Reporter | Ma Yue
Edit | Zan Huifang
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According to the investment community, on January 6, the Chinese fast food chain brand Laoxiang Chicken has completed the Pre-IPO round of financing, and the investors are Guangfa Qianhe and Mai Xing Investment.
Prior to this, the hometown chicken also came out of the news of the impact on the listing. On November 4, 2021, the website of the Anhui Bureau of the China Securities Regulatory Commission showed that LaoXiang Chicken was receiving listing counseling and was preparing to be listed on the main board of the Shenzhen Stock Exchange.
Founded in 2003 in Anhui Province and formerly known as "Feixi Old Hen", this fast food brand is mainly based on chicken soup and various types of Chinese stir-fried rice.
At present, the hometown chicken has not disclosed the prospectus. According to public information, the number of stores in Laoxiang Chicken has exceeded 1,000, distributed in all parts of Anhui, Nanjing, Wuhan, Shanghai, Shenzhen, Beijing, Hangzhou, Suzhou, Xuzhou and other places. Lao Xiang Chicken announced that the company spent 12 years and crossed 1 billion yuan; it took 2 years to cross 2 billion yuan. From 2011 to 2019, its profit has increased by 33 times, its sales revenue has increased by 32 times, and the average annual growth rate is about 40%.
In fact, the epidemic has a deep impact on the entire domestic catering market, and it is also an important turning point for the hometown chicken.
As a catering brand concentrated in the local market of Anhui, the first successful "out of the circle" of Laoxiang Chicken stemmed from its chairman Shu Congxuan's "hand-torn employee joint letter" incident in February 2020, saying that the loss of Laoxiang Chicken during the epidemic was conservatively estimated to reach 500 million. After a wave of "sincere selling misery", the hometown chicken obtained a total of 1 billion yuan of bank credit and strategic investment.
Taking advantage of the unabated heat, The hometown chicken quickly opened a "200 yuan earthy taste conference", which successfully attracted market attention and allowed more consumers outside Anhui to know about the brand for the first time.
Subsequently, LaoXiang Chicken also took advantage of the opportunity to accelerate the pace of expansion into other regional markets outside Anhui.
In March 2020, Shu Congxuan said that in order to accelerate the national market layout, "directly operated stores will definitely exceed 1,000" during the year, expanding cities including Beijing, Shanghai, Hangzhou, Guangzhou and Shenzhen.
Taking the Beijing market as an example, Lao Xiang Chicken officially opened its first store in Wudaokou Shopping Center in April 2021, and as of now, Dianping shows that it has 13 stores in Beijing.
In the process of expansion, the chicken started from the product and store formats, trying to get closer to consumers in first-tier cities.
Recently, LaoXiang Chicken opened a "farm flagship store" in Wangjing, Xinhui City, Beijing, compared with ordinary fast food stores, adding roasted birds, craft brewing, coffee, milk tea, freshly squeezed juice, barbecue and other categories, and on the menu, four different dining periods and scenes including breakfast, lunch, afternoon tea and dinner were demarcated.
Hometown Chicken Beijing Farm Flagship Store Image source: Xiaohongshu user @ Di Xiao Crooked
The store decoration of the farm flagship store is also more focused on design, with light boxes written with "Farm flagship store" and "ORIGINALCHICKEN", with large areas of bright windows and bars, and "organic vegetable blind boxes" to increase consumers' sense of interactive experience.
Hometown Chicken Beijing Farm Flagship Store Image source: Little Red Book user @ Deep Sea
Previously, the store opened by LaoXiang Chicken in Shenzhen also had a similar "science and technology farm" special theme, with the increase of the bistro experience as the selling point.
Laoxiang Chicken Shenzhen Flagship Store Image Source: Little Red Book @ Laoxiang Chicken
Catering brands explore new store models in order to lengthen business hours, attract more consumers into stores, and increase customer unit prices, so as to find new growth points.
For a regional fast food head brand like Laoxiang Chicken, if it wants to enter the national market, it needs to be closer to the preferences of local consumers in first-tier cities. In its mature market, Anhui has changed from a fast food shop to a tonal style of taverns and coffee and beverage stores, it is not easy to break the inherent cognition of consumers, but after entering the first-tier cities, there are more characteristic stores to test the water.
The impact of the listed hometown chicken, store size and profitability are undoubtedly important conditions to be examined. Although the rapid opening of stores can increase the total turnover, the profit of a single store will be diluted and the return on investment will be lower. In the future, the competition in the catering industry has risen from the product dimension to the comprehensive dimension, including supply chain, efficiency, environment, marketing, experience and so on.
If you want to go public smoothly, you may have to tell more new stories for the capital market.
Wang Dongming, a chain consultant in the catering industry, analyzed that it is difficult for companies to rely on a single fast food category to list. The pricing of fast food categories is very important, and too high a price will reduce the frequency of consumer consumption, and if the price is too low, the profit is lower. Therefore, it is difficult to combine profits and turnover, and both of these are crucial for the listing of enterprises. Although the model of the Flagship Store of Laoxiang Chicken is less compatible with the fast food category, this move can increase brand awareness.