down jacket brand Bosideng is demonstrating strong business resilience.
On June 26th, Bosideng (3998.HK) released its annual report for the fiscal year 24/25 (ending March 31, 2025). The report shows that revenue increased by 11.6% to approximately 25.902 billion yuan, achieving the development goal of steady progress. The profit attributable to equity shareholders of the group rose by 14.3% to approximately RMB 3.514 billion, both setting new historical highs for the same period for eight consecutive years.
What is even more worth mentioning is that for eight consecutive years, the growth rate of the group's net profit has been faster than that of its revenue, demonstrating outstanding business quality.
Behind the outstanding performance lies the continuous upgrading of Bosideng's brand effect and supply chain capabilities empowered by technology. The upsurge of outdoor sports in China has also brought new incremental markets to traditional down jacket brands.
Technology empowers the improvement of business quality
The winter of 2024-2025 will not be an easy one for the down jacket industry.
Data shows that this winter is the warmest in China since 1961. In November 2024, the national average temperature was 2.0℃ higher than the normal level.
November is precisely the most crucial time for down jacket sales. A warm winter will naturally have an adverse impact on the industry. The pressure on the global macroeconomy is also bound to be transmitted to the consumer market.
According to the financial report data, despite the challenges of weather and consumption environment, Bosideng's inventory still remains at a healthy level. The inventory turnover days rose slightly by 3 days to 118 days.
Overall, however, Bosideng's performance remains outstanding, with its operating margin rising from 18.9% last year to 19.2% this year.
Bosideng's strong resilience stems from the dual enhancement of brand effect and supply chain management capabilities empowered by technology.
Since the implementation of the new national standard for down jackets in 2022, the original "down content" indicator has been replaced by "down sub-content", and the down filaments that do not enhance warmth have been excluded. Coupled with the optimization of other indicators, this has stimulated the competitive vitality of the market and provided consumers with more high-quality and high-performance down jacket options. Bosideng seized the opportunity and strengthened its brand effect through continuous product innovation. For instance, the "Summit Series" has a fluffiness of 1000, a pile content of 95%, and adopts the aerogel nano-insulation material of the Long March 5.
In the fiscal year 24/25, the revenue of Bosideng's main brand continued to steadily increase by 10.1% to approximately 18.481 billion yuan, setting a new record high for the same period. The revenue of the Xuezhongfei brand was approximately 2.206 billion yuan, representing a year-on-year growth of 9.2%.
In addition to making efforts in brand building, Bosideng is also strengthening its hard power in supply chain management. As an industry with distinct peak and off-peak seasons, inventory management has always been an important factor affecting the profitability of the down jacket industry. To this end, Bosideng has strengthened its supply chain's pull-based replenishment and small-order quick response capabilities.
Pull-based replenishment is an inventory management strategy based on demand pull. Its core is to initiate the replenishment process based on actual customer demand or sales orders, rather than relying on pre-determined demand forecasts.
Unlike the traditional clothing brand model that relies on order fairs, Bosideng only produces up to 40% of the futures orders after the order fair. Once the new products are launched, it then relies on its digital capabilities of "Internet + big data + intelligent manufacturing" to place rolling orders. With high-quality and rapid response supply, it completes the remaining market orders and realizes a production model of small batch and rapid response.
As a result, Bosideng's inventory turnover days have dropped from 175 days in the fiscal year 2021 to 115 days in the fiscal year 2024. Even in the warm winter of the fiscal year 2025, it still demonstrated strong resilience.
The outdoor trend brings about vast Spaces
The "outdoor craze" and "ice and snow craze" that have emerged in China in recent years have brought new growth space to down jacket enterprises.
According to a report by the General Administration of Sport of China, outdoor sports in China have gradually become popular among the general public. In 2023, the number of orders related to outdoor sports increased by 14.99%, and in the first half of 2024, the number of orders related to outdoor sports increased by 59.78% year-on-year.
After the Beijing Winter Olympics, the number of people participating in winter sports in China rose from less than 100 million in 2015 to 313 million in 2022.
During the 2023-2024 snow season, the consumption scale of winter sports exceeded 150 billion yuan, among which functional clothing such as ski suits and ski gloves became core consumption items. Take the down jacket as an example. In 2023, the sales volume on the JD.com platform exceeded 1.4 million pieces, with a sales revenue of 940 million yuan, increasing by 89% and 96% respectively year-on-year. The overall transaction volume of the skiing industry on Tmall increased by 40%, and the growth rate of the skiing glove category reached 50% to 60%.
Bosideng also took the opportunity to enter the outdoor and ice and snow markets. In 2024, Bosideng launched a brand-new series of down jackets, which strike a balance between fashion and functional protection. They feature "water repellency, wind resistance, moisture permeability and breathability", making them light protective functional outerwear suitable for urban and outdoor use. Bosideng has also reached a strategic cooperation with Harbin, launching the "Erbin × Bosideng" co-branded series of down jackets, pioneering a new model of collaboration between cities and brands.
The Xuezhongfei brand under Bosideng has also delved deeply into its "ice and snow" genes. In 2024, it launched a new snow and wind series, collaborating with Guangzhou Inspection to introduce innovative "anti-snow and wind" standards and create a brand-new snow and wind wall system structure, achieving multiple functions such as wind resistance, water resistance, heat preservation, far-infrared heating, and snow and wind protection and warmth preservation.
The layout of outdoor and ice and snow tracks not only opens up a brand-new growth space for down jacket enterprises, but also the highly young and high-income characteristics of users in this market bring an excellent opportunity for traditional clothing brands to continue upgrading their brand image.
If Bosideng can seize the outdoor trend well, it is bound to reach a new level.
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