Aunt Qian's fresh "defeat in Beijing", is pre-made cuisine a good choice?

Image source @ Visual China

Text | Radar Finance, author | Yihui Li, Editor, | Deep

Big Mama Qian, who does not sell overnight meat, is undergoing a round of deep adjustment.

A few days ago, there were media reports that 7 stores in the Beijing area of Aunt Qian closed their stores, and the original staff of many stores confirmed the news. According to reports, the amount of unused consumption that was previously recharged, consumers can contact customer service on the Money Aunt Mini Program to refund.

On January 19, Aunt Qian issued a statement saying that the adjustment of stores in the Beijing area is a normal business behavior. The company will invest more resources in a relatively stable and mature market, and increase the research and development and investment of prepared dishes.

Regarding the obstacles to expansion in the north, Aunt Qian also told the media that consumers in the north are accustomed to buying a large number of fresh vegetables at one time, which makes it difficult to adapt to its Nissin model.

However, in the eyes of industry insiders, under the siege of community group buying and e-commerce, Aunt Qian's "nightly discount" offline community stores, with customer capacity and human effect, ping effect is much worse than in the past, and losses in the market with higher costs are almost inevitable. And its choice of power of the prefabricated dishes, the industry is not optimistic, as a community operator of the money aunt, there is no advantage to speak of.

There has been a large-scale adjustment in beijing business

According to Aunt Qian's statement, the company entered the Beijing market for the first time in 2020. When exploring unfamiliar markets, we adopt a relatively stable strategy, using a small number of direct and franchised stores to find a stable profit model in the region. The adjustment in the process belongs to the normal business behavior.

"The Beijing market has its peculiarities, we underestimated the difficulty of the Beijing market, and even more underestimated the operating pressure brought to us by the high rent of housing in the Beijing market." The statement said that the single-day passenger flow of the store did not reach the expected level, and more investment was needed if the Beijing market continued to develop.

According to reports, after a comprehensive assessment, Aunt Qian plans to invest more resources in a relatively stable and mature market, and will increase the research and development and investment of prepared dishes in mature markets.

According to the Tianyancha App, Beijing Qian Dama Fresh Food Chain Co., Ltd. was included in the list of abnormal operations by the Beijing Dongcheng District Market Supervision and Administration Bureau as early as December 6, 2021, because it could not be contacted through the registered residence or business premises. Nine of its 12 branches are currently in deregistration.

Subsequently, there was news that All Aunt Qian's Beijing stores were closed. According to CCTV Finance, the "Qian Dama" fresh food store located on Fengyi South Road in Fengtai District, Beijing, the three words "Qian Dama" on the signboard here can no longer be seen, and the store door is locked, and the facilities inside are all emptied.

A store not far from Guang'an Kangxin Homestead, according to nearby residents, closed in December last year, less than half a year after it opened last summer.

A person in charge of Aunt Qian's Wison Garden store said that due to poor management, All of Aunt Qian's stores in Beijing have been closed. At present, on the official website of Aunt Qian, the store information in beijing cannot be found.

A franchisee in the Beijing area revealed that Aunt Qian's gross profit is too low to make money. He believes that Aunt Qian's marketing method is more suitable for the south, and the north is still cautious, and the Nissin model it implements is too much to lose.

Aunt Qian also responded to the outside world that the living habits of consumers in the north and south are very different, and consumers in the north are accustomed to buying a large number of fresh vegetables at one time, while Aunt Qian's Nissin model needs to have enough passenger flow every day to ensure the normal operation of the store.

Public information shows that the QianDama community fresh (chain) brand was established in 2012, focusing on the business philosophy of "not selling overnight meat", with the sales strategy of "starting at 7 o'clock every night, reducing it by one discount every half hour, and delivering it for free after 11:30 p.m.", it quickly opened up the situation.

By December 2019, Aunt Qian completed the D round of financing, and the total number of stores nationwide exceeded 1,700. At the end of 2020, Aunt Qian began to "wave the master to the north", opening direct stores in Tongzhou, Daxing, Chaoyang District of Beijing and Yanjiao in Hebei Province, and attracting franchisees to open franchise stores in the region.

It is understood that every time she enters a new city, Aunt Qian must first build a supply chain and create a direct store model in the local area, followed by recruiting and counseling franchisees, and the huge investment of the platform includes supply chain and subsidy costs.

But as the statement said, Aunt Qian "underestimated the difficulty of the Beijing market."

As we all know, fresh food is originally a low gross profit, high loss industry, which requires a certain scale and a stable repurchase rate to achieve profitability. However, the small number of stores in Beijing cannot dilute the supply chain costs, coupled with the high rent and labor costs in Beijing's first-tier cities, which is destined to go north is a "dangerous move".

In addition, some former employees of the brand believe that the consumption concepts of the north and south are different, and the selling point of "no overnight meat" is not attractive in the north.

It is accused of cutting leeks and expanding in obstacles

Not only did it encounter water and soil dissatisfaction in the Beijing area, but after it was suspected of "cutting franchisees and leeks" in September last year, Aunt Qian carried out large-scale layoffs and business contractions, and internally rectified on a large scale.

At that time, a report of "CCTV exposed the inside story of the loss of Qian Dama franchisees, and there were franchisees who lost 400,000 yuan a year", which made the topic of #Qian Dama franchisees losing brand benefits the first hot search. According to CCTV financial reports, in order to quickly obtain customers, Aunt Qian adopted an aggressive discount method, which directly led to the loss of some franchise stores.

A franchisee interviewed by CCTV said that this radical discount method directly led to losses, and most consumers will develop the habit of waiting until the discount time to patronize, resulting in the more stores sell dishes, the greater the loss, and the loss of more than half a million yuan a year.

Some analysts believe that the gimmick of selling discounted dishes at night has attracted a wave of consumers who like "wool", especially in the sinking market, and there are more such consumers, which directly reduces the gross profit of franchisees.

Therefore, the profit of franchisees is far from the level of "20% to 30% gross profit and one-year return" in the mouth of the merchants. In fact, many franchisees can not last a year, according to CCTV news reports, some netizens accused themselves of selling houses to join the money of the mother, invested 1.7 million yuan, but in the past year of operation, the average monthly loss is 30,000-50,000 yuan.

However, with the slogan of "do not sell overnight meat" and the business model of "Nissin", Aunt Qian has won the favor of capital. In December 2019, Aunt Qian completed the Series D financing, introducing investors such as Cornerstone Capital and Jiangu Capital to invest 1 billion yuan in it, and the valuation of Aunt Qian reached about 8.5 billion to 10 billion yuan at that time.

With the blessing of capital, Aunt Qian naturally opened the national expansion. The latest data is that as of October 2021, Aunt Qian has laid out more than 30 cities across the country, and the total number of stores has exceeded 3,700.

Even in April and August last year, Aunt Qian twice reported IPO news. In April 2021, Bloomberg said that Aunt Qian planned to go public in Hong Kong and raised $400 million to $500 million. Before the plan is listed, another round of financing will be carried out to raise 2 billion yuan so that its valuation can be further increased to a maximum of 25 billion yuan.

In this regard, the relevant person in charge of Aunt Qian said in an interview, "At this stage, the company has no listing plan, and will not comment on the rumor."

However, at the same time as the expansion of stores and rolling capital snowballs, along with the news that Qian's franchisees are losing money, in September 2021, there are media reports that Qian's aunt began to "optimize" personnel, layoffs of more than 50%, do not do well in the area of closure and contraction, internal large-scale rectification.

At the same time, after more than two years of soaring community group buying, it has brought greater competitive pressure to the entire fresh food industry, making the survival of Qian Dama's franchisees more difficult.

According to Tianyancha data, there are currently more than 7.49 million enterprises in the mainland whose names or business scope include "fresh, fruits, vegetables, fruits and vegetables, fresh group purchases" and whose status is in business, survival and other labels.

On January 5, the "Third Eye Retail" learned that Aunt Qian's Fuzhou regional stores had been closed from more than 40 to more than a dozen, and the proportion of closed stores exceeded 60%. According to franchisees, the loss is seriously difficult to support is the main reason for the closure of the store, and representatives of franchisees have gone to the Guangdong headquarters for consultation.

Chinese food industry analyst Zhu Danpeng analyzed that from the perspective of offline franchisees, the "encirclement and suppression" of fresh e-commerce and community group buying, as well as the impact of cost increases, the "nightly discount" model of offline community stores will inevitably lose money, and "it is inevitable that there will be losses for franchisees."

Will the prepared dish be a breakout outlet?

The news of withdrawing from the Beijing market has made Aunt Qian's prepared dishes get a lot of attention.

In December last year, Aunt Qian launched a short-term prefabricated dish project called "Aunt Qian's Chef Dish" at the South China headquarters, and launched 12 pre-made dishes in stores, online mini programs and vegetable bars.

Feng Weihua, general manager of Qian Dama Company, said that the company accelerated the layout of the prefabricated vegetable industry, relying on its own supply chain system, cold chain distribution system, etc., which can meet the short-term fresh-keeping pre-made dish delivery needs of C-end consumers and achieve "curve overtaking" on the prefabricated vegetable track.

According to reports, Aunt Qian's layout of pre-made dishes will be combined with the previous "Nissin" model to promote. That is, fresh ingredients are used to make short-term, shelf-quality prepared dishes. At present, Aunt Qian has reached cooperation with chain restaurants such as Farming Ji and Guangzhou Restaurant to seek new growth points in addition to community fresh food.

According to the data mentioned by Feng Weihua in an interview, the scale of the domestic prefabricated vegetable market has reached 300 billion yuan, and it is still growing at a compound rate of 20% per year.

Is it a good choice to cut into the pre-made market at this time?

"At present, it seems that pre-made dishes are a wind outlet, but I think the competition in the future will be very fierce, and as an operator of the community, Aunt Qian has no advantage in doing this, especially in terms of cost." Zhu Danpeng told Radar Finance.

Since the second half of last year, after experiencing a round of reshuffle of fresh e-commerce, many brands have entered the pre-made dishes on the cusp, including players such as Daily Fresh, Dingdong Grocery and Hema.

On the other hand, compared with the heat of merchants and capital, consumers' attitude towards prepared dishes is quite "cold". A consumer said that many of the prepared dishes are machine-calculated and fried according to the proportions, and the taste is average. One person can eat it occasionally, and the words of a family are not very good.

Zhu Danpeng also believes that prefabricated dishes in China belong to the initial stage, and have not really entered the node of "production and marketing", although the capital side is very enthusiastic, the industrial side is very passionate, but the consumer side does not have much desire.

Can Aunt Qian do a good job in the business of pre-made dishes? Radar Finance will continue to pay attention.