Originality makes business more valuable.
Yang Yinfen, the new chairman and general manager of Liangpin Store, shocked the industry. Few helmsmen directly disclose the problems faced by enterprises, and they have just taken office. At the same time, good shops announced a large-scale price reduction, but related products were mainly concentrated in online stores.
Author | Lei Yanpeng
Editor | Chen Fang
Operation | Liu Shan
The new coach slashed the price.
"At the moment, what is in front of us is not only the problem of living hard, but the problem of living or not. The good shop has 11,000 employees, 11,000 families behind it, and thousands of enterprises and families in the supply chain. "
This is the description of the company’s current situation by the new helm of A-share snack king Liangpin shop. Recently, Yang Yinfen, the new chairman and general manager of Liangpin Store, issued an open letter to all employees, officially opening the first round of reform after taking office. Like his predecessor, Yang Hongchun, Yang Yinfen is a member of the founding team of Liangpin Store, and they are the actual controllers of the company. They are also old colleagues in Kelon Electric Appliances.
In addition to the open letter, another fire after Yang Yinfen took office burned to the price.
Good shops told the "market circle" that "this is the largest price reduction of the company in 17 years, with an average price reduction of 22% for 300 products", mainly focusing on snacks with cost optimization without affecting quality and high repurchase rate, and the overall principle is "price reduction without degrading quality".
"Macadamia nuts, pine nuts, pistachios, cashews and other nuts, meat snacks such as pork jerky, duck neck and roasted sausage, and explosions with high repurchase rate such as spicy strips, dried beans, bread cakes and melon seeds are now the main force to reduce prices." The good shop said.
In the open letter, Yang Yinfen mentioned that this reform is mainly based on "three views":
Looking at the industry, online consumption flow shifts, competition intensifies, various offline snack patterns bloom in an all-round way, and a series of new species appear.
Looking at users, consumption has entered a rational era, consumers’ money bags have become tighter, and the consumption levels of different groups of people have become more differentiated and distinct. How to meet the needs of different users is also a test before them. In addition, the reality that consumers think that good shops are expensive also shows that the price of their products must be more close to the people.
Look at yourself, with the company’s development for 17 years, the organization is bloated and overstaffed, and bureaucracy and departmentalism have emerged. Externally, the development is sluggish, and the scale and profitability are declining.
This open letter shocked the industry. Few helmsmen directly disclose the problems faced by enterprises, and they have just taken office.
In his open letter, Yang Yinfen repeatedly stressed that the core purpose of the transformation of good shops is only one: to return to the image of good shops next door and move towards the route of good quality and close price. "No change, we really may lose our qualification at the poker table."
Good shops have previously positioned themselves as "high-end snacks", so this time, the price reduction has a great contrast to the market. Some consumers said: "Consumers are becoming more and more rational, and the brands that cut prices are sober."
After the price reduction was announced, the share price of the good shop also responded.
▲ (the stock price chart since the listing of the good shop. Source/Straight Flush)
During the three trading days from December 1st to December 5th, the share price of Liangpin Store rose continuously, and the daily limit of the first two trading days continued. This is really rare for a good shop. In the previous nine months, its share price has been "halved".
However, this price adjustment will not have much impact on the short-term performance of good shops.
Good shops told the "city circle" that the products with adjusted prices were mainly sold in offline stores, with the adjustment range of 10%-47%. In the first half of 2023, the operating income of these products in offline stores accounted for 13.5% of the total operating income.
In the first half of 2023, the revenue of good shops was less than 4 billion yuan. In other words, the revenue of this part of price adjustment products in the first half of the year was less than 540 million yuan.
This also answered some consumers’ doubts: "It is said that the price has been reduced, but why is it not obvious?"
For example, the good shop said that the large-opening macadamia nuts (400g) on sale dropped to 29.9 yuan/can; The pork jerky with the first order rate is the key product of this price adjustment, and the price of classic pork jerky is 65 yuan/kg; The price reduction of some products is achieved through membership price.
However, after the price reduction of some products in offline stores, the price advantage is not obvious compared with the e-commerce platform with long-term promotion activities. On December 7, in Tmall Supermarket, the discounted price of the large-opening macadamia fruit (400g) in the good shop was 27.9 yuan/can; In the flagship store of Liangpin Store in Pinduoduo, the large-opening Hawaiian fruit is 29.8 yuan/can after 10 billion subsidies, and it is 500g g.
Development encounters bottlenecks.
Three squirrels, good shops and herbs were once the three giants of online celebrity in the leisure snack industry.
Among them, the establishment of good shops was the earliest. Baicaowei was founded in 2007, Three Squirrels in 2012, and Liangpin Store opened its first store in Wuhan in August 2006.
In August 2016, Baicaowei was bought by you for 960 million yuan, and it was listed by taking shortcuts. After many times of listing, three squirrels finally landed in the capital market in July 2019; In February 2020, the good shop realized its dream of listing, calling itself "the first share of high-end snacks".
To talk about the first share, in fact, the share that came to Iraq in October 2016 is the "first share of snacks" in China. However, in recent years, online celebrity has been completely overtaken by the younger generation, and compared with the Big Three, its light has long been dim.
On the eve of the listing of the good shop, Baicaowei "remarried" Pepsi for $705 million, and the story of Baicaowei was lost in A shares. However, the three squirrels and the good shop have been chasing each other.
In 2022, Liangpin Shop finally overtook three squirrels (with a revenue of 7.293 billion yuan) with a revenue scale of 9.44 billion yuan, and became the leader of the snack industry.
▲ (data source /Wind)
There is a very important premise that a good shop can surpass three squirrels-three squirrels have had a bad life in recent years. As early as 2019, the revenue of the three squirrels exceeded 10 billion. However, with the dissipation of the first wave of e-commerce dividends, the development of the three squirrels encountered bottlenecks. From 2019 to 2022, the revenue continued to decline.
From 2019 to 2022, although the revenue of good shops continued to grow, it was actually not much better than three squirrels-in 2022, the revenue only increased by 1.24%. Moreover, the problems of good shops have begun to be exposed.
In the first three quarters of 2023, good shops realized operating income of 5.999 billion yuan, down 14.33% year-on-year; The net profit of returning to the mother was 191 million yuan, a year-on-year decrease of 33.43%. Among them, the revenue in the third quarter was 2.013 billion yuan, down 4.53% year-on-year; The net profit of returning to the mother was 1,998,400 yuan, a year-on-year decrease of 97.88%.
So far, the revenue of good shops has declined for five consecutive quarters, while in the past five quarters, the net profit has declined for three quarters. In 2022, the net profit of good shops was 334 million yuan, less than that in 2019.
The current situation of good shops-it’s difficult.
Yang Yinfen wrote in an open letter: "I said in August this year that the 17-year-old good product is facing the most difficult challenge since it started its business. At the moment, this challenge is still intensifying. In order to stand out from the encirclement, good products must fade away and be reborn like a soaring eagle. "
From the perspective of sales model, good shops are mainly divided into online and offline channels. Among them, online sales are mainly through e-commerce, while offline sales are mainly divided into direct retail business and franchise business.
In 2021, the revenue of its e-commerce business accounted for more than 53%. However, from 2022 to the first three quarters of 2023, the revenue of e-commerce business continued to decline, accounting for less than 45% in the first three quarters of 2023.
For the decline in the third quarter performance, Liangpin Store explained that the overall sales scale of the company fluctuated due to factors such as the stratification of consumer demand and the differentiation of online platforms and users. At the same time, the company’s profits fluctuated in the third quarter due to the increase in labor and rental expenses and the fluctuation of gross profit margin due to the newly opened direct stores.
Leisure and snack industry has low entry threshold, low industry concentration and serious homogenization. In addition, many snack giants mainly use OEM mode, which leads to the low profit rate of the industry.
In the first three quarters of 2023, the gross profit margin of good shops was 28.54%, but the net profit rate of sales was only 3.18%. The net profit rate of good shops has shown a downward trend in recent years, from 4.53% in 2019 to 3.54% in 2022.
Snacks are not easy to sell, and the revenue is declining. At the same time, online traffic is shifting and the cost is getting higher. The new offline model is rising, and new stores are opened, and the cost investment is getting longer. The profit margin, which is not high, can’t stand much tossing.
Under the pressure of performance, while optimizing the cost, it seems to be a "forced" action to make the product price "more close to the people".
A new round of "fighting" begins.
Consumption has entered a rational era, and the province and the flower are the mainstream consumption views of generation Z. Various research reports are proving that the consumption of young people is returning to "rational pragmatism".
At this time, good shops labeled as "high-end snacks" have become somewhat out of date.
At the beginning of 2019, Liangpin Store held a high-end snack strategy conference. At that time, it also spent a lot of money to invite celebrity endorsements. While shouting "high-end snacks", the good shop also said that it would "abandon the price war".
Yang Hongchun, then the chairman of Liangpin Store, said: "The reason why we launched the high-end strategy is actually to avoid the homogenization competition. We want to take their different development paths. Among all the pursuits, there are price-oriented, quality-oriented and brand-oriented. We choose the demand to enter the high-end quality."
Behind the high-end transformation of good shops is the consumption upgrade that people are talking about at that time, and the leisure and snack industry is also in a growth period.
The snack industry in China started from a bag of melon seeds, to the rise of large and small brands, and then to online celebrity brands to compete for traffic. At that time, it was hoped that high-end products would jump out of the price war of homogenization from the positioning, but now the industry is fully competitive and the environment has changed.
On November 28th, Liangpin Store announced that Yang Yinfen was elected as the chairman, and at the same time, he was re-appointed as the general manager of Liangpin Store. Yang Yinfen used to be the director and general manager of Liangpin Store. In September 2022, he resigned as the general manager when he became the vice chairman.
With this "coaching change", Yang Hongchun, one year older than Yang Yinfen and born in 1973, stepped down as chairman and general manager.
Yang Hongchun and Yang Yinfen are both members of the founding team of Liangpin Shop. Since its listing in 2020, the actual controllers of Liangpin Store have been Yang Hongchun, Yang Yinfen, Zhang Guoqiang and Pan Jihong.
▲ (Property right and control relationship diagram between the good shop and the actual controller. Source /2022 Annual Report)
After the change of the helm, the strategy is also changing.
Yang Yinfen said that the good shop will launch a new round of reform around the theme of "strengthening business innovation and improving operating efficiency in an all-round way", with the aim of making product prices more close to the people on the basis of adhering to "good products". The so-called "price reduction does not reduce quality". "This is also a major change in the company’s operations."
This is somewhat similar to the current strategy of the old rival three squirrels. Three squirrels put forward the strategy of "high-end cost performance" at the end of 2022. Three squirrel related people told the "city boundary" that the "high-end cost performance" strategy began to work together in March 2023, and at the same time, some products began to reduce prices one after another.
In other words, the three squirrels have already started to reduce their prices.
The three squirrels have encountered a series of problems in the past few years, especially in 2022, and their performance has fallen sharply. In the words of Zhang Liaoyuan, chairman and general manager of Three Squirrels, "last year was a heavy blow". In an interview with Red Star News, Zhang Liaoyuan concluded that the core reason for being hit hard was that in the process of e-commerce evolution, the three squirrels did not completely keep up. The three squirrels were firmly rooted in the era of shelf e-commerce, but they did not quickly enter the emerging e-commerce.
As an online brand, the three squirrels rely on third-party e-commerce online, and opening stores offline is not smooth.
By the end of 2020, the three squirrels had 171 food shops and 872 alliance shops. By the end of the first half of 2023, there will be only one catering store and 316 alliance stores. In 2022 alone, 118 restaurants and 431 alliance stores were closed. Behind this, it is rebuilding the offline store-the transformation system to the community snack shop.
The three squirrel community snack shops mainly sell their own brands. Different from the original stores, they focus on "cost performance" and are mainly opened in cities below the second tier. People related to the three squirrels told the "city boundary" that since June, there have been more than 150 community snack shops in Anhui, Jiangsu and Zhejiang, and they will expand to the whole country in the future.
Low price or cost performance has become the focus of the snack industry.
According to the Survey of Global Consumer Insights in 2023 released by PricewaterhouseCoopers, considering the impact of the current economic environment and the potential cost of living, one of the most significant changes in consumer behavior is to turn to more pragmatic and rational purchase decisions. Consumers pay more attention to the quality and value of products, and at the same time make full use of promotional activities to compare the prices of different sellers.
Doing raiders, comparing prices, and finding coupons have gradually become people’s habits before shopping.
More and more rational consumers are more and more sensitive to prices. In the snack industry, it is no exception.
In recent years, temporary food stores, snack discount stores and discount-style snack stores have risen rapidly, and the most remarkable feature of these stores is cost performance. Especially, the mass-selling snack shops represented by busy snacks, Zhao Yiming snacks, and snacks are famous, with the help of capital, have taken advantage of new opportunities and expanded vigorously, which has brought great impact to the snack industry.
In November, snacks and snacks in Zhao Yiming were busy merging. Prior to this, in October, Liangpin Store announced its withdrawal after investing in Zhao Yiming Food through a wholly-owned subsidiary for half a year. Recently, Liangpin Store said that it had sued Zhao Yiming Food because it deliberately concealed the company’s major events, namely the above merger, during the cooperation period between the two parties.
Right or wrong, there is no conclusion.
However, in 2022, the good shop also laid out a discount brand-snack stubborn home. In mid-November, the good shop said that the stubborn snacks focus on the Hubei market and plan to open 500 new stores this year.
The snack industry is turning to the battle of cost performance or price. Behind this, the competition is the cost advantage under quality.
By optimizing the supply chain, circulation, packaging, channels, etc., we can reduce costs and increase efficiency, and then reduce prices. This is the long-term solution for the three squirrels of the old online celebrity brand and the good shops, or for the newly rising Zhao Yiming and the famous snacks.
On the snack track, the past two years have been very lively, with expansion, overtaking, merger, store closing, opening, reduction, price reduction, transformation, change … and defense and counterattack. The industry has entered a new cycle, and the "fight" about prices has begun.
Zhang Liaoyuan said that the current snack food field is like the "Warring States Period".
In this battlefield, the crowds are competing and the smoke is filled, depending on who wants to sing and who will appear.
Originally produced in the city, please do not reprint it without authorization.
E-mail for communication suggestions: gaojian@boyamedia.com
Original title: "Good shop is in a hurry"
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