The founder born in the 1990s started from scratch, from an annual income of 1 billion to closing stores and shrinking: "Landing is harder than taking off"

In the new consumption wave, Bosie, as a pioneer of gender-free clothing, once rose rapidly with annual sales of 1 billion. However, under market changes and the challenges of the epidemic, Bosie experienced a transition from peak to contraction. Co-founder Li Qixian returned to the helm and led Bosie back to profitability by optimizing the supply chain and closing loss-making stores. This article explores Bosie's rise, difficulties and transformation, showing its tenacity and wisdom in surviving and developing in adversity.

The Ministry of Commerce has designated 2024 as the "Year of Consumption Promotion". In 2024, E-commerce Online will launch the "Dialogue with Chinese Brand Managers" series, inviting the most popular brand managers to have a dialogue and listen to their unique thoughts on brand building, popular design and the latest consumer trends. This issue's guest: Li Qixian, co-founder of bosie.

"From 2018 to 2020, our sales doubled every year, and at our peak we were able to sell 1 billion yuan a year."

That was the heyday of bosie. It had a lot of room for imagination - as the earliest brand of gender-neutral clothing in China, its market segment was segmented enough and its users were young enough. It also had an astonishing growth rate - in 2018, it was one of the brands with the fastest sales of over 100 million on Tmall. With the awakening of gender equality awareness, it perfectly fits the direction of the rise of cultural trends.

If there are smart founders and the "halo" of famous schools such as Peking University and Tsinghua University, then it will be "invincible" in the capital market in those years. "The logic of everyone's entrepreneurship is suddenly very different from before."

Bosie co-founder Li Qixian recalled that year, Dai Wei, who graduated from Peking University, became a "man of the hour". The ofo bike company he founded raised more than 7 billion yuan in just half a year. This not only encouraged all Peking University students who wanted to start a business to go abroad, but also attracted the attention of the capital market. "The entrepreneurship of top students from prestigious universities has attracted the attention of many angel investors. Entrepreneurship no longer requires the accumulation of family resources. As long as you have an idea, you may be recognized by investors."

Education and connections have become resources that can be monetized. These funds provide a stepping stone for young people with ideas to start their own businesses. Investors are beginning to pay more attention to "selecting people" when investing in new projects, which is also brewing a new round of revival in the consumer market.

Perfect Diary was founded the year before, and it took only three years to achieve sales of 3 billion yuan. This "light of domestic products" rang the bell on the New York Stock Exchange, awakening all the dormant Chinese entrepreneurs; Zhong Xue Gao was born in 2018. During its first participation in Double 11, it sold more than 20,000 ice cream sticks at a price of 66 yuan. The following year, its sales across all channels exceeded 100 million yuan;

Yuanqi Forest just launched on the market, and its market value soared to 15 billion US dollars in the next five years, surpassing Uni-President and Master Kong, which have been operating in the domestic beverage market for many years; Pop Mart opened an online store on Tmall, and its "trendy toys" made everyone crazy...

It was in such an era that Liu Guangyao chose to start a business. With an undergraduate degree from Peking University and a master's degree from Tsinghua University, he had a good hand. In 2017, at the age of 22, he started to build a team. After many twists and turns, he found Li Qixian, who was still a graduate student at the Hong Kong University of Science and Technology at the time.

This was the beginning of Bosie. It was not easy for a young entrepreneur to recruit people. The people he initially found were few and far between in half a year. Li Qixian and Liu Guangyao were like-minded and had a "revolutionary friendship" that had lasted all the way from Beijing to Hangzhou.

At that time, they would not have thought that in the next few years, they would be overwhelmed by the rapid influx of hot money, with many investment institutions competing to "lead the investment", and sales would reach 140 million a year. In 6 years, this team was almost entirely made up of post-90s brands, and sales exceeded 2.5 billion. They also would not have thought that the "cold winter" would come overnight and the two would part ways one day.

Capital's quick money no longer favors new consumption, and the epidemic has dealt a heavy blow to countless new brands that have just emerged.

"In the past two years, Bosie's overall transaction scale has declined. In 2023, our annual revenue will fall back to 300 million." Li Qixian left Bosie in 2021 and returned in 2022. He succeeded Liu Guangyao as CEO in May last year. Speaking of Bosie's situation, he was calmer than expected.

Looking back, 2021 will become a watershed year for the growth of bosie and even many new consumer brands.

In 2021, when the brand was at its peak, Bosie quietly laid hidden dangers. The young team lacked experience in supply chain management and faced new challenges after moving from online to offline. The surging hot money was like the weights on the table, getting bigger and bigger, making people "getting more and more excited" like chicken blood... The scale must be large and the ceiling must be high. In those years, the speed of burning money was much faster than making money. Expansion was the main theme, and considering profits was "small-scale" - this was the entrepreneurial logic of many founders at the time.

"Or rather, I am now more at ease than at any other time in the past."

Compared with Liu Guangyao's good offense, Li Qixian said he is better at defense. "Since its establishment, Bosie has always focused on the expansion of scale and has never paid attention to its own profit situation. Sometimes I would think, what if the investment is cut off? What if the money is gone? We have opened so many stores and hired so many employees, will the money not be paid out? At that time, I was very anxious every moment." Now, although there is no annual turnover of 1 billion, Bosie, which has begun to learn to slow down, finally sees hope of profitability in 2024.

What happened to the new brands that once dominated the market? Why did they go from being popular to being dormant?

【Bosie co-founder Li Qixian】

The following is the transcript of an exclusive interview with Li Qixian by E-commerce Online:

1. After selling 1 billion in one year, I chose to "leave"

Q: Why are you paying attention to gender neutrality? Is bosie’s sudden rise due to finding a good style and a good track?
A: Guangyao and I are not from the fashion or art industry. We chose to make gender-neutral clothing mainly because we saw its market potential. Around 2017, oversized styles began to become popular in the fashion circle, and girls began to wear some large-shaped clothing. The "unisex style" that is very common now was just beginning to become popular at that time, and the market began to demand this kind of new products.

At the same time, the concept of "non-sexism" also contains new cultural attributes and value propositions, which can give the brand a new spiritual core and provide space for storytelling. Such new products + new concepts + new stories quickly won the favor of investors. At that time, we had almost nothing, but we were lucky enough to get nearly 3 million seed round investment to start the entire project just by relying on this idea.

Bosie started to explode online. We caught up with a critical time point - Tmall platform began to support domestic designer brands and wanted to incubate some benchmark cases. At that time, the pricing and new product launch efficiency of traditional designer brands were difficult to match the needs of e-commerce platforms. However, our style is unique and the pricing is affordable, so we quickly achieved a good conversion on Tmall. Bosie's initial rapid development was indeed due to some "times make heroes".

Q: How many stages can be divided into the development of Bosie? When did the changes occur?
A: 2018 to 2019 was the first start-up stage. We experienced explosive growth on Tmall and became the fastest new brand to break 100 million in the history of Tmall men's wear. At the same time, we also made our mark in the venture capital circle. 2020 to 2022 was the second expansion stage. With the support of capital, we began to move from online to offline and opened flagship stores in the core business districts of many big cities. The brand began to have a certain voice and influence. The end of 2022 to today is the third contraction stage. After the capital ebb, we began to readjust our development strategy, gave up the pursuit of scale, and began to focus on efficiency and profit.
Q: What is the turning point from expansion to contraction?
A: The most direct reason is the epidemic. First, fewer people go shopping offline. Second, many investors are no longer interested in new consumer projects and have withdrawn from the market. We were opening large offline stores at the time, and store expansion actually requires a lot of capital.
Q: Do investors have a big influence on you?
A: Yes. At that time, like many new consumer brands, many of our business operations were oriented towards financing.

At that time, investors were more interested in growth rate, market size, and more imaginative development prospects. So every time we received a new round of financing, we never thought about consolidating the weak links of the existing business, such as the supply chain. Each round of financing eventually became a new lever, just to create a better report card for the next round of financing.

Q: Can you give an example?
A: For example, in 2021, we opened our largest flagship store on Huaihai Middle Road in Shanghai.

The store was originally over 2,000 square meters, and the monthly rental and property costs alone were nearly 2 million. Taking into account labor costs and decoration amortization, profitability is a long way off. But at the time, the project did upgrade the clothing store into a diversified community space. In addition to buying clothes, you can also check in at various art installations and socialize with your pet. The crossover from the traditional clothing industry to the innovation of offline commercial spaces has allowed investors to see more possibilities for the brand's future and has also attracted the interest of more investors. Before capital completely abandoned the new consumer track, we did not see the huge losses it brought in time.

Q: Bosie’s sales reached 1 billion in 2021. Why did you choose to leave at the peak of its success?
A: As we gained more and more capital, the differences between Guangyao and me in business became bigger and bigger. For example, I strongly opposed opening a large store from the beginning, but Guangyao believed that we must try and not follow the old path of traditional clothing brands.

At our peak, we had more than 50 offline stores, almost all of which were large stores over 400 square meters.

The bigger the store, the more SPUs we had to develop and the more inventory we had to prepare. At that time, we had to ship 400 to 500 SPUs in a quarter, and more than 2,000 SPUs a year. In order to expand the store, we expanded our product categories to include children's clothing, home furnishings, women's clothing, and even pet clothing. We also needed to have a larger R&D, operations, sales, and marketing team, so that the number of people at our headquarters once exceeded 400, which eventually caused a lot of inventory pressure.

At that time, investors and Guangyao were eager to raise the ceiling of the project, and did not want Bosie to be limited to a "small and beautiful" brand. I have always believed that the mission of a designer brand is to deeply serve different vertical groups of people, and in the future, we can break this bottleneck by incubating more new brands. Rapid expansion at the moment will definitely cause problems.

2. Get rid of financing dependence and become a profitable business first

Q: How did you feel when you first left Bosie? Why did you decide to come back?
A: I felt like I was holding my breath when I first left. During the time I left Bosie, I also tried to start my own business and joined other teams. I wanted to quickly prove that I was right and Guangyao was wrong. But in the process, I began to personally experience raising funds, pulling resources, and forming a team. I played more of Guangyao's role at the beginning, and I also encountered many obstacles. I thought from his perspective, and in the end, I could understand and admire Guangyao more and more.

In August 2022, Guangyao called me. He felt the changes in the market and decided to shrink the business and return the brand to its original direction. And I might still be the most suitable candidate. So we quickly reached a tacit understanding, learned from each other, and reunited.

Q: What will the market environment be like when you return in 2022?
A: At that time, almost no one invested in the consumer industry. Many well-known venture capital institutions we had contacted before had almost all laid off their consumer groups. Many star startups that were once popular in the new consumer field also received news such as defaulting on supplier payments and founders running away. The surviving startups also began to cut off their arms to survive. It was almost impossible to rely on financing and storytelling to maintain the life of the brand.

Q: How did the contraction take place? How many stores do you have now?
A: There are two main aspects. One is to cut off many product lines with poor performance, and the other is to close a large number of offline stores that were losing money. We now have about 30 offline stores nationwide. Almost all the large stores have been closed, and the remaining stores are basically around 150 square meters. And most of our stores are now franchised, with only about 10 directly operated.

In the joint venture model, we are mainly responsible for supply, while the joint venture partners are responsible for decoration, labor, rent, etc., and we will split the final sales with the customers 50-50. The biggest benefit of the joint venture is that it reduces the financial pressure of direct sales and also gives the parts that we are not good at to trusted partners.

In the past, we opened direct-operated stores in unfamiliar cities, but we often couldn’t negotiate good rental conditions with local shopping malls, which ultimately led to serious losses for our direct-operated stores. However, our franchised customers have more or less local resources, making it easier for them to get good rental conditions and locations, and they also understand local consumption habits better, so it is easier for both parties to make money through cooperation.

Q: When you first came back, you were the Chief Brand Officer. How has your job changed since you became CEO last year?
A: In the past, CBOs focused more on the creative aspects of products and brands, but now they are more responsible for the overall financial results of the company.

For example, when I was making products in the past, I would encourage designers to be creative and bold; but now I am more cost-conscious. For many products, I will ask designers to make simple modifications without destroying the core creativity, optimize the cost structure of the product, and balance the effect and efficiency of the product. I am also more involved in the product and operation level, and can better feed back to the R&D link.

Q: Are there any changes in the organizational structure?
A: The overall structure has become flatter now. In the past expansion period, we recruited many executives from many large companies, and the headhunting fees were several million a year. While these executives brought more professional opinions, they also increased the decision-making costs of the business. The entire business process became more complicated, and there were more interests to balance, which inevitably led to deformation of operations.

Now, after several rounds of staff replacement, we have returned to the early stage of decentralization and flat management, and the overall efficiency has been greatly improved.

Q: Are you mentally able to accept it?
A: In the past few years, we all hoped that Bosie could succeed quickly, but we took many detours and were severely educated by the market. Although the scale is smaller now, I feel that it has finally returned to a healthier state.

My biggest realization in the past two years is that the most important lesson in life is not how to take off, but how to land. Taking off is not that difficult, as long as you have enough fuel and stand in the wind, you can always fly. But the real test of driving skills is how to land safely and smoothly on the ground. Many founders would rather die than live in disgrace, and they feel a gap in their hearts.

In comparison, Bosie is lucky. It is not too late for us to transform. Has Bosie landed safely today? I think it is at least gliding. As a capital target, it may have temporarily lost its high imagination space. But it must first become a business and achieve self-sustaining blood before it can walk more steadily. In my opinion, it is better to walk far than to fly high. There is still a long time, and it is too early to judge success or failure.

3. "Sixth grader" Bosie does not necessarily have to go public

Q: 300 million a year, is the profit higher than 1 billion a year before?
A: Yes. Now we will focus more on profit margin rather than sales.
Q: This year may be the first year that Bosie makes a profit. Do you have any expectations for the scale of the profit?
A: It can be achieved at present, and the second half of the year will be crucial. But at least Bosie landed safely, and there will be no major changes.
Q: What difficulties will you encounter at this stage?
A: The most difficult thing is the financial pressure. Now we have become very cautious about many projects that require a little money. For example, during the peak period, we would have four or five joint series at the same time. Cross-border joint series have always been what Bosie is best at. Last year, there was actually a good opportunity for joint cooperation, but we eventually gave up because the licensing fee was 1 million yuan.
Q: Supreme was also sold some time ago, and trendy brands haven’t been doing well in the past two years. What is the difference between Bosie and them?
A: The biggest difference between us and traditional fashion brands is that we focus on design innovation rather than symbol communication. Traditional fashion brands almost all create their own super symbols, quickly form memory points through viral distribution, gradually penetrate from KOLs, and cultivate their own audience. Our brand symbols are relatively scattered. We have both long-term classic IPs such as The Little Prince and self-developed IPs that are newly developed every season.

Although it is not focused enough and its communication efficiency is low, it also reduces the risk of becoming outdated due to relying on a single symbol to a certain extent.

Q: What is the current online and offline ratio of bosie, and what is the user portrait?
A: Online accounts for 65%. In terms of users, customers aged 16-30 account for more than 80%, and more than 60% are girls.

Our users are basically young people who pursue personalized expression. They are very much in pursuit of design and creativity. When they choose Bosie, they must want to become a different person after wearing it. This feature also determines that we cannot use a single symbol to represent the entire brand.

We have also made some popular mainstream models. Although these models can be sold, they cannot become hot-selling products.

Bosie's hits must be unique in the market. This is why we have many student customers. During the winter and summer vacations, our offline sales data will reach a peak. Teenagers are in the stage of exploring themselves. They are more eager to show their uniqueness and are more courageous and confident in their choice of clothing. This is completely different from the office workers who want to cover up their individuality as much as possible and follow the trend of clothing.

Q: What are you most concerned about now?
A: It’s still product innovation, which is the core lifeblood of any clothing brand.

This year, we made a jacket co-branded with the Little Prince. This is our first attempt at outdoor products. Unlike traditional jackets that focus on functionality, we also added Bosie's own brand genes to the color and design, hoping to integrate the Little Prince's adventurous spirit into the product. This jacket was just launched in July this year. In such hot weather, the daily sales volume has ranked first in the store. This is a great motivation for me.

【Little Prince co-branded assault jacket】

Q: Where do you think growth might be found in the future if it is not through opening new stores?
A: It may be the overseas market. Bosie's gender-neutral philosophy and unique product style may find more like-minded people overseas.
Q: When will you have time to consider going overseas?
A: Overseas operations require higher delivery time and cost from the supply chain. Once the company has stable profits and has cultivated a group of deep strategic supply chain partners, we will start to work on overseas operations.
Q: How do you divide the work between Guangyao and you now?
A: I will be more responsible for the management and execution of the company's specific business, but I will often bring him along for discussions on the strategic level. He is more suitable for exerting his energy in the offensive stage. In the past year, he took time off to run his own media and quickly gained more than 3 million followers. In the future, when Bosie is fully adjusted and needs to launch another offensive, he will be ready to come back and lead the team to victory.
Q: What is the future of Bosie? Did you originally plan to go public?
A: When I was 25, I was selected into the Forbes China Under 30 Elite List. My dream at that time was to have my company listed when I was 30. But this year I finally turned 30, and my dream has become that my company can survive safely.

Therefore, it is meaningless to imagine the future. Building a brand is a step-by-step process.

Sometimes it is not necessarily a good thing to get more resources than you can handle too quickly. Many opportunities in life may only come once, and if you mess up, they are gone. Now I think that whether I am 30 years old or Bosie is 5 or 6 years old, I am still very young. I really shouldn't rush for success, but should slowly build a good reputation. Most of the excellent brands on the Chinese market have a history of more than 10 to 20 years, and have experienced ups and downs.

In fact, no matter how big or small, whether it is listed or not, as long as it can make money, it is a good company. First, do your own content and products well, preserve your strength, and stay on the table, especially in the difficult economic situation in the past two years. Building a brand is a long-term thing.