Listed for five years, distributed HK$4.4 billion in dividends, spent HK$17.8 billion on sales, and invested just HK$220 million in R&D... Blue Moon's predicament is hidden within these very numbers.

Blue Moon may be one of the most disheartening consumer companies in recent years. When Blue Moon Group (06993.HK) rang the bell on the Hong Kong Stock Exchange in December 2020, its market value briefly soared past HK$100 billion. At the time, the company held a strong hand: it had led China's laundry detergent market for years, had cemented a brand identity in consumers' minds, boasted a gross margin as high as 60%, and held over ten billion in cash on its books.

Yet, despite its brand strength, market leadership, and financial resources, Blue Moon mismanaged its advantages. Just five years post-IPO, its market capitalization has shrunk by over HK$90 billion, net profit has swung from hundreds of millions into losses, and its cash pile is rapidly depleting.

The root cause lies in how Blue Moon allocated its funds. Two years ago, it threw substantial resources into livestream e-commerce, partnering with top Douyin influencers. This burned through billions; while gross merchandise value looked impressive, the company suffered severe losses from which it has yet to recover.

Amid ongoing losses, founders Qiu-Ping Lo and Dong Pan have continued treating the listed entity as a family cash machine, extracting nearly HK$2 billion through dividends over two and a half years. The pair alone took home HK$1.459 billion.

While spending lavishly on influencer marketing and shareholder payouts, Blue Moon has been comparatively stingy in areas that require investment.

Where It All Went Wrong: The Road to HK$9.5 Billion in Sales Costs and HK$1.2 Billion in Losses

Before its IPO, Blue Moon was highly profitable. In the three years prior to listing (2017-2019), revenue grew from HK$5.632 billion to HK$7.05 billion, while net profit surged from HK$86 million to HK$1.08 billion, representing a compound growth rate exceeding 254%. In its 2020 listing year, net profit hit HK$1.308 billion.

Post-listing, however, everything changed. Although revenue increased annually and gross margins remained high-60.6% in 2024 and 59.7% in 2025-profits shrank each year, eventually turning into losses from 2024 onward.

Where did all the money go? The answer lies in the sales expense line. Financial reports reveal that Blue Moon's sales expenses reached HK$5.049 billion in 2024, representing 59.01% of its full-year revenue. In other words, the company spent nearly 60% of its income on advertising, channel expansion, and promotional campaigns that year.

During 2024, Blue Moon maintained collaborations at a consistent frequency with top Douyin influencers such as Guangdong Couple, Dong Xiansheng, Zhu Xiaohan, Shu Chang, and Shen Tao. At that time, brands were already feeling the strain of high traffic-acquisition fees charged by leading livestreamers.

Frequent partnerships with top creators meant Blue Moon bore hefty traffic costs. According to Chanmama data, during the 2024 618 shopping festival, traffic-purchased visits accounted for up to 81.3% of Blue Moon's livestream traffic. A single session could readily generate over HK$100 million in GMV; during the 618 period, one broadcast sold over 10 million bottles of concentrated detergent, with single-session revenue peaking at HK$120 million. Online channel revenue grew 34.1% year-on-year to HK$5.1 billion.

The headline numbers looked stellar, but at year-end, the tally showed a net loss of HK$749 million.

Blue Moon pulled back slightly in 2025. Third-party data shows that the share of revenue from Douyin influencers dropped from over 70% in 2024 to 58.67% in 2025. The company expanded its official self-run livestream accounts to approximately 15, broadcasting an average of over 16 hours daily. Sales expenses fell to HK$4.468 billion in 2025, yet still accounted for 53.13% of revenue. At year-end, another loss emerged: HK$329 million.

Over two years, Blue Moon burned nearly HK$9.5 billion on sales expenses alone, ultimately learning the hard way what it means to work for the influencers.

By the first half of this year, Blue Moon had largely stopped paying top influencers. In the 2026 H1 Douyin sales ranking, the top five spots contained no major influencer accounts-all were Blue Moon's own official store channels.

However, reducing reliance on influencers has come with an equally visible decline in revenue. Sales fell 1.71% year-on-year in 2025, and first-half 2026 revenue stood at HK$2.883 billion, down 5.07%.

On August 20, Blue Moon released its 2026 interim results: revenue of HK$2.883 billion, down 5.07% year-on-year, and a net loss of HK$193 million. While losses are narrowing, the trend has not yet reversed.

The company attributes the reduced loss to improved operational efficiency, optimized channel structure, and smarter knowledge-based marketing-in essence, cost-cutting. First-half sales expenses dropped to HK$1.557 billion, compared with HK$2.201 billion and HK$1.91 billion in the corresponding periods of 2024 and 2025, respectively.

One might expect management to forgo raises after converting a business with 60% gross margins into consecutive losses, yet executives received pay increases-and substantial ones at that.

In 2024, total compensation for Blue Moon's directors and senior executives stood at HK$59.441 million, climbing to HK$71.879 million in 2025-an increase of more than HK$12 million in a single year. Executive Director and Chief Supply Officer Luo Dong alone earned HK$47.968 million in 2025, up HK$11.15 million from HK$36.818 million in 2024.

Meanwhile, founders Qiu-Ping Lo and Dong Pan have enriched themselves handsomely through dividends.

HK$3.2 Billion to Major Shareholders: How Long Can the Cash Last?

Another notable shift after the December 2020 listing was Blue Moon's pivot toward frequent, even excessive, dividend distributions.

Between 2013 and May 2020, cumulative dividends from Blue Moon Group were less than HK$400 million. In June 2020, prior to its Hong Kong listing, the company distributed HK$2.3 billion to its sole shareholder Aswann (in which the Pan couple held 88.92%). With Lo and Pan jointly holding 88.92% of Aswann, the couple took home HK$2.05 billion of that payout.

Following its IPO, with over HK$10 billion in cash on hand, Blue Moon began distributing dividends liberally. According to financial reports, from 2020 to 2023, the company paid out HK$2.441 billion in total dividends, of which the Pan couple received HK$1.85 billion over those years based on their 75.83% stake.

In 2023, despite a net profit of just HK$325 million, Blue Moon proposed a final dividend of HK$334 million-exceeding its annual profit. In 2024, after sliding into a loss, the company increased dividends further. Combined payouts for 2024 and 2025 reached approximately HK$1.557 billion, far surpassing the cumulative losses over the same period.

Based on shareholding ratios, more than HK$1.1 billion of that HK$1.557 billion flowed to the controlling family of Lo and Pan, while minority shareholders received only around HK$400 million of the total.

In the first half of this year, despite a HK$192 million loss, Blue Moon still declared an interim dividend of approximately HK$442 million-2.3 times its half-year loss.

Some might argue that a company prioritizing shareholder returns is rare and admirable. In reality, minority shareholders have received very little. Of the cumulative HK$4.44 billion in dividends paid over the five years since listing, Lo and Pan took HK$3.2 billion, the second-largest shareholder Hillhouse Capital received HK$378 million, and minority shareholders got a relatively small slice.

For minority investors, the dividends received are far from compensating for the erosion in market value. Blue Moon's share price peaked at HK$18 in late 2020; it now trades around HK$3.6, down more than 75% from its all-time high, wiping out over HK$90 billion in market capitalization.

On investor forums, shareholders have voiced frustration, noting that long-term holders face losses exceeding 75%, with thin dividends unable to cover the decline. One commenter remarked, "The actual controllers have filled their pockets, leaving only feathers for retail investors."

The funds fueling these dividend payouts have largely come from the proceeds raised at listing. After its IPO, Blue Moon's cash and cash equivalents jumped from HK$690 million in the prior year to HK$10.921 billion. That balance has shrunk every year since; by the end of 2025, it stood at HK$3.605 billion. The latest interim report does not disclose cash flow details, but the figure is likely still declining.

Over the past five years, Blue Moon has recorded net cash outflows every single year. Given its current dividend policy, if cash flow does not turn positive soon, the remaining reserves may not last much longer.

HK$17.8 Billion in Marketing vs. Just Over HK$200 Million in R&D

Compared with its lavish spending on marketing and dividends, Blue Moon's investment where it mattered most has been remarkably thin. The contrast between sales and research expenses is especially stark.

From 2021 to 2025, Blue Moon's R&D expenditures were HK$36 million, HK$43 million, HK$52 million, HK$44 million, and HK$45 million respectively-a five-year total of approximately HK$220 million-against cumulative sales expenses exceeding HK$17.8 billion over the same period.

By comparison, global consumer giant Procter & Gamble spends roughly US$2 billion annually on R&D, with its R&D-to-revenue ratio steadily between 2.5% and 3.5%. Liby Group allocates about 3.2% of annual sales to research; with total revenue of RMB 21 billion last year, that translates to roughly RMB 672 million.

Even Shanghai Jahwa United Co., Ltd (600315.SH), with lower revenue than Blue Moon, has maintained annual R&D spending of around RMB 150 million over the past five years, reaching RMB 204 million last year.

This underinvestment in R&D has limited Blue Moon's product innovation. In its core laundry care segment, which accounts for nearly 90% of revenue, the best-selling products across platforms remain its classic line launched in 2008 and the Supreme brand from 2015, followed by the sports detergent introduced in 2022. Beyond these, Blue Moon has not produced a new hit in the category for years.

For now, Blue Moon's position as the leader in laundry detergent remains intact: Euromonitor data shows it held a 27.9% share of the domestic laundry detergent market in 2024, ranking first for multiple consecutive years. According to 2026 C-BPI data, Blue Moon has ranked first in both laundry detergent and hand soap categories for 16 straight years.

Yet the company has long relied on a single revenue stream: more than 80% of sales come from laundry care products. That business is now shrinking, and its growing product lines remain too small to carry the company.

The interim report shows that in the first half of 2026, revenue from laundry care products was HK$2.4997 billion, representing 86.7% of total revenue but down 5.3% year-on-year. Household cleaning revenue was HK$164.3 million, down 8.8%. Personal care products rose 1.5% to HK$218.8 million, accounting for just 7.6% of total sales.

Competitors are chipping away at the detergent market through product innovation across niches. In the concentrated detergent segment, brands including Liby, Tide, and OMO all launched their own concentrated or ultra-concentrated products during 2023-2024, eroding the first-mover advantage of Blue Moon's machine-wash concentrate. Liby, for instance, has been betting on fragrance-focused concepts, using scented detergents to enter the premium segment and attract younger consumers with differentiated offerings.

As consumers increasingly prioritize natural ingredients, biodegradable packaging, and multifunctional care, Blue Moon's product updates have largely centered on scent or packaging tweaks, lacking breakthroughs in formulation, environmental performance, or technology. This has caused the company to miss new opportunities: the laundry pod market expanded from RMB 1.4 billion in 2020 to nearly RMB 7 billion by 2024, yet Blue Moon has not entered the category at all.

Blue Moon's problem is not a lack of market opportunity or money-it is that, once flush with cash, the company chose to spend it chasing fleeting traffic and appeasing shareholders.

Blue Moon may still hold its title as the number one laundry detergent brand for now. But unless it can develop new hit products and identify its next growth engine, the reserves accumulated over more than two decades of success will eventually run out.