Reporter | Ma Yue
Edit | Zan Huifang
1
The first company in the bird's nest industry to be ready to go public appeared.
Recently, the main board IPO of Xiamen Yanzhiwu Biological Engineering Co., Ltd. (hereinafter referred to as "Yanzhiwu") was accepted by the Shanghai Stock Exchange, and the sponsor institution was CITIC Construction Investment Securities. According to its prospectus, Yanzhiwu intends to issue no more than 28.9 million shares, and plans to raise 1.019 billion yuan, which will be used for the construction project of ecological industrial park, the upgrading and construction project of Yanzhiwu R&D center, the construction of marketing network and brand promotion, and supplementary working capital.
The company's history can be traced back to 1997, its founder and chairman Huang Jian founded SUNTAMA in Xiamen, and then opened bird's nest counters in shopping malls and pharmacies in various provinces and cities across the country, operating "Yan Bao Wing Pavilion". In 2002, the Yanzhiya brand was officially born.
From the performance point of view, Yanzhiya has grown steadily in recent years. According to the prospectus, from 2018 to 2020, Yanzhiwu achieved operating income of 724 million yuan, 951 million yuan and 1.299 billion yuan respectively; the revenue growth rate in 2019 and 2020 was 31.25% and 36.66% respectively. The net profit in 2018-2020 was 63.3066 million yuan, 78.6984 million yuan and 122 million yuan respectively, and the net profit in 2019 and 2020 increased by 24.31% and 54.74% respectively. In the first half of 2021, The operating income of Yanzhiwu was 707 million yuan and the net profit was 64.2547 million yuan.
The main business income of Bird's Nest during the reporting period was mainly based on ambient temperature instant bird's nest, fresh stewed bird's nest and dried bird's nest, of which ambient temperature instant bird's nest also included bowled "bowl swallow" series products and bottled rock sugar bird's nest series products. As the main product, the sales revenue accounts for more than 40% of the total revenue.
From 2018 to 2020, the comprehensive gross profit margin of Yanzhiwu was 51.76%, 48.55% and 48.65%, respectively, compared with 51.00% in the first half of 2021.
The "Bowl Swallow" product launched by Bird's Nest house in 2012 is the key to opening up the changes in the entire bird's nest industry. Since then, "instant bird's nest" has gradually become a new concept in the industry, and more and more large and small brands have entered the game.
Swallow House Bowl Swallow Image source: Weibo @ Swallow House
Before 2011, bird's nest products were mainly traditional dried bird's nest, and the overall market mostly followed the logic of gift wrapping, and personal consumption was relatively small. Eating bird's nest has to go through complex production processes such as selection, foaming hair, picking hair, simmering, etc., and the sales channels are also concentrated in physical stores, and the audience is basically concentrated in high-end people, which is also related to the positioning of bird's nest as a "luxury".
With the "blood bird's nest" counterfeiting incident in Malaysia in 2011, the entire bird's nest market fell to the freezing point, and the price of raw materials fell, which also gave birth to canned "ready-to-eat bird's nest" to the mass market.
Compared with traditional dried bird's nest, products that have entered the market in the form of ready-to-eat bird's nest, fresh stewed bird's nest, bird's nest flavored beverages, etc., meet the needs of low threshold consumption scenarios and moderate experience costs. Because bird's nest is actually a typical "high visibility, low awareness" product, the bird's nest industry has been able to grow rapidly, consuming the stock market of cognition, the efficient communication ability of e-commerce coupled with the low threshold of experience, which can quickly harvest a wave of "early adopter" consumers.
Bird's Nest Fresh Stewed Bird's Nest Image Source: Weibo @ Swallow House
According to the "2020 Bird's Nest Industry White Paper" released by the State Bird's Nest Committee, the scale of China's bird's nest consumer market will reach about 40 billion yuan in 2020. According to relevant data from the General Administration of Customs, from 2016 to 2020, China's bird's nest imports rose from 41.5 tons to 340.4 tons, an increase of 7 times in 5 years, showing explosive growth.
However, the bird's nest market has experienced a rather complicated situation in 2020: on the one hand, the sales of bird's nest have soared under the blessing of e-commerce and live broadcasting, and in addition to traditional brands such as Yanzhiwu and Tongrentang, a number of new consumer brands, including "Xiaoxian Stew"; on the other hand, it is the "fake bird's nest" incident of e-commerce anchor Simba that has triggered a huge public opinion boom, and then there are public doubts about the nutritional value of bird's nest itself.
At present, Yanzhiwu is still pursuing a sales strategy that combines online e-commerce platforms and offline physical stores. As of September 30, 2021, the company has a total of 605 offline physical stores in its direct operation and distribution channels, which has initially achieved nationwide coverage, and is the brand with the largest number of physical stores specializing in bird's nest products in the bird's nest industry.
With the rapid development of online e-commerce channels and the outbreak of fresh stew categories that are more compatible with the e-commerce model, from 2019, the proportion of online sales revenue of Yanzhiya to the main business revenue exceeded that offline channels.
The overall trend of the bird's nest market towards the popularization and even sinking market is also reflected in the business model of "price for volume" of Bird's Nest.
Judging from the data displayed in the prospectus, the ex-factory price of Yanzhiwu products has gradually declined. The factory unit price of bowl swallow in 2018 was 180.88 yuan, which fell to 158.86 yuan in the first half of 2021; in the same period, fresh stewed bird's nest fell from 134.55 yuan to 51.52 yuan; rock sugar bird's nest fell from 51.11 yuan to 42.46 yuan.
At the same time, the sales of Tsubame House have risen significantly. From 2018 to 2020, the sales volume of the company's bird's nest products was 5.2203 million bowls/bottle, 8.1008 million bowls/bottle, and 15.2652 million bowls/bottle, respectively, compared with 7.9877 million bowls/bottle in the first half of 2021.
In fact, the sales growth is also closely related to the continuous investment of Yanzhiya in marketing expenses.
The brand spokesperson of Yanzhiwu was changed from Liu Jialing to Lin Chiling, and this year signed a contract with Olympic fencing champion Sun Yiwen. Star recommendation, KOL grass planting, live broadcasting and other marketing means are also the routine operations of Yanzhiya. From 2018 to 2020, the company's advertising expenses were 136 million yuan, 187 million yuan and 237 million yuan, accounting for 18.78%, 19.72% and 18.27% of the operating income, respectively.
At present, the competition in the bird's nest industry is intensifying, and the homogenization of products between brands is serious, and the playing method of exchanging high advertising investment for sales may not be a long-term solution.