Group 1 - A brand crisis triggered by a customer service incident is exposing operational difficulties for Hengan International [2][4] - The incident involved a customer being verbally abused by a service representative during a promotional inquiry, leading to widespread negative attention on social media [3] - Hengan International's response included claims of abnormal account access and promises of compensation for affected consumers, but no updates on the situation have been provided as of May 12 [4] Group 2 - Hengan International's financial performance is concerning, with a reported revenue decline of 4.6% and a net profit drop of 17.9% for 2024 [4] - The company's core tissue paper segment has experienced a significant loss of 245 million yuan, marking the first loss in this area [4] - Rising costs and industry price wars are contributing to unprecedented challenges for this once-prominent brand known for "Seven Space" and "Heart to Heart" products [4]

Core Viewpoint - The article discusses the challenges faced by Hengan International following the death of its founder, Xu Lianjie, and highlights the company's struggles with market competition, product controversies, and a need for strategic transformation towards high-end products [3][19][28]. Group 1: Company Challenges - Hengan International has been embroiled in controversies, including a recent incident where customer service offered "1000 yuan in ghost money" as compensation, leading to public backlash [6][7][12]. - The company has faced multiple product quality complaints, including issues with tissue paper and sanitary napkins, which have damaged its brand reputation [9][11][12]. - The company's revenue has been declining, with a reported 4.6% drop to 22.69 billion yuan and a profit decrease of 17.9% to 2.29 billion yuan in the last fiscal year [20][21]. Group 2: Market Position and Competition - Hengan International's market share has significantly decreased, with its tissue brand, "Heart to Heart," now holding only 11% of the market, lagging behind competitors like Vinda and Jieshou [20][22]. - The rise of new players in the market, such as DeYou and other niche brands, has intensified competition, particularly in specialized paper products [17][18]. - The overall market for paper products is experiencing a shift towards specialized items, with consumers increasingly favoring products tailored to specific needs [15][16]. Group 3: Strategic Transformation - Following the leadership transition to Xu Qingliu, the company aims to pivot towards high-end products and enhance its e-commerce presence [25][26]. - Hengan International has introduced new high-end product lines, including the "Fluffy Cube" tissue series, which utilizes advanced drying technology [26][27]. - The company is focusing on brand revitalization and finding new growth directions in the wake of its founder's passing [28].

Group 1 - The core issue involves a customer service incident at Hengan International's "Heart to Heart" e-commerce platform, where a customer was insulted by a service representative, leading to a public outcry and company investigation [1] - Hengan International reported that the customer service account in question showed unusual login activity, prompting further investigation into whether it was a personal misconduct or a technical issue [1] - The company emphasized its commitment to addressing the situation, stating that if the behavior was intentional, appropriate disciplinary actions would be taken against the employee, and compensation would be provided to the affected customer [1] Group 2 - Hengan Group's latest financial report for 2024 shows a revenue of 22.669 billion RMB, a year-on-year decrease of 4.6% [2] - Operating profit for the same period was 3.355 billion RMB, down 15.7% year-on-year, while net profit fell to 2.299 billion RMB, a decline of 17.9% [2] - The "Heart to Heart" brand, which is a significant contributor to the company's revenue, accounted for 59.2% of total income, with a year-on-year drop of 2.4% to 13.42 billion RMB [2] - The sanitary napkin segment represented 25% of total revenue, experiencing a decline of approximately 8.1% [2]