Yalu down jacket, as the second-largest domestic brand in China, has long aimed to surpass the industry leader Bosideng. Yet, despite its efforts, it has never managed to fully break through. What went wrong? Why, despite being the "second child," hasn't Yalu been able to stand on its own feet? And how did a company with only 3,500 down jackets in business manage to rise so quickly?
Mengniu, the dairy giant, took seven years to become the second-largest player in its industry, with sales exceeding 10 billion yuan. In contrast, Yalu, in the apparel sector, achieved similar growth within just five years, going from an unknown name to becoming the second-largest down jacket brand in China — Jiangsu Ya Lu Group.
Founded in 1972 as a small garment factory with a dozen sewing machines, Yalu started by doing simple processing work for state-owned enterprises in Shanghai, making nylon shirts and earning just a few cents per piece. For years, it remained stagnant until the early 1980s, when it seized the opportunity of the rising demand for jackets. It made a bold move by buying low-cost wool and producing men’s jackets, which were then sold in Nanjing and Shanghai. The result was a miracle: 163 consecutive days of queues at Yalu stores. By 1993, Yalu had become the leading brand in Chinese jackets, with a market share of over 15%.
However, by 1997, the jacket trend began to wane, causing a sharp decline in sales. Faced with this crisis, Yalu restructured again. It identified a growing opportunity in the down jacket market, where many companies were still stuck in processing and foreign trade. Yalu decided to innovate boldly in style and color, using its existing sales channels to build a nationwide network. Within a short time, Yalu's new and fashionable down jackets spread across tens of thousands of outlets, even reaching towns in central and western China.
By 1999, Yalu invited Zhao Wei, known as the “Little Swallow,†as its brand ambassador. Her charm helped boost Yalu’s brand visibility and reputation significantly. Annual production reached 20 million sets, with total sales hitting 2.1 billion yuan. Yalu became the fastest-growing down jacket brand in the industry, maintaining the highest growth rate for years and capturing more than 15% of the domestic market.
In 2004, Yalu occupied about 10% of the U.S. down jacket market and successfully registered its brand in 16 countries, including Germany, Spain, and France. It stood out among 3,500 down jacket companies and became the second-largest brand. Its rapid growth earned it the nickname “the Mengniu of the clothing industry.â€
Yalu’s success can be attributed to its ability to seize market opportunities, adapt to industry trends, and continuously adjust its business direction. It leveraged its existing channel resources and expanded into various product lines such as down jackets, shirts, and suits, maximizing the utilization of its distribution network and building a unique marketing model.
However, as winters became warmer and competition intensified, Yalu found itself struggling. Advertising wars, price wars, and promotional battles raged. Could Yalu, the “second child,†rise to the next level? How long could it keep up with Bosideng, the industry leader?
Bosideng, like Yalu, started as an OEM manufacturer. It built a wide network of trade and sales partnerships, set the first cashmere down jacket standard, and sponsored global climbs, shaping the development of the industry and establishing itself as the top brand. By 2005, Bosideng’s sales reached 6.5 billion yuan, more than three times that of Yalu. To prevent Yalu from catching up, Bosideng invested heavily in acquiring retail terminals and pressured retailers not to sell Yalu products, allowing only other brands. The rivalry between the two had turned into a fierce battle.
Yalu tried to follow Bosideng’s moves, but it always lagged behind. While Yalu used slogans like “Yalu down jacket sales hit record highs every year†and “a real down jacket expert,†Bosideng continued to lead with phrases like “down jacket sales in the world†and “leading the industry revolution.†This left Yalu in a difficult position, caught in a cycle of price wars and promotions, unable to break free.
One major issue was the lack of a clear brand identity. Despite being on the market for years, even Yalu employees struggled to define what the brand stood for. The slogan “real down jacket experts†was mostly media hype, and without a solid brand strategy, Yalu’s marketing activities lacked direction and planning, creating potential risks.
Another problem was the lack of a dedicated marketing department. Yalu relied on a planning department focused mainly on design and basic promotional materials. During peak seasons, they simply produced some terminal materials without targeted strategies or market research. Promotions were often imitations of Bosideng, lacking creativity and effectiveness.
Moreover, Yalu’s marketing system was fragmented. With over 60 branches, most operated semi-independently, and some even ran their own factories. This led to inefficiencies, poor coordination, and internal competition. Communication costs were high, and regional policies often conflicted, causing chaos in market management.
The terminal system was also chaotic. Sub-brands competed internally, and the store image lacked consistency. Sales staff couldn’t clearly explain the differences between product lines, and after-sales service was minimal. Customer dissatisfaction grew, with complaints about quality and poor service, damaging the brand’s reputation.
Despite these challenges, Yalu still had opportunities. Like Mengniu and other successful brands, it needed to find effective breakthroughs. Differentiation and innovation were key. If Yalu could overcome its internal issues, it might still have a chance to climb to the top.
In conclusion, Yalu’s problems are common among many domestic companies. However, with proper strategies and focus, it can still turn things around. The path to success is not easy, but with determination and innovation, Yalu can reach its pinnacle.
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