China Fund News reporter Yishan
Recently, the "small body, big taste" of the Hershey company caused a big controversy, not only was exposed to withdraw the cabinet and close the store rushed to the Weibo hot search, but also due to the problems left by the channel and domestic dealers, there were more than 50 million yuan in losses from dealers.
Hershey withdrew from the Chinese market?
According to the Beijing Business Daily, the online store of Hershey (China) Investment Management Co., Ltd. has been terminated. Internal employees revealed that from 2020, Hershey's company in Shanghai has begun to lay off employees and withdraw cabinets and close stores in various parts offline. At the same time, in the handling of the remaining problems of the channel, Hershey has disputes with a number of agent dealers, and Hershey legal person has left China.
Previously, at the end of 2020, Hershey had revealed that it would adjust its business model in China and introduce a strategic dealer. Michele Buck, then-Haoshi CEO, reportedly said, "This transformation means that we no longer rely on our own large number of retail salespeople and are more focused on arranging through total distributors."
On January 19, the Hershey Dessert Concept Store WeChat public account posted that the original Hershey Chocolate Dealers from Beijing, Shanghai, Guangzhou, Shenzhen and other places revealed that Hershey (China) Investment Management Co., Ltd. has quietly withdrawn from its office in Xinmei Union Square, Pudong New Area, Shanghai. Hershey has great dissatisfaction with the handling of the remaining problems of the channel.
Shenzhen Xintuo Industrial Co., Ltd. said that the company signed the "Trademark License Agreement - Hershey Dessert Shop" with Hershey (China) in 2018 and signed a supplementary agreement in 2020. The company has opened 23 Hershey dessert shops in China, investing a lot of money and manpower, but Hershey has suddenly cancelled and unilaterally terminated the contract, causing a direct loss of nearly 50 million yuan to the company.
To this end, the company also submitted an application to the Shanghai Municipal Market Supervision and Administration Bureau, indicating that Hershey Company arbitrarily exercised its unilateral right of termination, and it was obviously contrary to normal business logic to request the termination of the cooperative relationship with the company. Once the Hershey company is deregistered, it will be difficult for the company to recover the liability for breach of contract and losses from the shareholders in the United States, and it is hoped that it can apply for a suspension of the cancellation of the registration of the Hershey company and suspend the change of the company's legal person (if any) and other formalities.
According to the Tianyancha APP, Hershey (China) Investment Management Co., Ltd. was registered and established in Shanghai Municipal Administration for Industry and Commerce on April 26, 2001. The legal representative, ROHIT GROVER, serves as a legal person and executive in three domestic enterprises. Among them, Hershey Commercial (Shanghai) Co., Ltd. was deregistered on December 29 last year, while Hershey (China) Investment Management Co., Ltd. and Hershey (Shanghai) Food R&D Co., Ltd. showed that the liquidation information was generated on November 20 last year and March 3 last year. Among them, ROHIT GROVER, head of the liquidation team of Hershey (China) Investment Management Co., Ltd., and WILLIAM CHRISTOPHER PRITCHETT and Zhao Zhihua, members of the liquidation team.
Online platform, Hershey Tmall flagship store has been terminated and cannot be searched, but Hershey Jingdong's self-operated store is still operating normally.
Rush to the hot search! The official response was not true
As soon as the news of the closure of the Hershey cabinet came out, it quickly rushed to the hot search, triggering heated discussion among netizens.
Many netizens have said that the Hershey chocolate brand is very delicious, and it is a pity to see the closure news. Some netizens also expressed their pain for dealers, even if they want to quit when they are good, they should first solve the dispute with dealers.
It is understood that recently Hershey dealers across the country have also jointly sent Chinese and English emails to the senior management of Hershey in the United States, and released a message on social platforms, hoping that Hershey will treat dealers and workers in China kindly, and do not ignore the efforts of dealers who have worked hard in the past to build brands in China.
In response to the rumors of Hershey's withdrawal from the Shanghai office and withdrawal from the Chinese market, Hershey officials have not publicly responded to the rumors.
However, according to a previous report by the financial network, Hershey's official customer service responded that the news was not true and the company did not withdraw from the Chinese market.
China's "water and soil are not satisfied"?
Founded in 1894, Hershey is the largest chocolate and chocolate confectionery manufacturer in North America and has been shortlisted for the World's Top 500 Brands. After Hershey entered China in 1995, it was deeply rooted in the hearts of the people with advertisements such as "small body and big taste".
Source: Hershey's official Weibo
In 2014, As a continuous expansion and layout of the Chinese market, Hershey spent 2.6 billion yuan to acquire the Golden Snub-nosed Monkey Company, but soon after, Hershey publicly stated that after a preliminary assessment of the value of the Golden Snub-nosed Monkey, its net sales and profitability were significantly lower than initially expected.
In May 2017, some media reported a joint letter issued by 130 office directors and more than 1,000 dealers of The Golden Snub-nosed Monkey Company, saying that the company owed 270 million yuan in fees, including commissions, bonuses, share capital and national dealer fees, unresolved inventory, etc.
In 2018, when the golden snub-nosed monkey did not get half a profit, the golden snub-nosed monkey was finally sold for 400 million yuan.
Judging from the performance data in recent years, Hershey seems to have symptoms of "water and soil dissatisfaction" in China. China was in the red from 2015 to 2017. From 2018 to 2020, Hershey's net sales continued to grow, but the Chinese market continued to decline. According to the data, Hershey's net sales by 2020 will be $8.15 billion, up 2% year-on-year, but sales in the Chinese market have fallen by 46%.
From the perspective of market share, Hershey is also obviously not dominant. Relevant data show that in the Chinese chocolate market in 2020, Hershey's market share is 3.2%, far lower than Mars' 32.8% and Ferrero's 22.3%.
According to Hershey's recently released results for the fourth quarter and full year of 2021, the data shows that net sales in the fourth quarter of last year were $2,326.1 million, an increase of 6.4% year-on-year, and net profit was $335.6 million, an increase of 16.5% year-on-year. Net sales for the full year 2021 were $8,971.3 million, up 10.1% year-over-year, and net profit was $1,477.5 million, up 16.4% year-over-year.
From the perspective of sales share, sales in North America are still the company's main position. International regional net sales account for less than 8%.
In the international sales area of the earnings report, Hershey mentioned the increase in the list price in the international market and the decline in the level of returns and trade promotions brought about by changes in the operating model in China last year, in addition to the decline in international sales due to lower inventory levels of retailers and distributors than in the same period last year and price elasticity, international sales fell by 17.7%.
In terms of stock prices, Hershey's stock price has risen all the way in the past year, as of the latest price per share of $203.64, an increase of more than 38% in the past year, with a total market value of about $42 billion.
Edit: Xiao Mo
Copyright Notice