Guangdong Deerma Technology Co., Ltd.

Guangdong Deerma Technology Co., Ltd. is an innovative home appliance brand enterprise that specializes in the research, design, production, and sales of various home appliances. The company operates under brands such as "Deerma" and "Philips," offering a wide range of products focused on home environment, water health, personal care, and sanitary ware. Established in 2011 and listed on the ChiNext board of the Shenzhen Stock Exchange in 2023, Deerma is committed to refining life through its products and aims to meet evolving consumer needs with a multi-brand and multi-category strategy. The company's operations are centered around its strong supply chain management and in-house production capabilities, which have been developed over nearly a decade. Deerma has a significant presence in the Pearl River Delta region, known for its concentration of small appliance manufacturers. The company has formed strategic partnerships, including collaboration with Xiaomi, to enhance its production efficiency and product quality. Deerma's focus on internet marketing, data analytics, and consumer engagement enables it to adapt quickly to market changes and expand its reach in both domestic and international markets.

1. Focus on “internet + industry” and “supply chain + brand” to tap core small appliance demand at home and abroad Starting off as an outsourced operation provider, the Company developed profound insights into the internet and a first-mover advantage to pinpoint and capture every wave of internet profitable trends, such as horizontal e-commerce, social commerce, cross-border e-commerce, and live-commerce. Valuing greatly what consumer engagement can do in product innovation, marketing and conversion, and service improvement, the Company fully taps the potential of data from online sales to further guide marketing with data analytics. Based on its private-domain user data and the consumer life cycle of awareness, interest, purchase, and loyalty, the Company refines profiles of consumers from different demographics to look for prospective customers and drive sales from existing customers with higher marketing accuracy and conversion, enabling the Company to remain in a competitive position in the ever-changing internet sales market. The Company is located in Shunde in the Pearl River Delta region that enjoys industry cluster advantages for small appliances. Shunde is all the more famous for the “City of Home Appliances in China” as it is home to many well-known small appliance players including Midea Group, Xinbao Electric, Bear Electric Appliance, and Deerma, offering an industrial chain advantage. The Company has been investing in its own production capacity and, after years of efforts, has established a strong in-house capacity. In addition, the Company has integrated its production and sales systems and established a management and planning system for order scheduling, quality control, warehousing, and other operations and has continuously stepped up investments in automation to improve its production efficiency. Based on its core advantages in supply chain and product development capabilities, the Company has engaged in deep cooperation with Xiaomi. On the one hand, it has enabled integrated procurement of components in a vertical category and deepened the vertical supply chain to standardize core components, improve product quality criteria and reduce supply chain costs; on the other hand, the cooperation has enabled stable scalability of production capacity that smooths out the full-year capacity curve to gradually form a batch of stable and mature mass production lines. 2. Market-tested category and brand diversification capabilities to lay a solid foundation for future development The Company sticks to a “multi-brand, multi-category, and global” development strategy to continuously replicate its proven methodologies and build itself into an innovative home appliance leader that meets new consumption needs. Centered around the rapidly growing emerging home appliance category, the Company has formed an established portfolio of brands with different market positionings, target customer groups, and business models. The Company covers each product category and delves into corresponding consumption scenarios with its different brands. Professional teams of the various brands continue to accumulate experience in R&D, design, production, and sales in their segments and to launch high-quality, aesthetically pleasing, and value-for-money home appliance products. 3. Outstanding global expansion capability At present, China has the world’s largest production capacity of small appliances. With the industry cluster effect and relocating global industrial chains, China’s small appliance brands are faced with an inevitable choice of turning to overseas markets. Driven by its supply chain advantages, product innovation capabilities, cost-effective products, strong online operation capabilities, and Philips’ global brand DNA, the Company has gradually carved out a position in overseas markets, with outstanding global expansion capabilities. The Company has established a professional overseas sales and operation team, an expanding overseas sales network, good relationships with overseas customers in Europe, Asia, and South America, and a direct-to-consumer presence on Amazon for overseas sales. Additionally, the Company has been exclusively licensed by Philips for a variety of products, including water purifiers, water heaters, smart bathroom products, and mobile massagers. The Company’s offshore sales network has gradually taken shape through its continued efforts to deepen its offshore presence with new branches in Hong Kong, Europe, and North America, and enter distribution channels such as hypermarkets, department stores, and retail outlets. At present, the Company’s offshore footprint covers Hong Kong, Brazil, South Korea, Russia, Ukraine, Indonesia, Japan, Thailand, and other countries and regions. In 2020, 2021, and 2022, the Company recorded offshore sales for owned and licensed brands of RMB232.4846 million, RMB440.9884 million, and RMB446.4943 million, respectively, with a CAGR of 38.58%.