Reporter | Zhang Xuan
Invest in e-sports halls, open milk tea shops, invest in KTV, sell headphones...
Singer-turned-Jay Chou is also ambitious in doing business, and a recent news has made Zhou Dong and the commercial map behind him the focus of attention.
Recently, Superstar Legend Group Limited (hereinafter referred to as "Superstar Legend"), known as the "Jay Chou Concept Stock", submitted a listing application to the main board of the Hong Kong Stock Exchange. Since its inception, the superstar legend has been highly bound to Jay Chou's various business activities. From the perspective of equity structure, although Jay Chou does not directly hold shares, it is also inextricably linked to it.
Relying on Jay Chou's influence, the trading of superstar legends has been carried out in a prosperous manner, mainly engaged in two major businesses: new retail business and IP creation and operation business. According to the prospectus, the revenue of Superstar Legend in 2018, 2019 and 2020 was 94.68 million yuan, 86.58 million yuan and 457 million yuan, respectively. Profit was RMB8.8 million, RMB22.7 million and RMB75.6 million, respectively, representing a CAGR of approximately 193.1%.
In the income of the superstar legend, more than 70% comes from a product called Mogang Bulletproof Coffee, last year, the product sales reached 332 million yuan, the success of Moyi Coffee In addition to Jay Chou's star effect, but also rely on the huge micro-business force behind it.
In recent years, there are not a few celebrities doing micro-business, some people have made a lot of money with the help of the natural star effect, and there are more deadlocks due to product quality problems and model problems, and finally failed.
Regardless of whether the end of the idol is live streaming with goods or micro-business with goods, they all want to use their influence to maximize monetization. The problem facing the stars is the same as the problem that all consumer goods industry entrepreneurs need to face - how to rely on product power to obtain the market and form a brand.
If you just rely on the aura of the star to harvest fans, you will not be able to do it for a long time. This is also the same problem that Zhou Dong and the superstar legend behind him face.
Note: The content of this article is mainly from the reporter interviewed by pencil road and the public information on the Internet, and the arguments are inevitably biased and not deliberately misleading.
The company behind Jay Chou has annual revenue of 457 million
Jay Chou, who has been debuting for 21 years, has never lacked topicality, and this 42-year-old man can not only write songs, but also dabble in multiple business fields. A recent piece of news has brought Zhou Dong and the commercial map behind him into the spotlight.
Not long ago, Superstar Legend Group Co., Ltd. (hereinafter referred to as "Superstar Legend"), which was called "Jay Chou Concept Stock" by hong Kong media, submitted a listing application to the main board of the Hong Kong Stock Exchange. Superstar Legend said that the listing funds are mainly used to develop new products, increase brand exposure and product sales, create unique star IP and related IP content, sales and marketing.
According to the prospectus, Superstar Legend was established on March 17, 2016, is a new retail operator focusing on the sale of health management products and skin care products in social e-commerce channels, and has a 10-year IP licensing agreement with Jay Chou's artist agency Jewell Music, which has been given priority to carry out projects related to Jay Chou and his IP.
Although Jay Chou himself does not hold a stake in Superstar Legend, from the perspective of equity relationship, this company has an inextricable relationship with him. Jay Chou's mother, Ye Huimei, and Artist Agency Jewell Music boss Yang Junrong jointly hold 27.6% of the shares of The Star, each accounting for half of the shares; the two, together with Ma Xinting, the CHIEF Executive Officer who holds 27.6% of the shares, and Chen Zhong, who holds 9.2% of the shares in the management of artists, are regarded as the controlling shareholders and concerted actors of the superstar, accounting for a total of 64.47% of the pre-listing equity.
Not only that, but another familiar celebrity also appeared in the upper echelons of the superstar legend. Jay Chou's "royal lyricist" Fang Wenshan joined Superstar Legend last year as its chief cultural officer, responsible for the marketing and promotion of the group's products and creative strategy planning. The company said it is exploring the creation of a unique star IP centered on Fang Wenshan.
According to the prospectus, Superstar Legend has two main businesses:
First, the new retail business, accounting for 79.9% of the revenue, mainly sells magic carcass bulletproof coffee and da ren yue self skin care series. Superstar Legend began distributing Magic Bulletproof Coffee nationwide in April 2019. After June 30, 2021, mochi soda, mochi pastry, and konjac snail powder will be launched, and it is expected to be officially distributed in the fourth quarter of 2021. In the skincare market, Superstar Legend has launched a number of sub-brands of the da ren yue main brand offline products, including Dr. Mo Muscle and Miss Tea.
Comparison of gross profit of the superstar legend over the past three years
The second is IP creation and operation business, accounting for 20.1% of revenue. Including event planning and IP programs, licensing fees and sales of cultural and creative products. In 2017, Superstar Legend tailored an outdoor reality show "Zhou Youji" for Jay Chou. According to the prospectus, compared to other TV shows that aired from March to June 2020, the average ratings of the 12 episodes of "Journey Around" ranked first in the same time period.
At the same time, Superstar Legend is also a subcontractor, planner and investor in many of Jay Chou's major concerts. In 2017 and 2018, superstar legend participated in the planning of Jay Chou's world tour of 25 cities in China, "The Strongest on the Surface". In August 2019, the superstar legend single-handedly created the Zhanjiang Superstar Concert, and the box office pre-sale performance of this concert exceeded 10 million in 1 hour.
Regarding the relationship between the two businesses, Superstar Legend said in the prospectus: "We hope to empower its distribution channels, products and consumer procurement through our proprietary star IP and IP-oriented media content and activities." ”
Relying on the influence of Jay Chou's super IP, the trading of superstar legends can be described as booming. According to the prospectus, the revenue of Superstar Legend in 2018, 2019 and 2020 was 94.68 million yuan, 86.58 million yuan and 457 million yuan, respectively. Profit was RMB8.8 million, RMB22.7 million and RMB75.6 million, respectively, representing a CAGR of approximately 193.1%.
A bottle of bulletproof coffee that sells 332 million a year
The bulletproof coffee business is currently the backbone of the superstar legend.
This coffee was officially launched in April 2019, is a low-carbon weight management drink, mainly made of freeze-dried coffee, pure coconut oil, grass-fed butter and medium-chain fatty acid oil, the principle is to use high-quality fat instead of carbides to supplement energy, people will have a feeling of fullness after drinking, reduce appetite, and in the process produce a large number of ketone bodies, ketone bodies are excluded from the body by urine, to achieve the purpose of weight loss.
The prospectus shows that the sales volume of the superstar legend is extremely dependent on the brand influence of Magic Bulletproof Coffee. As of December 31, 2019, the year ended December 31, 2020, and the first half of 2021, sales of Magic Ballistic Coffee accounted for 83.0%, 72.8% and 72.4% of total revenue, respectively, all of which exceeded 70%.
Bulletproof coffee is a typical product of the ketogenic diet. In recent years, the raw carcass diet that claims to be able to "eat fat meat to lose weight" has gradually become popular. According to relevant statistics, the global ketogenic food market is expected to grow from $10.3 billion in 2018 to $17.8 billion in 2026, which has also attracted Nestlé, Danone and many new players.
It is reported that the magic carcass bulletproof coffee is jointly developed by the superstar legend and Hangzhou Hengmei using the ODM model, and Hangzhou Hengmei is currently the exclusive supplier of products, that is, OEM production. In other words, the research and development and production of the superstar legend rely on third-party companies, which are actually only responsible for publicity and sales.
According to the prospectus, the gross profit of the superstar legendary bulletproof coffee business is as high as about 70%. According to the China Insight Consulting Report, Superstar Legend is the company with the largest market share of bulletproof beverages in China, with a market share of 40.6%.
Behind the high market share is inseparable from Jay Chou's ability to carry goods. In June last year, Jay Chou participated in the production of the personal variety show "Zhou Youji" on Zhejiang Satellite TV, Netflix and other platforms. Superstar Legend promotes Magic Bulletproof Coffee through advertising, on-demand and discrete product implantation in the program, increasing the exposure of the product.
In April this year, Mogang Bulletproof Coffee continued to appear in the second season of "There are poems and far away", appearing more than 180 times in the show; the implant time was as high as 1199 seconds; and interacting with the same frame with star tour groups such as Hua Shao, Zhang Shaogang, Hu Haiquan, lai Meiyun and so on up to 73 times. In addition, in January 2020, the company invested in Ningbo Superstar Action Super Night to promote Mogang Bulletproof Coffee through various related marketing activities such as printed advertising, product display and gift giving at the concert venue.
However, the high dependence on Jay Chou's ability to carry goods has also led to the unstable revenue level of the superstar legend, and once the marketing publicity is reduced, the revenue will also decline. In the first half of 2021, the company's revenue was 166 million yuan, down 46.8% from 312 million yuan in the same period of the previous year. The profit of Superstar Legend in the first half of 2021 was 8.29 million yuan, down 87.4% from 65.8 million yuan in the same period of the previous year.
In this regard, the superstar legend explained that "the decrease in revenue generated by the sale of Magic Bulletproof Coffee is mainly due to the completion of the first season of "Zhou Youji" in June 2020, and in the first half of 2021, there are no related sales and marketing activities planned, and the company has not planned related concerts. ”
The reason for relying on marketing propaganda is also related to the low market awareness of bulletproof coffee. "Bulletproof coffee is very popular abroad as a healthy low-carbon water functional drink, and is loved by many technology companies and stars in Silicon Valley, but the popularity in the domestic market is not very high, especially the concept and products are too strange." Li Fei (pseudonym), the founder of a bulletproof coffee brand, once told Pencil Road.
It is also related to the controversy over the raw carcass diet itself. "A honey, B arsenic", the effect of the carcass diet depends on the individual's physique and degree of diet control, the effect is also very different, so it has been in controversy, and some medical practitioners have publicly stated that "not everyone is suitable for the carcass diet". On social media platforms, the discussion around "bulletproof coffee weight loss" showed a polarization trend, some claimed to have successfully lost dozens of pounds, and some complained about the "IQ tax", which rebounded after deactivation.
For the legend of the superstar who relies heavily on the bulletproof coffee business, the diversification of product layout is very urgent. "Rapidly changing entertainment environments and health management trends, along with consumer preferences, require us to continue to develop, produce and promote new products," Legends also said in the prospectus. ”
However, its real R&D capabilities are still lacking. As of the end of June 2021, Superstar Legend has a total of 173 employees, of which only 5 are in the product development department. Such a weak R & D force may adversely affect its survival and long-term development in the market.
The end of the star is micro-business?
Pencil Road found on the e-commerce platform that the price of a single box of magic carcass coffee is 258 yuan / box, each box of 7 sticks. Compared with similar products in the same industry, this price is not cheap, and the results of hundreds of orders sold by the e-commerce platform last month are not eye-catching.
Without relying on e-commerce, how does a bottle of coffee sell 300 million yuan a year? In fact, the success of Mogang Bulletproof Coffee relies more on the online distribution network, which is the micro-business that we are familiar with.
The prospectus shows that Superstar Legend has established a distribution network. Distributors further consolidate and expand their distribution network through the distributors they promote, some of which have been further developed into KOCs for products. KOCs can accumulate and promote products through word-of-mouth on the basis of private domain traffic based on celebrity IP.
Behind this huge distribution network is a company called Kunshan Ting luxury, and its trader Li Ting is known as the "queen of micro-business". Since 2018, Kunshan Ting luxury has become one of the distributors of superstar legendary skin care products, and the sales performance has made Kunshan Ting luxury subsequently become the general distributor of Magic Carcass Bulletproof Coffee.
As a trader, Li Ting frequently appears in various press conferences and media in a high profile, and Jay Chou, who is highly bound to the superstar action, also frequently comes forward to stand for the conference of the superstar action. In addition, it will also cooperate with the release of short videos to endorse the superstar action.
Behind the huge micro-business network is also facing many hidden dangers. For example, the legend of the superstar encountered two incidents in 2020 and 2021, and some funds in the bank account were temporarily frozen.
According to the prospectus, in June 2020, the local market supervision bureau in a fourth-tier city froze (including) several bank accounts of four group companies, Kunshan Ting Luxury and Li Ting on suspicion of pyramid schemes. In May 2021, the Market Supervision Bureau of a fourth-tier city froze , among other things , two group companies , Kunshan Ting Luxury and Li Ting ' several bank accounts.
In response to the two temporary freezes of accounts, the Kunshan Market Authority issued two inspection opinions in June 2020 and June 2021 respectively, judging that it was engaged in new retail activities through a legal distribution model. The full lifting of its frozen funds in July 2020 and July 2021.
In this regard, Superstar Legend also said in the prospectus that the misunderstanding of sales models by authorities or end consumers may lead to negative publicity and potential regulatory sanctions.
The direct and indirect participation of celebrities in micro-business marketing activities is nothing new, and the ending is mixed.
In 2013, actresses Zhang Ting and Lin Ruiyang founded the micro-business brand TST, and the annual sales once reached the level of 10 billion, causing widespread discussion. In addition, Lin Zhiying once founded the "Aribi Biotechnology" company to sell oral skin care products; Liu Jialing also founded the "Jialing Mask". But the business of the two ended in vain; Zhang Shaohan also repeatedly became popular on Weibo and variety shows to bring goods for micro-business products related to them.
Whether the end of the star is live streaming with goods, or micro-business with goods, they all want to use their influence to maximize monetization. The problem in front of the stars is the same as that of all consumer goods industry entrepreneurs, how to rely on product power to obtain the market and form a brand. If you just rely on the aura of the star to harvest fans, you will not be able to do it for a long time. This is also the same problem that Zhou Dong and the superstar legend behind him face.