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In China, there are few domestic companies that can compete with international daily chemical giants, and Blue Moon is one of them.

In late August, Blue Moon announced its performance report for the first half of 2022. After winning the dual championship in the comprehensive market share of laundry detergent and hand sanitizer, Blue Moon's revenue performance reached a new high. According to the report, by the first half of the year, Blue Moon achieved a revenue of 2.8835 billion Hong Kong dollars, with a gross profit margin as high as 53%. That is to say, for a bottle of laundry detergent priced at 9.9 yuan, Blue Moon can earn a profit of more than 5 yuan. In terms of market share, Blue Moon also leads a group of domestic brands and firmly controls the dominant position in the local cleaning market.

According to the statistical data of the first half of 2022, in the total track of the cleaning market, Blue Moon, with a market share of 13%, defeated the brand Omo under Unilever and once again won the championship of market share; in the sub-track of laundry detergent, Blue Moon even accounted for 16%, exceeding the total retail sales of the two major cleaning brands of Procter & Gamble, Tide and Gain.

Both praised and popular, how can Blue Moon, which was established only 30 years ago, defeat foreign giants with a century of history? This is all thanks to the "paradox" of Zhang Lei of Hillhouse Capital at that time.

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I. Early setbacks: foresight is not as good as habit

In 1992, Luo Qiuping founded Blue Moon and set the development route of liquid cleaning agents from the beginning. It can be said that in terms of product positioning, Blue Moon was nearly 20 years ahead of domestic peers, but its road of liquid cleaning was full of twists and turns.

In the first 10 years of entrepreneurship, Blue Moon first launched the first domestic spray-type liquid detergent, and then focused on kitchen cleaning, launching a variety of kitchen utensil cleaners, but the response was mediocre. In 2002, when SARS broke out, in order to avoid "cross-infection with shared soap", the antibacterial hand sanitizer independently developed by Blue Moon finally became popular due to its pressurized design.

However, the good times didn't last long. With the disappearance of SARS, people returned to the soap products they were used to, and hand sanitizer became a "backup" again.

At this time, it was another critical moment for Blue Moon's survival.

In the early days, in order to pursue decontamination effects, the formulas of laundry powders basically all added varying proportions of alkaline proteases. Alkaline proteases can hydrolyze peptide chains in protein molecules, making them separate from clothes, and have excellent degreasing performance.However, the hydrolytic effect of alkaline protease is indiscriminate, dissolving not only the grease on clothes but also damaging the proteins in human skin. Therefore, after using laundry detergent to rub clothes for a long time, we always feel an unbearable itchy and burning sensation on the palms of our hands, whereas laundry detergent does not cause such discomfort.

The stain removal capability of laundry detergent primarily stems from surfactants composed of substances such as sodium dodecylbenzenesulfonate and fatty alcohol ethoxylate sulfate, which have a neutral chemical nature and do not irritate the skin of the hands. Moreover, its unique long-chain structure allows for a more uniform dissolution of grease.

Thus, the replacement of laundry detergent by laundry detergent is an inevitable trend. Luo Qiuping saw this and began to heavily invest in the laundry detergent market.

II. The underlying logic behind "No Loss, No Investment"

In 2008, the Blue Moon Deep Clean Laundry Detergent, which was marketed as "not hurting hands," was launched. Riding the economic wave of the Beijing Olympics and with the personal recommendation of the diving queen Guo Jingjing, Blue Moon became an instant hit. By 2009, the once "domestic small factory" Blue Moon had knocked off the overseas cleaning giants that had dominated the list for many years, becoming the absolute leader in the cleaning field with a market share of 32.7%.

Luo Qiuping single-handedly brought the Chinese laundry market into the "liquid" era. At this time, Blue Moon also attracted the attention of a capital tycoon. Zhang Lei from High Age Capital graduated from Yale University and earned his first pot of gold after investing in Tencent upon returning to China. In 2019, he became famous for reorganizing Gree's equity structure with Dong Mingzhu. What many people do not know is that when Zhang Lei was preparing to invest in Blue Moon, he made a strange request to Luo Qiuping: "Blue Moon should be prepared for a long-term non-profit."

Investing not for profit, what was Zhang Lei considering? In his book "Value," which he wrote himself, he revealed the underlying logic behind "being prepared for long-term non-profit":

1. Consumption upgrade, misjudgment by foreign enterprises

Around 2008, the trend of domestic consumption upgrade was obvious. Reflected in the laundry field, the successful trial of Blue Moon fully demonstrated that the laundry detergent products, which accounted for 80% of the market in Western countries, had entered a critical time for domestic replacement.

During this period, well-known foreign enterprises such as Unilever and Procter & Gamble were desperately working in the wrong direction of upgrading laundry detergent, completely ignoring the potential demand for mid-to-high-end laundry detergent in the Chinese market. In Zhang Lei's view, this was an excellent opportunity for domestic brands to counterattack overseas famous enterprises!2. Seizing Opportunities: Quick Fish Eat Slow Fish

"Quick fish eat slow fish" - speed is one aspect, but how to "eat" also matters.

On the path of transformation for Blue Moon, it is necessary not only to capture all segments of the laundry detergent market but also to withstand the continuous counterattacks from international giants. Without investment in research and development and supporting marketing, it is absolutely insufficient.

Therefore, when meeting with Luo Qiuping, Zhang Lei emphasized extra: the strategy formulation for Blue Moon should not focus solely on short-term profits but should look more at long-term value.

After obtaining investment from Hillhouse, Blue Moon indeed followed Zhang Lei's advice, with paper profits plummeting, but it became the enterprise with the strongest laundry detergent R&D strength in China.

III. Conclusion

Today's Blue Moon has an independent laundry detergent R&D technology center, focusing on developing laundry detergent products that fit domestic laundry habits. As of 2021, Blue Moon has accumulated as many as 220 product technology patents, making it the only laundry detergent brand in China that is fully laid out and leading in high, middle, and low-end segments.

Among them, the 9.9 yuan specification promotional package has long dominated the cleaning and care section of major e-commerce platforms, and the innovative pump bottle concentrated laundry detergent launched in the past two years has also, with a 27.9% market share, once again surpassed Procter & Gamble (26.8%), representing domestic brands to defend the high-end position in the cleaning and care field.

Facts have proven that focusing on long-term core technology is the right choice for the rise of national brands! This is true for Dong Mingzhu, Zhang Lei, and even more so for Luo Qiuping of Blue Moon.