Analysis of Traffic Cost Pressure on Banmu Huatian's Online Channels

Based on the latest collected data, I will conduct a systematic analysis of the traffic cost pressure faced by Banmu Huatian, whose online channels account for over 70% of its revenue.

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According to the prospectus data, the rise of Banmu Huatian

, with online channel revenue accounting for over 70% of total revenue for years [1]. The company only started selling products through offline channels in 2021, and this “online-heavy, offline-light” channel structure is a distinctive feature of e-commerce native brands.

Indicator	2023	2024	First Nine Months of 2025
Revenue Scale	Approx. RMB 1.199 Billion	Approx. RMB 1.499 Billion	Approx. RMB 1.895 Billion
Net Profit	RMB 20 Million	RMB 50 Million	RMB 125 Million
Marketing and Promotion Expenses	-	-	RMB 833 Million

In terms of performance growth, Banmu Huatian has shown a high-growth trend, with revenue reaching RMB 1.895 billion in the first nine months of 2025, representing a 76.8% year-on-year increase compared to the same period in 2024 [1].

In the field of content e-commerce, Banmu Huatian adopts a combined strategy of

:

• Celebrity Endorsement Matrix
  : Guan Xiaotong (2019), Ju Jingyi (2020), Yang Yang (2021), Dilraba Dilmurat and Sun Yingsha (2024-2025) [1]
• Breakthrough on Douyin Channel
  : Achieved status as a “top-selling content live-stream room” on Douyin through personalized targeting using intelligent business tools such as “Qianchuan” [2]
• Brand Story Marketing
  : Moved live-stream rooms to flower field sites, presenting product stories through synesthetic content

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The current e-commerce industry is facing severe traffic cost pressure:

Cost Indicator	Data Performance
Growth Rate of Platform Traffic Acquisition Costs	Increased by 30%-50% in the past year [3]
Growth Rate of Traffic Costs for Some Merchants	Increased 10-fold [3]
Traffic Acquisition Costs for White-label Merchants	Can reach up to 100% of sales revenue [4]
Proportion of Promotion Expenses for Small and Medium-sized Merchants	Accounts for 60%-70% of profits [4]

:

• Initial traffic costs for launching a Tmall store and creating best-selling products:
  RMB 500,000 - 1,000,000
  [5]
• Store opening costs on Pinduoduo:
  RMB 100,000 - 300,000
  [5]
• Online traffic costs for store opening have exceeded the total offline costs (rent + utilities + operations) [5]

According to the prospectus disclosure,

[1]:

First Nine Months of 2024 → First Nine Months of 2025:
Revenue: RMB 1.072 Billion → RMB 1.895 Billion (+76.8%)
Marketing and Promotion Expenses: RMB 461 Million → RMB 833 Million (+80.9%)

This means that the growth rate of marketing expenses

, indicating:

1. Diminishing Marginal Returns
   : The revenue growth generated per RMB 1 of marketing investment is declining
2. Declining Traffic Efficiency
   : More marketing investment is required to maintain the same growth level
3. Increased Cost Rigidity
   : If traffic costs continue to rise, profit margins will be squeezed

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Risk Dimension	Specific Performance
Platform Dependency Risk	Highly dependent on mainstream e-commerce platforms such as Tmall and Douyin; adjustments to platform rules directly affect traffic allocation
Bidding Mechanism Risk	Most platforms adopt a “bid ranking” logic, leading merchants to fall into a “prisoner’s dilemma” [5]
Superimposed Return and Exchange Costs	Rising return rates (e.g., from 30%-40% to 70%-80% in the women’s clothing industry) further erode profits [4]
Rising Content Costs	Costs of high-quality content production + influencer cooperation fees continue to rise

Banmu Huatian faces

[1]:

Competition Type	Key Competitors
Traditional Foreign Giants	Procter & Gamble, Unilever (Dove, Lux, etc.)
Emerging Domestic Brands	Off&Relax (under Proya), Sansen Wanwu (under Bloomage Biotech), Juyi Group
Cross-border Entrants	Shangmei Corporation (One Leaf, Kans Hair Care)

These competitors are also increasing their online marketing investment,

.

Banmu Huatian’s product pricing is

[1]:

Product	Banmu Huatian Pricing	Competitor Brand Pricing
500g Flower Extract Shampoo	RMB 89.9	Lux 470g: RMB 44.9
400g Body Wash	RMB 49.9	Dove 400g: RMB 39.9

If traffic costs continue to rise,

:

• Maintain high prices: May lead to sales decline and market share loss
• Reduce prices for promotions: Squeezes profit margins and affects brand premium capability

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According to the prospectus, Banmu Huatian has planned the following strategies:

• Overseas Market Expansion
  : Launch international layout starting from Southeast Asia [1]
• Offline Channel Construction
  : Expanded offline sales since 2021 to reduce dependence on a single online channel

• High-quality Content-driven
  : Seize the opportunity of Douyin’s increased weight on “content quality” and “transaction value” to obtain organic traffic through high-quality content [2]
• Private Domain Traffic Accumulation
  : Convert public domain traffic into brand-owned user assets to reduce dependence on paid traffic

• Product Differentiation
  : Continue to invest in R&D to improve product efficacy and user experience
• Brand Value Communication
  : Deepen the “rose flower field” brand story to enhance consumer brand loyalty

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, which is mainly reflected in the following aspects:

1. Increased Cost Rigidity
   : The growth rate of marketing and promotion expenses (80.9%) outpaces that of revenue (76.8%), with diminishing marginal returns
2. Common Industry Challenges
   : E-commerce traffic costs have generally increased by 30%-50%, and some merchants’ costs have increased 10-fold
3. Intensified Competition Drives Up Costs
   : Numerous brands have entered the content e-commerce track, making traffic bidding increasingly fierce
4. Profit Margins Under Pressure
   : Without absolute pricing advantages, rising traffic costs directly erode profits

: If traffic costs continue to rise or platform rules are adjusted, Banmu Huatian may face the risk of . Capital support obtained after IPO may become an important buffer for it to cope with traffic cost pressure, but in the long run, diversified channels, improved content efficiency, and deepened brand value are the fundamental solutions.

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[1] Time Online - “Revenue from Personal Care Products Exceeds RMB 1.8 Billion in 9 Months, Founder of Lin Qingxuan Also Makes a Strategic Investment” (https://time-weekly.com/post/326911)

[2] Phoenix Net - “Understand Douyin’s Underlying Logic to Find the Upside for Business” (https://h5.ifeng.com/c/vivoArticle/v002KKkQ8CMutLJn550iQuoW8od-_nu8--n2VbVv3Djqsndv8__)

[3] Sina Finance - “E-commerce Sellers’ Traffic Costs Soar, How to Solve This Problem?” (https://finance.sina.com.cn/money/bond/2024-11-29/doc-incxsxxw8917467.shtml)

[4] CBNData - “Traffic Acquisition Costs Reach Up to 100%, Small and Medium-sized Merchants Crave ‘Traffic Equality’” (https://m.cbndata.com/information/293367)

[5] 21st Century Business Herald - “It’s Almost 2025, E-commerce Should Reduce Traffic Costs” (https://www.21jingji.com/article/20241223/herald/cc272bd52b6dbd9978116b0a6130acdb.html)