Dialogue with Mingchuang Premium Ye Guofu: If we don't follow the young people, we will have no future

A cost-effective brand wants to be trendy.

Wen 丨 Li Xiaolei Yao Yinmi

Editor 丨 Song Wei

Mingchuang excellent product new "three good", good to see and good to use fun

"Delay": You have kept a lot of low profile in the past two years, what did you think during this period of silence?

Ye Guofu: Mainly thinking about the development strategy of enterprises after listing. We looked at some new opportunities, like last year we did top toy, and I'm fully supporting the development of this project. Second, think about china's consumption changes, online and offline changes, and changes in consumption behavior brought about by changes in consumption structure.

"Late": Specifically?

Ye Guofu: Reform and opening up is an era of low prices, and whoever has a low price can win. Since 2010, called the cost-effective era, China's representative brands are Xiaomi and us, things are good, the price is cheap. Now it is not enough to have a cost performance, the product should be unique, there is a design.

Delay: When was this insight first captured?

Ye Guofu: In June 2019, our first Marvel theme store opened, queuing every day, and the performance of the Shenzhen theme store on the opening day doubled twice. In the past, consumers had some prejudices against Mingchuang, but after doing IP, we immediately found that consumers felt differently about us. In the past, we pursued cost performance, things must be cheaper than others, after doing IP, the price of many products is more than 30% higher than non-IP products, and it is still sought after. We really think that interest is very valuable and priceless.

"Delay": I heard that the process of cooperation with Marvel is very tortuous, you flew to the US headquarters, starting from the salesman, said PPT several times, how do you convince the other party?

Ye Guofu: First, we must show the number of stores, and second, we must show up China's 1.4 billion consumer population, which has the world's largest young consumer group. Miniso premium products are very cheap, they are worried that too cheap is not good for IP. I told them that the IP products bought in China's fourth- and fifth-tier cities are fake, and if you cooperate with me, I can push Marvel's genuine products to the whole of China, and I can use your IP in all aspects of life, a carpet, a slipper, a sock, a water cup, you can use.

"Delay": What are the new requirements for the company's ability to do interest consumption?

Ye Guofu: Mainly to increase the design ability. In the past, the design investment was not very high, and now each product has to be designed by itself, and there are dozens of design companies that cooperate with us externally. Korea's first design studio, Hangzhou's China Academy of Art, Guangzhou Academy of Fine Arts, are our cooperation units.

"Late": What changes have been made to the categories of goods in the store?

Ye Guofu: In the past, we mainly focused on living at home, but now we are gradually adding some trendy things, such as cultural creation and toys. Archaeological blind boxes we sell very well, archaeological blind boxes we are the best selling and largest in the country. Each store put a big dinosaur, a table of children in the archaeology there, knocked after not addictive, and then bought and knocked, this is very addictive.

"Late": You yourself have begun to consume fashion brands.

Ye Guofu: In the past two years, I have hardly worn suits and casual business clothes. What we do is the consumption of young people, and we must understand what young people like in each era. Young people like what we follow, if we do not follow, Mingchuang excellent products have no future.

"Delay": Very successful brands have some simple and direct emotional directions, such as Coca-Cola is enjoy, what is the emotion that Mingchuang Hopes to convey to consumers?

Ye Guofu: In the past, Mingchuang Premium Products gave others the feeling that shopping was no pressure, and now hopes to create a good life brand that young people love.

"Late": How can it be loved by young people?

Ye Guofu: There are three reasons for liking, good looking, easy to use, and fun.

"Late": Is fun new?

Ye Guofu: Recently added. This is the new three good that we have refined around interest consumption. In the past, we called three highs and three lows, high value, high quality, high frequency on the new, low cost, low markup, low price. It's about price/performance ratio. Now is the good life.

"Late": good-looking, easy to use, fun, is there an order?

Ye Guofu: There is an order. Good look is emotional value, good use is functional value, we are now the second functional value, emotional value ranked first.

"Late": I heard that you also have to make a cup of fun, to make a strawberry-flavored cup.

Ye Guofu: Yes, we are through this design, through the interest to stimulate consumption, if a cup only meets the functional needs, you can use 10 years, 20 years, there is no need to buy again. But by constantly changing the IP and changing the design you are interested in, it can stimulate you to constantly change the cup.

Pushing explosives is a unique feature of the founders

"Late": A major feature of Mingchuang excellent products is the explosive strategy, the earliest few important explosives, eyebrow pencils, mineral water, perfume are all led by you. Does the explosive product have to be deeply involved by the founder in order to be made?

Ye Guofu: This is what founders should do.

"Late": We can say an example specifically, such as water, why make a water yourself?

Ye Guofu: At that time, I observed that many people entered the store without consumption, and I wondered if I could develop a product that could be used by men, women and children. There is only one thing to think about, and that is water. Our stores are open in the commercial street, shopping mall you can buy a cup of milk tea, drink water may not be able to buy, into the famous Chuang excellent products to buy a bottle.

"Late": You can also sell other brands of water, why do you want to make it yourself?

Ye Guofu: I can also sell Nongfu Spring, but this does not meet my aesthetics. It's too popular. I want to make a kind of mineral water with personality, uniqueness, and you can see our water bottle like a small waist, very slim, put there, standing out from the crowd.

"Later": So can I understand it that way? What you value is the value of water in Mingchuang stores, in order to let everyone go to the store to consume, not because water itself is a good business.

Ye Guofu: Right. Therefore, only sell water in the channel of Mingchuang Premium Products.

"Delay": It's not easy to make explosives now, for example, there is no longer a brow pencil that quickly sells to 100 million This kind of story has happened, why?

Ye Guofu: Consumers change quickly. Now the life cycle of the explosive model is short, consumers still look at the interest, buy a wave will not buy.

"Late": What are the channels through which you actively understand consumer interests?

Ye Guofu: The first more shop, the second app I use the most is Xiaohongshu, I almost brush Xiaohongshu for more than 1 hour every day, and when I see good things, I transfer them to the commodity center.

"Delay": What inspiration did the Little Red Book give you?

Ye Guofu: Cute things sell best, and pink reds sell well. We met last month and went back to that topic, with the theme of cuteness.

"Delay": What is the explosive product that you have been trying to build with a lot of effort lately?

Ye Guofu: We want to create the first fragrance for young people in China. The first step to a better life is to let everyone in China use aromatherapy products. In the past, we didn't pay enough attention to it and did it casually, but now after the brand upgrade, we want to make it bigger and list it as the first strategic category.

"Late": Why Aromatherapy?

Ye Guofu: Growing very fast, and there is no strong brand with a very head, unlike cosmetics, a bunch of international brands. We think that aromatherapy can be bigger, and now the market sells at a price that is dead expensive. At present, our aromatherapy products sell more than 400 million yuan a year.

"Late": Your colleague said that you have always liked to visit the store. What do you see first when you go to a store?

Ye Guofu: The first thing to look at is the flow of people, one is the flow of people in the store, and the other is the flow of cashiers. You will find that some formats are very strange, there are many people in the store, and no one at the cash register pays for it. I had a clothing store on Huaihai Road in Shanghai a few days ago, a clothing store in South Korea, there was only one store in the whole country, there were many people in the store, the cashier on the first floor and the second floor I was there to observe for half an hour, no one paid the bill, I said this brand will die sooner or later.

"Delay": After half an hour of observation, why do you think no one pays?

Ye Guofu: It is estimated that its products are good-looking, and it is okay to look at it, but when it is taken in the hand and worn on the body, consumers feel that it is not appropriate.

"Late": What else to see besides the cash register?

Ye Guofu: Look at the new products, and the brand image of this brand.

"Delay": In recent years, you have tried a lot of new directions intensively, some companies may think very clearly, and then do very little attempt, some companies are doing many things at the same time, trying out one that can run. Which one are you?

Ye Guofu: We are still selective, we have cut no less than 4 projects this year. For example, large furniture went to sea, investigated for several months, cut it, and a small household appliance was also cut, and the clothing was also cut. Originally prepared to make the fragrance independent as a brand, and finally cut it, I said don't take it out to do a brand independently, focus, just develop a new series under the famous and excellent products, take advantage of the young people's interest in the national style culture, take the Tang, Songming and other dynastic literary works as the cultural matrix, develop multiple series of new aromatherapy products with higher cultural attributes and emotional value, do not want an independent brand, it is not easy to do a good consumer brand, which is so simple?

Delay: How long do you give a new product a trial and error?

Ye Guofu: One year. We are not an Internet company, the Internet may not be replaced in three or five months, we polish products, open stores, and work steadily, you need this time.

The birth of the genius franchise model

"Delay": The outside world analyzes why Mingchuang is successful, and will mention that there is your direct franchise model, how did this model come to mind?

Ye Guofu: I am borrowing from the model of international five-star hotels. China's franchise is actually difficult to manage, and all the direct stores are invested high and slow. Fast and can be standardized management is the international five-star hotel, management and brand are in my hands, customers are only responsible for investment.

In this mode, I can directly manage the store manager, store clerk, and regional manager, so as to achieve the standardization of management, and the standardization of store image and user experience. Our franchisees do not participate in management, do not give advice, they do not need to understand the operation, if they do not make money, do not open it.

"Late": So you manage everything outside the property?

Ye Guofu: Yes, I still make product differences to some extent.

"Delay": From thinking about making a brand for a long time, letting franchisees follow you for a long time, and then implementing this model, there are countless links in the middle, which links you control, which you do not control, how do you think clearly?

Ye Guofu: The advantage of joining is that it is fast, and the disadvantage is that many links are uncontrollable. Direct sales are controllable, but there are not so many good bosses serving you. I will combine the advantages of the two of them, I want to be fast, there are 1000 of the most diligent, the most intelligent franchisees outside to help me mobilize all social resources, this side through my management, to achieve the direct sales of the store I want to be controllable, so I call this class direct franchise model.

"Delay": When do you think that Mingchuang must join in this way?

Ye Guofu: We opened a store in 2013, and in 2014 many people wanted to join, and we began to think about it at that time. Our company develops so many goods, he has the right to want this, not that. The management right is in my hands, he can not interfere with the choice of goods, unified by the headquarters according to consumer changes and market changes to make decisions, if the franchisee makes their own decisions, it is extremely unprofessional.

"Delay": The headquarters is actually far from the retail terminal, how to ensure that the distribution is more professional?

Ye Guofu: The company has big data at its headquarters and has a planning and operation support department to mobilize products according to climate change and consumer changes in each place. We now have one store and one policy, a thousand stores and a thousand faces. We are divided into shopping mall stores, community stores, campus stores, open-air stores, pedestrian street stores, do separately, different blocks with different goods, and the headquarters is directly divided. We called distributed stocking, in the past called ordering to make goods, not the same.

"Delay": Like such a new model, the headquarters posture is also relatively strong, will franchisees listen to it for the first time will not have questions?

Ye Guofu: If you have doubts, don't do it. At that time, my business was good, you go to see, such an expensive rent, so many people pay the bill, representing my advanced model.

We have a total of 820 franchisees in China, with an average of 3.5 stores per franchisee. If there is no stable and substantial business return, how can they choose to open several?

Delay: This model can be a test for inventory.

Ye Guofu: There are indeed tests. But for the long term, you have to conquer.

"Delay": How to overcome?

Ye Guofu: It depends on the internal management level, and the data is all here. Why is that pattern bad in the past? It is because he can't get a hand of data, many franchisees are reluctant to go to the system, swing the goods, keep a journal, then how do you have the data to make decisions? We are the only Chinese retail enterprise in addition to supermarkets and specialty stores, which can directly and directly understand the consumption trends of users.

"Late": Sounds like a lot of investment.

Ye Guofu: We spent tens of millions of dollars to build the system, and when We got to Mingchuang, we spent another 100 million sap (enterprise resource management software system). First, I want to go international, the Chinese system can not go, only recognize SAP. Second, I want to have a larger system of control capabilities.

"Delay": How many new franchisees will be introduced this year?

Ye Guofu: About 10% of new franchisees are new franchisees every year, and 80-90% are old customers who open stores. Many franchisees in first-tier cities are full, opening second-line, second-line full to third-line, to fourth-line, and now China's high-speed rail is so developed, from the first line to the third line is only a few hours.

Delay: How many franchisees do you have in total? How many of them are profitable?

Ye Guofu: At present, there are 850 franchisees in China, with an average of 3.5 stores per franchisee, this data has been relatively stable, if there is no more stable and considerable business returns, how can you choose to open several?

"Delay": Mingchuang will control the number of new stores every year in 400-500, why is it within this range?

Ye Guofu: We want to be more stable, hope to be responsible for franchisees, and choose some good shopping malls. New malls you don't know good or bad, first observe for a year and then go in, the risk is much lower.

Delay: Why 400-500 instead of 500-600, 600-700?

Ye Guofu: There are about 1,000 new shopping malls opened in China every year, and we can see that is about 500. I have repeatedly said internally that we must move from high-volume development to high-quality development, ensure that franchisees open a successful one, do not rush, do not hurry, and put it in the first place.

"Delay": How to calculate stability?

Ye Guofu: To have a good return on investment for franchisees, we hope that franchisees will return to the capital in about a year or a year and a half, and the second point is the store closure rate, which used to be about 5%.

A little later to go to sea, the product is a little more stable

"Delay": Looking back at the development process of Mingchuang Premium, if it is possible, which important decision will you make again?

Ye Guofu: Internationalization should not be so fast. We have been out of the sea since 2015 and have been invested in it since we were not very prepared for internationalization. Today, two or three years later, 2017 or 2018 will be better.

We should not do so many markets at once, we should focus more on large-scale markets, and each market should penetrate one by one.

"Late": There are more than 100 overseas direct sales stores, but only 4 in China, why are there more overseas direct sales? What are the corresponding challenges?

Ye Guofu: To first run through the store model through the direct store, create a local successful store model, and attract local franchisees to cooperate, every time we enter a new country, it is from 0 to 1. Now except for our one who is going to sea offline, other companies are going to sea online.

"Late": Which overseas market do you value the most?

Ye Guofu: North America, Canada. Despite so many Chinese, the first consumer market is still the United States.

"Late": Then there was an idea called a $10 store.

Ye Guofu: Right.

"Late": Isn't $10 expensive? It sounds like consumption has been upgraded, and the relatively cheap stores in the United States are a little more than a dollar.

Ye Guofu: The consumer market in the United States is very developed. Like you said, $1 stores have a bunch of brands, Dollar General, Dollar Tree tens of thousands; there's a $5 store, Five Below, which is now worth $15 billion; walmart, the world's largest retailer; Costco, a middle-class member supermarket; Target, a middle-class premium supermarket; organic food supermarket Whole Foods; Orchard Fresh is a premium community supermarket, but the United States doesn't have a 10 We suddenly found that this market is very blank, so we have to seize it as soon as possible.

"Late": It's really a family treasure. But think backwards, if it's really a blank market, why doesn't anyone else come in?

Ye Guofu: No one else came in? (pause here for 2 seconds) Entrepreneurship can't think like this! (Excitedly reaching out to intercept)

"Delay": Is the rest of the company optimistic?

Ye Guofu: After I proposed this idea, the American team talked to the shopping mall, and everyone was surprised and said that this market is definitely a good market. Because with the rise in China's electricity curtailment prices, carbon neutrality, the future cost of materials gradually goes up, which has a great impact on American retail enterprises and has a great impact on its five-yuan stores. We want to provide American consumers with some better products, 5 yuan is not 10 yuan, 10 yuan is a small amount of money in the eyes of Americans, not a big money.

"Delay": Domestic raw material prices have risen, but commodity prices have not actually gone up, and enterprises have borne the pressure of rising costs. As a founder, do you need to do something different?

Ye Guofu: We need to increase the added value of products through design to cover up or make up for the rise in costs.

"Delay": Raising prices can also increase profit margins, how much do you plan to raise?

Ye Guofu: A little bit. The adjusted price may first go to the first and second-tier cities, and the third-, fourth- and fifth-tier cities will still do some cost-effective products. Value for money or foundation, is the ticket.

"Delay": Some readers asked, when will Mingchuang Premium be able to generously admit that it is a Chinese brand?

Ye Guofu: We have always been a Chinese brand, and it should be said that it is a global brand from China. In the past, we were influenced by the Japanese design style in product design, advocating simplicity, nature, texture, before the listing of many consumers thought that Mingchuang is a Japanese fast fashion brand, after the listing more and more people know that Mingchuang is a Chinese brand that sells domestic products to nearly 100 countries around the world, you see our downstairs store door logo has been changed Chinese, the next period of time will be felt everywhere.

"Late": But you still have Shunya Miyake, is he still a "co-founder"?

Ye Guofu: Probably not as a co-founder.

"Delay": Before the Mingchuang excellent product design plagiarism infringement lawsuit is quite a lot, how to solve the problem?

Ye Guofu: At the beginning, there were not many people, and the review of appearance patents was not strict, but now our legal team has more than 20 people, who attach great importance to the protection of intellectual property rights, and are constantly increasing our own product research and development capabilities.

Listing forces the organization to be perfect

"Delay": Mingchuang Premium has never raised funds before, why should it introduce investors in 2018?

Ye Guofu: It is also for the sake of listing, and we want to increase external shareholders to regulate our equity structure. And we have no experience, and I don't know whether it is better to list A shares, Hong Kong stocks, or US stocks. It is better to ask a third-party consulting agency than to find a professional shareholder to come in.

"Delay": I heard that more than 100 investment institutions have come to you.

Ye Guofu: I looked for a lot, but I hardly met them, so I met the two of them (Hillhouse and Tencent).

"Late": Why the two of them?

Ye Guofu: We don't need money, of course, we have to choose the best.

"Delay": Hillhouse had 270,000 shares in the first quarter, 5 million shares in the second quarter, and 250,000 shares in the third quarter.

Ye Guofu: I didn't pay attention to this.

"Delay": SURE?

Ye Guofu: I really didn't pay attention. I just do a good job. I don't care about the stock price, and I can't sell the stock.

"Late": Hillhouse also introduced you to two new executives.

Ye Guofu: After Hillhouse came in, I called Zhang Lei directly for help and asked for a Harvard graduate to help us dig people. We have never used such a powerful person before, how to interview and identify whether it is a real talent or a fake talent, she helps us interview and check. She also told me who I needed to match, such as a certified public accountant with good English at least. We didn't understand that. Now it is different, a large area of excellent headhunting companies recommended, a large number of interviews, as soon as possible to complete the organization, brand, financial, human resources and IT, as soon as it is together, it will start to sprint all over the IPO.

"Late": How did that recruit people in the past?

Ye Guofu: Before the business was not big, before the start of the IPO, there were no more than 1,000 employees, and there were only more than 1,000 stores.

"Delay": In the first two years, the company's human resources head changed very much, seven people changed in three years, why is there such a big change?

Ye Guofu: In the past, we attached importance to business and did not pay attention to the development of talents. I now focus 50% on talent development, organization building, and 50% on new product development.

"Late": Why didn't any of them stay?

Ye Guofu: I am not satisfied with any of them, I am demanding, perfectionist.

Delay: How do you measure whether it's the level you want?

Ye Guofu: First, the founder's intuition; second, it really did not achieve results.

"Delay": How to count the results?

Ye Guofu: First, the construction of organizational culture should be in place and the cohesion should be improved; second, it can recruit suitable and excellent new people for me.

"Late": Your wife is now managing important departments of the company, how do you explain to employees that she is also an executive in the company?

Ye Guofu: She came in these two years, and she didn't do executives before, but she did auditing in the past two years. I think as long as she is fair and just, she can put herself in the right position.

"Delay": Some people think that Mingchuang is a "family business", do you agree?

Ye Guofu: I disagree. At present, only 2 in the VP are accompanied by mingchuang in the early stage of entrepreneurship, and the others are new people who enter later, and the family business will certainly not do so.

"Delay": I think of every executive meeting room with corporate values: struggle to change destiny. Saying that you think, feeling is the summary of your life.

Ye Guofu: Not only my life, but also the summary of the lives of all the people in our company, we are not the second generation of officials, and we are not the second generation of the rich, what do we rely on to live a good life? There is no second way to go by struggle.