Wen | Li Xiaoxia
36Kr exclusively learned that the Internet cake brand "Happiness Cake" has completed a new financing of 100 million yuan, led by the old shareholder Yashang Capital, and followed by the new investors Chunjian Capital and Fushan Investment (an investment company under Yunda). Previously, Happiness Cake had received multiple rounds of financing from institutions such as Huaxing New Economy Fund, Meituan Dragon Ball, and Asia Merchant Capital.
Regarding the use of this round of financing funds, Yuan Huohong, chairman of Happiness Cake, told 36Kr that it will be mainly used for the supply chain layout and digital construction of the "county town and village plan", and the listing plan will be launched in the future.
Founded in 2008, Happiness Cake was originally positioned as an offline baking chain brand, and in 2013, it transformed into an Internet cake, and ensured that the cake was freshly made and delivered on time by establishing the "central factory + satellite factory + self-built cold chain logistics" model. According to official data, Happiness Cake has covered more than 300 cities across the country, with more than 22 million private domain users.
Happiness cake, courtesy of the interviewee
In recent years, the baking industry has developed rapidly, the market has exceeded 300 billion, and when new baking brands have emerged in the track, many old baking brands have fallen into a downward trend.
In the confrontation between the old and new forces, how does the 13-year-old brand of Happiness Cake break through? Yuan Huohong and 36Kr shared the layout and planning of Happiness Cake.
Build a supply chain system and accelerate the expansion of the sinking market
Before the transformation into an Internet cake, Happiness Cake has opened more than 40 stores in Shenzhen and has become a supplier of more than 300 supermarket chains in CR Vanguard.
With the rise of the mobile Internet and the continuous improvement of various new commercial infrastructures, the Internet cake has ushered in development opportunities, which has also caused a certain impact on offline baking brands. In 2014, after reviewing the situation, Yuan Huohong closed offline stores and opened the road of online transformation of happiness cakes.
Compared with offline stores, the Internet model not only eliminates the cost of store rent, but also facilitates the large-scale expansion of brands. Therefore, at the time of transformation, Happiness Cake has determined the development path of being a national brand, aiming at the mid-end market, focusing on cost performance, and differentiating in brand positioning and production mode.
In terms of production mode, on the basis of the central factory, Happiness Cake has also built a multi-point distributed satellite factory with a distribution radius of 3 kilometers to ensure that the cake is fresh and fresh with a standardized production process, and to achieve punctual delivery within 2 hours. The fully automated cake semi-finished product production center built by Happiness Cake in Yancheng, Jiangsu Province, has been put into operation in October 2019, and 7 provincial capital secondary storage centers have been established across the country.
Happy Cake Production Center Diagram, courtesy of the interviewee
In terms of digital construction, Happiness Cake has been upgraded from supply, production, warehousing, logistics, to operation. Its intelligent video data management system created in cooperation with Alibaba Local Life, the background "cloud supervision", intelligently identifies abnormal behaviors and grasps fears through the system, such as the staff does not wear masks correctly or the dress code is not standardized, and the disinfection lights are not turned on at the specified time, etc., and pushed to the management personnel in real time to urge them to rectify immediately. Through real-time full-chain monitoring, food safety is guaranteed while reducing management difficulties and costs.
In terms of urban expansion, Happiness Cake adopts the "Cake Cloud" partner model. For partners in different cities, Happiness Cake will provide unified site decoration, technical training, brand operation, supply chain and IT technology system support.
Yuan Huohong told 36Kr that at present, China's baking industry is relatively scattered, most of them are regional brands, and have not yet run out of a real national brand. The reason is that to build a national brand, there are two problems to be solved: one is the coverage and efficiency of the supply chain, and the other is the radius and efficiency of standardized management. In his view, in the past few years, Happiness Cake has built a supply chain system covering the whole country and a full-link digital management system.
Among the more than 300 cities that have been opened, the coverage rate of prefecture-level cities in the third tier and above has reached more than 80%, including remote areas such as Lhasa in Tibet, Urumqi in Xinjiang, Heilongjiang, and Jiamusi. In 2021, Happiness Cake put forward the development strategy of "County And Town Rural Plan", which will expand the business scale with prefecture-level cities as the general hub and districts and counties as the general port. By 2024, it plans to expand to more than 80% of the counties in China, covering more than 2,000 county-level cities across the country.
Online and offline integration, high-frequency, low-frequency categories full coverage
As online traffic becomes more expensive, Happiness Cake has also begun to try to return to offline and explore lower-cost traffic sources. Happiness Cake has opened more than 200 new retail stores, mainly concentrated in Shenzhen, Guangzhou, Dongguan, Chengdu, Kunming and Changsha.
In terms of product categories, Happiness Cake has achieved full coverage from birthday cakes, bread, afternoon tea, Shenzhen specialty packaging souvenirs to ready-made tea drinks. Yuan Huohong emphasized, "Cakes belong to the high-price/low-frequency category, and low-price/high-frequency categories such as bread and afternoon tea can meet diversified needs and improve user retention."
Happiness Cake Afternoon Tea, courtesy of the interviewee
Happiness Cake has penetrated into the community, business circles, office buildings, occupying daily and festive consumption scenes. In terms of channels, in addition to the expansion of offline physical stores, online has opened up a number of mainstream platforms such as public accounts, Meituan, Ele.me, and Taobao. According to Yuan Huohong, online orders for cakes account for more than 95%; bread and drinks account for 40% online, and offline accounts for 60%.
Guo Rui, a partner at Asia Business Capital, said that although happiness cake has experienced the adverse effects of the epidemic in the past three years, relying on the company's strong management team, timely adjustment of the company's business strategy, and continuous strengthening in the supply chain, customer service system, digital construction, etc., the company has still achieved steady growth in recent years. Therefore, after Asia Commercial Capital invested in happiness cake for the first time in 2018, this round of continuous increases.
Chen Qingsen, CEO of Chunjian Capital, said that the current market size of China's baked food industry is more than 200 billion yuan, but it is extremely fragmented. Happiness Cake has established a national brand and channel, with its brand potential, product research and development capabilities, information management capabilities and supply chain advantages, has the opportunity to occupy a very large market share. "We are very optimistic about the development of happiness cake."
Editor| Qiao Qian