Pagoda Group’s 2023 Annual Report: Consolidate business foundation and achieve steady performance growth
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In recent years, China’s fruit industry has made great progress and has become an important player in the global fruit market. According to the latest data from Frost & Sullivan, the overall domestic fruit retail market will exceed 1.4 trillion yuan in 2023. The ten-year compound growth rate from 2013 to 2023 will be approximately 8.4%. The trillion-scale market opportunity is huge. On March 28, Pagoda released its 2023 annual performance report. During the reporting period, Pagoda’s annual operating income was 11.39 billion yuan, and net profit attributable to the parent company was 362 million yuan, a year-on-year increase of 11.9%. As for the annual report as a whole, Pagoda, as the leader in the fruit retail market, has achieved steady growth in performance.
Having been deeply involved in the fruit retail industry for more than 20 years, as of the end of 2023, the number of stores has increased by 443 to 6,093 stores. The number of ordinary members of Pagoda has increased by 13.3% to 83.91 million, of which paid Xinxing members have increased by 21% year-on-year to 1.17 million. People, it is worth mentioning that the monthly repurchase rate of its core members is 76%. Pagoda’s membership operation system effectively converts public domain traffic into private domain members through a combination of online and offline methods, and uses corporate WeChat, mini programs and other tools for precision marketing and member management. Through refined management, Pagoda’s online operation model has become an industry benchmark and model.
Since its development, Pagoda has not only made many innovative moves, but its strategic layout is also remarkable. In January 2024, Yu Huiyong, founder and chairman of Pagoda Group, stated at the Golden Ten Year Strategy Conference that it would upgrade its long-standing “delicious” strategy to a “high-quality fruit expert and leader” and hoped that Pagoda would become Consumers’ first choice for high-quality fruits. Against the background of consumption upgrading, Pagoda insists on producing “high-quality” fruits and clearly differentiates itself from the industry characteristics of “high frequency and low price” in the fruit retail market, which is undoubtedly a wise move.
Under the guidance of the new strategy, Pagoda has launched three major campaigns: strategic renewal, leading the way with signature fruits, and developing the gift market. Among them, the gift war has begun to bear fruit. During the Spring Festival of the Year of the Dragon that just passed, from January 21 to February 24 (during the New Year Festival), Pagoda sold a total of 3.46 million fruit gift boxes, with total sales increasing by 39.5% year-on-year. Among them, the one-day gift box sales of Baiguoyuan Hainan Lingshui County Qingshuiwan Avenue store reached nearly 100,000 yuan, ranking first in the store’s single-day gift box sales. In the Mid-Autumn Festival of 2023, the total sales of Pagoda fruit gift boxes were 2.84 million pieces, a year-on-year increase of 94%. It can be seen that consumers have huge market demand for healthy, fresh, and high-quality fruits.
Ensuring quality is the foundation of enterprise development, and Baiguoyuan has made great efforts to this end. Its world’s first “Four Degrees, One Blindness and One Safety” fruit grading system divides fruit grades into four grades: Signature Grade, A Grade, B Grade and C Grade. Signature Grade and A Grade are both symbols of the company’s high quality. Signature Grade Fruits have the advantage of controlling goods and emphasize large differences and high quality, while A-grade fruits focus on the advantages among fruits of the same type. The establishment of standards can allow consumers to understand the quality of fruits more clearly and make purchasing decisions more quickly.
In 2023, Pagoda will fully leverage its advantages in high-quality fruits, with signature and A-grade fruit sales accounting for 66.5%; 6 new category brands will be added, and there are currently 37 category brands, with category brands accounting for 14% of sales. At the same time, new products in small categories were launched to create category differences, and sales also achieved high growth rates. For example, sales of fruit corn increased by 3076% year-on-year, and sales of Golden Venus apples increased by 515% year-on-year.
In addition, Baiguoyuan continues to strengthen upstream control to better guarantee the quality of its fruits. Among them, including but not limited to, Pagoda continues to provide upstream planting suppliers with advanced technologies and practical experience that are more suitable for the development of China’s fruit industry, resulting in an increase in the procurement amount of empowered suppliers to 41%.
In March 2023, Baiguoyuan began to set up a single product general manager, using dedicated personnel to integrate resources, open up the entire link, and improve the efficiency of single product operations. At present, 8 individual product general managers have been set up for different categories to “protect” the company’s high-quality brand effect. In order to develop single products, Pagoda has also actively joined forces with the government. For example, it has carried out in-depth cooperation with the governments of Eryuan County and Maguan County in Yunnan Province to jointly develop the local specialty products purple jade carrot and red ginseng into Pagoda’s category brands. In the process of building the Ziyu Fruit and Carrot brand, Baiguoyuan signed a strategic cooperation agreement with Eryuan County in Yunnan to participate in the establishment of a seedling source base, an industrial demonstration base, an industrial application development base, etc., so that small fruits can grow into a large industry for rural revitalization. .
In the future, with the large-scale growth of the fruit retail industry, Pagoda will continue to deepen its leadership position as a fruit chain enterprise, focus on key businesses with long-term thinking and forward-looking strategic layout, and at the same time actively practice Corporate social responsibility, do our part for rural revitalization, and do our part to meet the needs of citizens for a better life.
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