"You love me, I love you, Honey Snow Ice City Sweet Honey." This year, this brainwashing song hovered over the Internet, mobile phone ringtones, the streets of The Ice City of Mi Xue and people's minds.
In the past few years, Michelle Ice City is undoubtedly the fastest milk tea brand in China. Not only is the limelight strong and frequently out of the circle, but also has long occupied China's third- and fourth-tier cities, with stores in 31 provinces and municipalities and some Southeast Asian countries, and the listing rumors are continuous. As of now, there are more than 16,000 stores nationwide. Compared with its peers, there are more than 800 xi teas in the high-end tea industry, nearly 700 teas in Naixue, and COCO and a little bit more similar to Michelle are also in the scale of 3 or 4 thousand.
Why can Mi Xue Ice City open a store at such a high speed in the past two years? And how to ensure the management and control of the store? Two CEIBS EMBA alumni of Michelle Ice City revealed the strategy and tactics of Michelle Ice City.
The story of Zhang Hongchao and Zhang Hongfu, the founders of Mi xue ice city, is like a small town youth entrepreneurship record, repeatedly defeated and battled, but still with the tenacious will to change their own destiny, and the persistence of the most simple belief, insisted on the turn of fate.
"Many fans jokingly call Michelle Ice City the savior of slum girls, because its founder is a boy from the slum." The brothers grew up in the countryside of Kaifeng, Henan, and Zhang Hongchao came to Zhengzhou in 1996 to "start a business" while going to school, and in 1997 opened a stall called "Cold Stream Shaved Ice", which is the predecessor of Mixue Ice City. Even if it is painstakingly managed, it is still difficult. From its founding in 1997 to 2003, it has experienced at least six store demolitions.
The real success story of Michelle Ice City starts with ice cream. In 2005, Zhang Hongchao ate an ice cream called Rainbow Hat, but the price was not cheap, costing 18 yuan. He thought to himself, "It's delicious, but how much does it cost?" Nothing more than milk, sugar, eggs and flour. He bought a second-hand ice cream machine, through various information retrieval, taste modulation, concocted a similar taste of ice cream, so that the student party can afford to eat, according to the cost reversal method, he set the price as 1 yuan.
This extremely cost-effective ice cream quickly became popular in Zhengzhou, and also made Michelle Ice City gain a firm foothold and quickly opened a number of stores. Even today, more than 10 years later, the ice cream called Magic Sky Crispy Crunch has only risen to 3 yuan in price. But Michelle Ice City employees will also explain more truthfully: "The cone is made of eggs and flour, not the kind of wafer barrels of KFC and McDonald's", which obviously costs more.
"Extreme cost performance" is engraved into the DNA of Michelle Ice City. Ice cream 2 or 3 yuan, lemonade 4 yuan, milk tea does not exceed 10 yuan. Compared with the 20 or 30 yuan a cup of xi tea, the price list of Honey Snow Ice City is so "incredible", in each of Honey Snow's B station videos, there are countless netizens who hit the "conscience" on the public screen. For the student party and small-town youth, to have "milk tea freedom" is to have real happiness every day.
"The boy from the slum" gave Mi Xue a unique gene, and insisting on "high quality and parity" was also written into the mission of Mi Xue Ice City. There are also milk cap tea in its products, because of its high cost, although the price is only 10 yuan, but the sales volume is not ideal. "Michelle's customers are looking for cost-effectiveness, so we know what kind of products to build for them." Xi Yanhe, assistant to the president and chief information officer of Michelle Ice City, said.
Generation Z has called for Michelle crazy, so that Honey Snow Ice City has gained super popularity, but how to expand rapidly and get out of Henan is closely related to The business model, operation method, supply chain capability and corporate culture of Honey Snow Ice City.
In Henan's highly called Mixue Ice City, the first step outward is the six central provinces.
At the end of 2014, the number of stores in Michelle Ice City has exceeded 1,000. Xi Yanhe introduced that The business model of Michelle is "B2B2C", Michelle is the big B-end, the franchisee is the small B-end, and then serves the end consumer through one franchisee after another. The products are uniformly supplied to franchisees, including: raw materials, packaging, equipment, store daily necessities, consumables, etc., all of which are provided by the company to sell to franchisees and obtain benefits. Therefore, the more franchisees, the higher the profit.
If the franchise fee threshold is high, the cost of franchisees is high, so Michelle does not set a high threshold for franchise fees at the beginning, and franchisees who open stores in other places also give the greatest preferential treatment in logistics. From 2014 to 2015, Michelle promulgated two new policies, one is the six provinces in the central region free of franchise fees, the so-called six provinces in the central region are around the six provinces of Henan, including: Hubei, Anhui, Shandong, Hebei, Shaanxi, Shanxi, which makes Honey Snow quickly blossom everywhere in the middle; the second is logistics, a Zhengzhou in China, no matter where the franchisee opens a store, as long as the starting conditions of the store are met, Honey Snow's supply products are free of logistics fees.
In addition, unlike other tea brands, Michelle adopts a single-store franchise model. According to Lu Xiaofei, the director of the Michelle Business School responsible for training, the cost of a store is about 350,000, including rent, equipment, products, employee salaries, etc., and can be returned within a year through calculation. This makes many people who have the dream of opening a milk tea shop have a "boss dream" that can be touched.
Cost-effective products, brand images that occupy the minds of users, low franchise fees and start-up capital, the superposition of these attractions makes people who want to join Michelle Ice City endlessly. According to Xi Yanhe's recollection, in the past few years, people who have come to join every day have "surrounded the company with water." Since then, Michelle has embarked on a journey of opening and hanging, expanding rapidly.
In the face of rapid expansion, Michelle has to solve two problems, one is that the upstream supply chain capacity must keep up, and the other is that the downstream franchisees must be standardized, which relies on training and management. "Training is the source, allowing a brand to quickly and accurately deliver consistency from all levels of concept, thinking, execution and so on." Xi Yanhe said.
In the upstream industrial chain, Michelle has established its own "base area" - Sichuan's lemon capital Anyue and Yunnan coffee bean base, and signed a guaranteed purchase agreement with local farmers, that is, whether the future price of coffee and lemon rises or falls, it rises according to the market price, and it falls according to the guaranteed price. "Like in the movie 'Arriving Home at One Point,' why would farmers grow riskier coffee beans without a bottom-up agreement?" Xi Yanhe said. With such a large customer as Mixue, local farmers do not have to worry about market risks, and at the same time, Mixue can also ensure the stability of supply.
Downstream, in order to ensure standardization, training must be more uniform. Wen County in Jiaozuo City, Henan Province, is the birthplace of Taijiquan, in 2019, Mi Xue Bingcheng built a campus here, allowing all franchisees in the country to study here in a closed manner, this campus is called "Mi Xue Shang Xue", similar to the enterprise university of large companies, the school has a teaching building and a practical training base, covering an area of 50 acres.
"The establishment of schools is also a necessary development process after the scale is expanded." Today's Michelle stores have spread across 31 provinces and municipalities, and the employees of all stores together are close to 80,000. In fact, There was no systematic training in the early days of Michelle, "one or two hours of theoretical classes, to store practice for 3 days" ended, but by the end of 2014, the number of Michelle's national stores has exceeded a thousand, "many companies fell on chain operation and management, products are inconsistent, services are inconsistent, and finally full of loopholes." In order to avoid overturning the ship in the same ditch and improving the efficiency of standardization, Honey Snow Ice City is first of all to increase the intensity and speed of training.
The training system that Michelle is now establishing is called "6+5+2", and all franchisee owners and store managers who join Michelle need to participate.
The first is a 6-day closed training at Themixue Business School in Wenxian County, including two parts: theory and practice, and classes are held every day from 8:30 a.m. to 6 p.m. These people who came to Mixue from the north and south of the world and wanted to open a milk tea shop were disrupted and lived in a dormitory with bunk beds for 6 people. Lu Xiaofei said that at present, the average age of all the operators of the Michelle Ice City store is 23 years old. Reluctant to work, Gen Z lies in Michelle's dorm bed thinking about how to be their boss.
The training is held every 3 days, and each batch ranges from 200-400 people, that is, 2000-4000 people are trained in a month. Such large-scale batch training is one of the important reasons why Mi Xue Ice City can be rolled out nationwide in a short period of time.
After the closed training, all trainees will be assigned to 93 training stores distributed across the country for a 5-day practical training and 2-day online tutoring, which are preconditions for store opening.
In fact, training has always run through all departments and levels of Mixue, and the grassroots Mixue compares herself to the "Eight Roads of The Soil", "We rely on our original intentions and instincts to do things, but we want to transform into a regular army through continuous learning."
In addition to internal training, the company regularly organizes senior management teams to visit and learn from large companies at home and abroad, including Huawei, Taobao, Starbucks headquarters in the United States and 7-11 in Japan. At any cost, let the top managers accept a more systematic management learning. This year, Xi Yanhe and Lu Xiaofei chose to enroll in the CEIBS EMBA, and they hope to improve their professional management capabilities and enhance their global vision through systematic learning. Xi Yanhe said.
The rapid development in a few years has made the ordinary and diligent "struggling youth" (Michelle's employee shirt slogan) who joined Michelle first become managers.
For example, the current general manager of the Michelle Ice City Business Group was initially responsible for the back kitchen of the restaurant; the purchasing director responsible for billions of annual cash flows was once just an ordinary store clerk. In the past few years, there are no people in the management team with prestigious universities, study abroad backgrounds and overseas work experience, but Michelle is already a tea brand that has gone abroad, opening more than 200 stores in Vietnam. "The company grows and develops, and it must need people with a global vision. Or headhunters digging people to parachute in, or cultivating our own children and soldiers, we choose to cultivate the children and soldiers who have struggled with Michelle. Lu Xiaofei said.
Different from the original situation where one person can support a store, the company's rapid development exceeds everyone's cognition and management experience, "the speed of growth sometimes can't catch up with the speed of the company's development," Lu Xiaofei admitted. Honey Snow is like a small eagle with lofty ambitions, when flying high, it will inevitably encounter a blizzard, and only after ups and downs can it be full of wings.
In 2016, with the rapid expansion of the store in Mi xue ice city, the store quickly broke through the 3,000 mark. This also brings a series of hidden dangers, including supply chain pressure, different suppliers can not be unified in quality, standards can not be landed and so on.
"Upstream suppliers have just adapted to the preparation of thousands of stores, followed by the preparation of tens of thousands of stores, this difficulty can be imagined; if the reserve of raw materials are discarded next year, how to solve the capital occupation; logistics, in the past, a warehouse can serve the national stores, now there are more than 20 in the country, the future needs more." Lu Xiaofei explained that these problems are interlocked and involve the whole body.
"Honey snow is like a big tree, this big tree grows too fast, its root system is not firm enough, so we hope to be able to calm down, stop, let us root system more firmly, optimize and manage many problems that were exposed because of too fast development." Xi Yanhe said that the internal slowdown that occurred in 2016 was named "Root action", which made Mixue as a whole slow down for a year.
After 2017, Michelle returned to the "highway", and when it broke through 5,000 stores in 2018, there was a product prediction error, "the product and the market are disconnected," Lu Xiaofei recalled, when The fist product launched by Michelle was caramel horseshoe milk tea, when this confident product was introduced to the market, the market did not buy it. "First of all, the horseshoe has different names in different parts of the country, and the recognition is not high; secondly, the horseshoe does not absorb sugar, and after being preserved through canning, all the sugar is left in the canned sugar water, and then it is made into milk tea, resulting in an extremely sweet taste of milk tea." Lu Xiaofei reflected.
Because there is no other spare product that can compete with the popular fruit tea in the market in the same period, coupled with the pressure of upstream raw material inventory and the reserve problem of the supply chain, this "critical hit" also made Mi Xue Bingcheng determined to reform the product.
The most recent time more stressful was the food hygiene incident that was exposed in May. Due to the behavior of the three stores to modify the best tasting period, the clouds of The Honey Snow Ice City are shrouded. "The food safety problem of a store is a loss, and the reputation of more than 16,000 stores is affected." Xi Yanhe introduced that the company quickly set up a food safety committee within the company, directly closed the stores involved in the case at the first time, and carried out a one-month self-inspection action. "Food safety is actually the lifeblood of catering enterprises, especially chain catering enterprises."
"If training is just about setting standards and passing on standards, landing standards requires a strong management system." Xi Yanhe believes that "the core standard of the chain industry is to ensure the unified output of products and brands, so that consumers' experience and feelings are consistent." ”
At present, There are 800 market supervisors in charge of more than 16,000 stores across the country, which is equivalent to more than 20 stores managed by each market supervisor. In addition to doing a good job of supervision and checking whether the SOPs of each store are in place, the main thing is to assist the store operation. In addition, the headquarters also has an audit team, which is ready to fly to inspect stores across the country.
"Real people are real products, don't take shortcuts and don't deceive people." These extremely simple 14 words are the values hanging on the wall of Michelle's headquarters, "determining how far a company can go, and in the end it must be values." Xi Yanhe believes that if a company does not have a clear vision and values, eventually franchisees will return to the level of "business" to make instinctive behavior, with short-term economic interests as the guide for everything.
An eternal challenge is whether this simple value can be implemented in more than 16,000 stores and nearly 80,000 store employees.
As Honey Snow snowsweets, it also shoulders more corporate social responsibility. For example, during the epidemic period and the exceptionally heavy rainstorm disaster in Henan in July this year, the base camp in Henan's Mixue was the first to donate a large amount. Compared with its low-priced products, Michelle is once again on the hot search, and netizens vividly describe, "Like the older generation, saving a lifetime of savings, but the country will definitely stand up for the first time when it needs it."
Although The challenges and storms of Michelle are always flat and up again, it seems that there are always good passers-by. "Simple, focused, and respected century-old brand." It is the corporate vision of Michelle Ice City, Xi Yanhe believes that "a respected company must be based on the common recognition of consumers, employees, suppliers, franchisees, peers and society." "Passers-by are not as simple as "cute" and "cheap". "Today's Michelle Ice City is just 24 years old, still a youth, and there is still a long way to go in the future."
Some people think that the Honey Snow Ice City, which is about to open 20,000 homes, is not already saturated with the market. Xi Yanhe does not see it this way, there are 23 million people in Taiwan, the birthplace of milk tea, and there are 30,000 milk tea shops, which is equivalent to 1 milk tea shop for every 800 people. "Taiwan is a microcosm, and the mainland market is far from saturated." Compared with other endless milk tea categories on the market, "Michelle believes that milk tea will eventually return to its most essential form, become a part of people's daily lives, and drink a cup on any street corner." ”
The pictures related to this article are authorized by the alumni's company and The Heroo Gallery, if you need to reprint and use, please contact its authorization.
Edit | Jiang Yannan
Want to know more? Poke the Central Europe through train below, Xiao Ou is waiting for you!
Consult CEIBS Courses: Form | CEIBS
中欧官网：The Best Business School in China | China Europe International Business School