Reporter | Zhao Xiaojuan
Edit | Ya Han Xiang
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In April 2020, in order to develop the strategic layout, the three squirrels launched 4 sub-brands in one go, respectively, mainly engaged in instant fast food, baby and child food, pet food and customized gifts. The move means that the three squirrels are optimistic about the future growth of these 4 segments and bet on it. But it turned out that it didn't hit all of them.
One of the sub-brands, "Xi Xiao Finch", was officially launched on August 29, 2020, which is a brand created and launched for the wedding market; mainly provides consumers with customized and retail services for wedding candy online. It is not difficult to see from the content of the WeChat public account of Xi Xiaoque that the design style and target customer group of Xi Xiaoque products cater to young people who are preparing to get married.
But half a year after the "Happy Sparrow" was launched, it was stopped. The three squirrels public relations related personnel confirmed the above facts to Interface News, and the reason for stopping the brand was "based on the strategy of focusing on the main brand and streamlining the category based on the three squirrels". The three squirrels have not disclosed the separate performance of this sub-brand, and xi xiaoque's WeChat public account has been no longer updated in January 2021.
Image source: Xi Xiaoque WeChat public account
In the expectation of the three squirrels, the Gift Market should be a growing outlet field like convenience fast food, children's snacks and pet food, and there has been no vertical brand in this segment, and large companies have not iteratively innovated for a long time - the chances of three squirrels entering such a market should not be small.
But it underestimates the complexity of the field and the changing needs for gifts.
"Now souvenirs are not eaten by yourself, and if the product is not as expected, the consequences are not as simple as returning the goods." Souvenirs in many wedding banquets basically represent the attitude of the bride and groom to the guests. It is the first choice to find a high-profile and high-trusted gift shop in the local area. A practitioner engaged in candy wholesale in Anhui told Interface News.
In his view, it is difficult for a pure online brand like three squirrels to break into the offline wedding market, on the one hand, they have not had much experience in the wedding market before, and the consumption characteristics of the online and offline markets are not the same; on the other hand, because marriage is far more important to many people than the daily purchase of snacks, a large part of them will not buy souvenirs from online, worried about after-sales problems due to quality inconsistencies.
However, in addition to the online and offline channels, now the wedding candy and even the entire candy field are facing great pressure.
The first is that the number of people getting married is decreasing. In the first three quarters of 2021, the number of marriage registrations in China was 5.886 million, a decrease of 8,000 pairs compared with the same period in 2020. Compared with 7.131 million pairs in the first three quarters of 2019, this is a decrease of 1.245 million pairs, a decrease of 17.5%. Judging from the health commission's monitoring of population births in the first half of 2022, the number of births and fertility levels in the mainland will still show a downward trend this year.
In addition, with the increase of consumer health awareness, the trend of snack desaccharification is obvious, compared with nuts, fruit snacks, traditional confectionery product sales have begun to decline. According to the data provided by the consulting firm Euromonitor International to Interface News, the market size of the two snack categories of candy and chocolate has not changed much from 2018 to 2021, the growth rate is very slow, and in the next 4 years (2022 to 2025), the market size of candy snacks is in a state of decline, from 61.2 billion yuan to 60.9 billion yuan in 2025.
"The total sales volume is incomparable to before." A Hangzhou candy distributor revealed to Interface News that in 2010, an agent in Hangzhou could make good neighbor candy achieve sales of 80 million; in the past two years, this number may have fallen back to 20 million. Good Neighbor Candy is a candy brand in Jinjiang, Fujian Province, which once acquired COFCO's chocolate brand Jindi Chocolate.
The change in the wedding sugar market projected by this trend is that the wedding candy products in first- and second-tier cities are tilting towards more high-end products, such as imported chocolates and biscuits.
"The customers of the gift shop are still in the first- and second-tier markets, and they prefer the products of foreign brands such as Godiva and Ferrero and niche national fashion brands, such as a souvenir, chocolate is a must, whether it is a lind up or Hershey, Ferrero, etc., and then with cookies, mille-feuilles and so on." Fan Yongbin told Interface News that he is the owner of Hefei Haoyuan Xi Sugar Gift Customization Center and has also run a candy wholesale business for more than 20 years.
Not only does this mean that the sugar business is dismal, but the profits of the gift shop are not as good as in the past.
Especially in many first- and second-tier cities in East China, in the souvenir content, basically do not choose good neighbors, Xu Fuji and other brand products, but the above imported products. In Fan Yongbin's view, compared with the past ten years, the channels of candy products are very rich, especially after the live broadcast with goods and the popularity of social platforms, so that the gross profit space of large brands is very transparent no matter which platform, such as Ferrero, Dove and other brand products if placed in souvenirs, there is almost no profit margin.
The beginning of the crit that made the sugar market face the crisis was the outbreak of the epidemic.
Fan Yongbin's feelings are very obvious, the outbreak of the epidemic has changed the form and scale of marriage for many people, and then some people who originally planned to hold a wedding in the first half of 2020 postponed the wedding, resulting in a small peak in July and October. But at the same time, it also brought about the "after-effects" of the epidemic - limiting the size of weddings, which caused the number of souvenirs to fall from the previous average of 300 to 200, and the unit price of customers fell by 25%, and this impact has continued to this day.
The same is true of Fang Baolong, founder of Zhejiang Dieer Xili Shop. He has been involved in the gift business since 2005, the gift industry reached its peak around 2017, and the 130 square meters experience store in Hangzhou, with annual sales of 10 million yuan at its peak, and the gross profit margin can reach 40%. However, after the outbreak of the epidemic, the peak sales of Dieer Xili Shop in 2021 were only half of the original.
The self-help methods of the owners of the gift shop can be reduced to two. One is to provide customized services to enhance gross profits, and the other is to launch private labels.
Fan Yongbin will make some customized products from well-known brands of candy, chocolate and cake manufacturers. "For example, Bujijia and Dove will authorize the gift shop channel to do wedding channels, in addition, in terms of packaging design, they will also refer to the requirements of the gift shop channel to make the product more popular with the wedding audience, and this customized strategy can be calculated to obtain 5%-10% more gross profit space than the wholesale channel."
"Customer budgets are lower, and it is necessary to be more cost-effective to attract more customers, and cost-effective means lower gross profit while maintaining the original service." To this end, it is Fang Baolong's approach to abandon low-margin products, and he has developed a free-label product called "Now it's Gold" to put into souvenirs, including chocolate, fragrance and other products. Fang Baolong told Interface News that private label products account for 30% of the total sales, and gross profit is more self-controlled.
Dier Xipu's own brand "This moment is gold" is displayed in souvenirs.
Due to the positioning of high-end, the unit price of the souvenir shop is 60-100 yuan, the unit price of this level of the souvenir can cover chocolate, wine, tea, daily necessities, etc. in the design of the souvenir content, the content is more determined by the customer's budget and collocation preferences, while considering the cost performance, the emotional value covered by the souvenir is also attached to it, this commemorative product will often make the buyer more cautious in the choice, too traditional candy chocolate brand will be abandoned.
It is not the norm for weddings to be cancelled due to the epidemic in the future, but wholesalers and gift shops represented by Fan Yongbin have to face a situation that it is unrealistic to rely on young people's weddings to drive sales of candy chocolates. At present, this is more of a stock of business than incremental space, they need to use upstream and downstream support, such as joint local wedding companies, confinement clubs, hotels, etc. to cooperate together, may be able to find more market opportunities.