Is it still a good business?, Camping brand gradually abandoned by Xiaohongshu | Equipment | Camping
As a seasoned player, Zheng Feni once firmly believed that camping would quickly become popular in China.
In 2016, Zheng Feni joined the Chinese camping equipment brand Vidalido. For a long time afterwards, the slow popularity of camping in China puzzled her: even with such a large market space, such good tourism resources, and such strong consumption power, why is camping still so niche? Zheng Feini never expected that her judgment would be fulfilled in such a dramatic way a few years later. The COVID-19 unexpectedly brought fire to camp, which sent this small hobby to the top of the consumption field. The camping was suddenly very hot. Looking back now, Zheng Feini sighed, "Back then, it was unbelievably slow, now it's unbelievably fast."
Quickly expanding the camping market cake has attracted a large number of players who are interested in taking a share of it. There are over 100000 camping related enterprises in China. Among them, the registration volume reached 10700 in 2020, 23000 in 2021, and 35400 in 2022. Even though the impact of the epidemic has faded, camping is still very popular - in the first quarter of 2023, the registered number of camping related enterprises in China reached 13100, a year-on-year increase of 137.69% compared to the same period in 2022.
However, a series of severe realities have been put on the table. The interest in camping on social media is gradually fading, the profits of top camping equipment manufacturing companies are significantly declining, and the camping site industry has not yet explored an effective profit path... All of these are leading to the same problem:
Camping, is it still a good business?
A model room built in a camping equipment store. Yu Liangzhao
Explosive growth in the past three years
From the moon chair to the Chicken rolls table, from the moisture-proof mat to the fire table, from the Indian tent to the hexagonal sky curtain, these once unknown and even unheard of goods have frequently appeared in the shopping carts of domestic consumers in the past few years. For the vast majority of novice players who have just entered the pit, a camping trip does not start from leaving their homes, but from holding their phones and browsing Taobao to select camping equipment.
As a result, a group of equipment manufacturing enterprises have become the biggest winners in this round of camping fever in China. When talking about sales performance in the past few years, especially in 2020 and 2021, the term "explosive growth" is frequently mentioned by respondents.
The camping equipment industry in the Yangtze River Delta region started very early. As early as the 1980s, factories in Taizhou, Zhejiang and Ningbo took on foreign trade contract orders and attempted to produce outdoor sunshade umbrellas. Taking this as an opportunity, these companies gradually extended their product lines to camping equipment such as tents, becoming suppliers of many internationally renowned outdoor brands. Entering the 21st century, hiking has emerged in China. The emergence of the "donkey enthusiast" group has given rise to the domestic camping equipment market, and local camping equipment brands represented by Huofeng, headquartered in Hangzhou, Zhejiang, have begun to emerge. The older generation of companies that started making sunshade umbrellas and tents at that time, although they also had some involvement in the booming domestic market at that time, most of them just tasted it, and most of their energy was still focused on foreign trade. Overseas OEM business is still the main source of income for these companies to this day.
In 2017, Ningbo enterprise Mugaodi was listed on the A-share market. This camping equipment manufacturing company, founded in 2003, has performed mediocrely since going public, especially in the domestic market where it has not made much progress. The proportion of export revenue of Mugao Di has been around 70% for a long time. Since 2020, the domestic sales channels of Mugao Di have suddenly accelerated. In the first half of 2021 alone, the revenue of domestic sales channels reached 123 million yuan, equivalent to the sum of 2018 and 2019, a significant increase of 86.53%. Last August, the stock price of Mugaodi rose to 112.94 yuan/share, highlighting the moment. In the past three years, the revenue of Mugaodi was 640 million yuan, 920 million yuan, and 1.436 billion yuan respectively, and the net profit increased from 50.05 million yuan in 2017 to 140 million yuan in 2022. According to the 2022 financial report of Mugao Di, its independent brand business benefited from the explosive growth of domestic outdoor camping, achieving a revenue of 705 million yuan, a year-on-year increase of 130.50%.
Another Ningbo enterprise transferred customers and completed the first round of financing of nearly 100 million yuan in April last year. Founded in 2010, Noke has been mainly engaged in overseas markets. In this round of camping frenzy, the performance of Noah's customers who have returned to the domestic market is impressive, and they have quickly gained popularity among domestic consumers. The membership camping equipment store it invested in has opened multiple physical stores in Ningbo, Shanghai, and other places since 2021. The first store located in Beilun, Ningbo has a business area of 14000 square meters and has become a check-in point for camping enthusiasts.
It is not only big companies that have achieved explosive growth, but also small brands like workshops have benefited from it. Due to the relatively small base size, this high growth is more evident in small brands. A business executive jokingly said that doubling performance can only be considered as a starting point, and doubling a few times is the problem.
Cao Ye, who runs a machinery factory in Changshu, Jiangsu, is a veteran camping player. In 2015, he registered and established his own brand Quanhui Production Institute, specializing in the design and production of various iron outdoor cookware and camping equipment accessories. Although the product has a good reputation among the core player group, in Cao Ye's view, his business is just a side business driven by interests, with a very small volume. In 2022, the sales revenue of Quanhui Production still reached around 3 million, and Cao Ye admitted that this number was "unimaginable" in the past.
"Even if I do make money, I still have to say that such growth is obviously too crazy," Cao Ye said.
Various camping equipment. Yu Liangzhao
When the curtain factory started making tents
In recent years, camping has gradually been described as a business that can make money while lying down, and many newcomers have jumped into this trend without hesitation. Cao Ye told reporters that in the past three years, many people around him have turned to camping equipment production. Cao Ye stated that the technical content of conventional camping equipment such as tents, folding tables and chairs is limited. If we do not pursue design and materials, it is easy for the Yangtze River Delta factories, which have strong manufacturing capabilities and rely on a complete industrial chain, to develop several assembly lines to produce camping equipment. Even factories that used to struggle with camping can complete transformation in a very short amount of time with drawings and even samples. "When companies producing curtains start making tents, it's not hard to imagine how fanatical the industry has become." Zheng Feini repeatedly emphasized to reporters that curtain factories making tents is not a joke, but a real thing that happened last year.
Outsiders have flooded in, and a large number of small brands and even miscellaneous brands have sprung up like mushrooms after rain. Due to the lack of independent research and development capabilities, the production line with full horsepower has launched a massive amount of highly homogeneous products into the market, and the industry is undoubtedly being led inward. Price wars have become the main means of competition. For example, as a classic product in camping equipment, Kemet chairs produced by domestic professional brands were usually priced around 200 yuan. However, now when searching for "Kemet chairs" on e-commerce platforms, the majority of products are priced at just a few tens of yuan.
"Of course, veteran players know that the 30 yuan and 200 yuan Kemmit chairs cannot be the same thing. However, for consumers who have just started camping, facing such a huge price difference, they will only be filled with question marks. Although Cao Ye does not believe that such a market pattern is destined to drive bad coins out of good ones, the price war sparked by outsiders has indeed brought considerable pressure to insiders.".
At the same time, the low threshold of the camping equipment industry means that once a manufacturing enterprise with strong capabilities steps down, it can be hit by cost reduction. The Primitive brand, which was only established in 2021, is an example. This enterprise, born in Yongkang, Zhejiang, the hardware industry cluster belt of the Yangtze River Delta, was originally engaged in barbecue grills and other barbecue utensils. After switching to camping equipment, in just one year, the primitive people seized a large market share with their low-priced strategy. Their automatic tents sold nearly 200000 units on e-commerce platforms, with an average daily sales of about 500 units. During last year's 618 promotion, the sales of e-commerce channels once surpassed many industry veterans such as Mugao Di.
Unlike highly segmented overseas markets, domestic camping equipment brands with a certain volume tend to have a full category strategy. With the brutal expansion of top players, companies that used to enjoy the tranquility of time on niche tracks have also truly felt the shadow gradually covering their heads.
BOTEBoards, a paddle equipment manufacturing enterprise in Taizhou, Zhejiang, was established in 2009 and has been deeply involved in the European and American markets for many years. It was not until 2018 that it entered the domestic market. Along with the camping craze, paddleboarding, a niche water sport, has also become popular. According to He Detao, the head of the domestic market for BOTEBoards, the company's domestic sales have grown significantly, with consecutive doubling in 2021 and 2022. In the future, it will consider further expanding its domestic market. However, at the 9th Asian Sporting Goods and Fashion Exhibition, which just ended in Shanghai in early July, He Detao was surprised to find that domestic big brands such as Mugao Di and Primitive Man exhibited their own paddle board products, almost all of which were aimed at the mid to low end entry-level market. "Although the actions of these large companies may only be exploratory, it is still unknown whether they will continue to make efforts in this niche field in the future. This year will be a crucial year, and whether they can withstand pressure may determine the survival of the enterprise in the domestic market in the future," He Detao said.
A campsite in the suburbs of Shanghai. Yu Liangzhao
Campsite used for holding press conferences
When playing camping, always find a place to set up the tent and canopy in the trunk of the car. Camping sites themselves have become another popular business around camping, in addition to equipment manufacturing.
The Yangtze River Delta, which is rich in tourism resources, will naturally not be absent from this camping boom, and the "tent economy" has been included in many local government work reports. Huzhou, Zhejiang Province, has shouted the slogan of building a camping paradise in the Yangtze River Delta, surpassing first tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen with 212 camping sites, ranking second in the country. As for the small scale campsites not included in the statistics, they are blooming everywhere in Huzhou.
In 2022, Zhang Zhixi and his partner returned to their hometown to start a business and rented 50 acres of idle wasteland in their hometown of Zhangcun Town, Anji, Zhejiang, to build the Mutianyu Camping Base. The location of Mutianyu was originally a terraced field, with a well arranged terrain and a natural water system running through it. In addition, the surrounding large bamboo forests provide a unique environment. Zhang Zhixi himself is also a camping player, so he is very particular about the construction of the campsite. Inside the campsite, there are all kinds of basic facilities such as mobile toilets and showers. Among the 33 campsites, there are both tent hotels that can be accommodated with bags and areas for self construction.
Mutianyu opened at the end of 2022 and has been operating for half a year, making it difficult for Zhang Zhixi to attract customers. Although almost all of the campsites during this year's May Day and Dragon Boat Festival holidays have been sold out, the booking situation for non holiday bookings has always been quite bleak, with orders on weekdays repeatedly missing. Mutianyu is located at the foot of Longwang Mountain, the highest peak in northern Zhejiang. River valley rafting is a popular tourism product in the local area. After the start of this summer's rafting project, the driving force for the campsite's business is still limited. The campsite's deployment on online tourism service platforms such as Ctrip has resulted in high views and low orders.
The construction period is nearly 8 months, with a total investment of over 4 million yuan. Zhang Zhixi admitted that running a campsite is not a business that can make quick money. He believes that compared to traditional tourism and accommodation formats such as hotels and homestays, campsites require more traffic support: "It may not necessarily be necessary to become internet celebrities, but it is necessary to have traffic to allow more people to see and know in order to make business possible."
With the rapid recovery of the domestic tourism industry after the end of the epidemic, audiences on social media, represented by Xiaohongshu, are gradually losing interest in camping. Camps that were mass-produced in a short period of time have further diluted the already small amount of traffic, failing to receive the favor of traffic, and becoming the number one cause of death for newly opened campsites.
On the other hand, the thriving campsite business has yet to explore practical and feasible monetization paths and profit models. At this point, even top brands are no exception. The internet famous camping base brand Da Re Wilderness, invested by Mu Gaodi, had a revenue of 10.96 million yuan from January to October 2021, a net profit of 102100 yuan, and a net profit margin of only 1%.
In addition to providing venues for players to set up tents and light bonfires, camping sites in China generally lack content and service filling, and campsite business often evolves into venue rental business.
Xiaojia is a partner of a campsite in Qingpu District, Shanghai. Her camp is located at the junction of Shanghai, Jiangsu and Zhejiang, with beautiful scenery and convenient transportation. It is only an hour's drive from the central urban area of Shanghai center. However, Xiaojia also faces the same problem as Zhang Zhixi. The phenomenon of passenger flow tides is obvious, and there are often only a few tents in the over 4000 square meter campsite outside of holidays, so most of the time, the campsite can only be used for Xiaojia and her friends to entertain themselves.
Providing venues for corporate team building and brand launch events has been the main source of income for Xiaojia's camp in the past two years. Although there are quite a few orders of this kind and the individual income can be considerable, putting the cart before the horse still inevitably makes Xiaojia feel self doubt: "Sometimes I wonder, are we still in the camping business? Moreover, if we only provide venues, do we still need the participation of camping sites?"
The reservation mini program for a certain campsite in Shanghai shows a dismal situation of booking campsites. Network screenshot
Is camping really that popular
As traffic begins to decline, the rapidly maturing camping industry urgently needs to return to rationality.
Mu Gaodi, who has been making great strides, has suffered consecutive setbacks this year. Not only has its stock price hit a new low, but its net profit for the first quarter of 2023 also showed negative growth; And in the next six months, the company's shareholders will reduce their holdings by no more than 2 million shares. Behind this, in addition to the decline in contract manufacturing revenue caused by the weak overseas consumer market, the continuous compression of domestic market share is also an important reason.
The numerous temporary cross-border factories in the Yangtze River Delta region quickly became the first casualties of the industry's internal competition. A large number of new brands end up without success after just launching a few products, either completely withdrawing from their industry or relying on large factories to produce for them. The same situation also occurs in the campsite industry. High investment and slow returns are common market problems, while maintaining dismal performance is the norm in business. Almost every day, new campsites open, and almost every day, old campsites quietly end.
After the hustle and bustle, facing a pile of chicken feathers on the ground, a soul torture also arises: Camping, is it really so popular?
For the penetration rate of camping population in China, two widely cited statistics are 1% and 3%, respectively. However, whether it is 1% or 3%, the penetration rate is far from Japan's 10% and the United States' 15.8%. This certainly indicates considerable potential for future growth, but it also clearly demonstrates that the maturity of the domestic camping consumer market is far from what was expected, and it is highly mismatched with the unprecedentedly large camping industry.
Xiaojia's view is somewhat pessimistic. She believes that rather than camping, it is more about setting up tents outdoors: "The number of real camping players is quite limited, so the demand for campsites may not be as huge as imagined. After all, tents can also be set up in parks." However, Zhang Zhixi believes that if we simply "rent a venue," campsite business will soon become unsustainable. Focusing on the core user group, creating differentiated products, and avoiding homogeneous competition are the key to breaking through the camp.
In fact, as a high consumption and low-frequency outdoor entertainment method, the participation threshold for camping is not low. The nationwide camping craze is a false proposition in a sense.
"Time cost is a threshold," Cao Ye said. "Everyone's rest time is already very limited. When the tourism industry fully recovers, traditional check-in tourism is obviously more cost-effective for ordinary consumers, far more attractive than camping." Cao Ye said that it should be soberly recognized that camping is still in the niche category. Manufacturing companies blindly betting on market potential, expanding or crossing boundaries, may not only reap the consequences but also drag the entire industry into a quagmire.
In recent years, domestic social media platforms such as Xiaohongshu have become increasingly evident in guiding and shaping the consumption habits and lifestyle of consumers, especially young consumers. This phenomenon itself does not matter right or wrong, but for the consumer hot spot that was fortunate enough to be hit by traffic overnight, how to maintain its popularity after the fading of the internet celebrity aura and seek stable and healthy long-term development is a problem that the industry must face directly. Note that "Little Red Books" will always have the next hot topic to promote, while consumers will always be fond of the new and dislike the old, and the boost of traffic is not unlimited.
