Source: Restaurant Owner Internal Reference (ID: cylbnc)
Author: Wang Pan
01
Heytea "layoffs", Naixue profit warning
Entering the "internal optimization period" after high-speed expansion
In recent days, Xi tea because of the "layoff storm" screen hot search, Nai Xue's tea also issued a profit warning, although the revenue pre-increase of more than 40% year-on-year, but it is expected that in 2021 adjusted net loss of 135 million yuan ~ 165 million yuan, the fourth consecutive year of loss.
Looking ahead, a similar situation has occurred not long ago during the large-scale closure of the store and the founder's fierce debate with the employees.
These "top-notch" brands, which are favored by capital and surrounded by the media, seem to have entered a certain development cycle in unison after rapid expansion.
02
The Road of Thorns
In the past 2021, there have been many "highlight moments" for new tea drinks.
First, On June 30, Nai Xue officially rang the bell on the Hong Kong Stock Exchange and became the "first stock of new tea drinking". At the time of listing, the founder said that space is the second product of Naixue and the core component of the brand core, creating an "all-weather urban waiting room", which is the "third space" that Starbucks was talked about in the past.
However, against starbucks Naixue, to do experience, to do large stores, correspondingly also need to pay a cost price, according to the prospectus, in 2018, 2019 and 2020 January to September, Naixue in raw materials, employees, rental costs of the three expenses accounted for more than 80% of the total revenue, operating costs are high.
Two weeks after The listing of Nesher, Xicha, which announced the completion of a $500 million Series D financing, also experienced no small ups and downs.
At that time, the valuation of Xicha reached an unprecedented 60 billion yuan, refreshing the financing valuation record of the new tea market. Under the aura, it also faces many challenges: such as the slowdown in store growth, the decline in single-store efficiency, and the decline in average store profitability.
In the case of high financing and high per capita unit price, Neixue and Xicha were listed on the ground, losing money for four consecutive years, and the stock price fell like a flowing cloud, and issued a profit warning in early February; a store's growth rate slowed down, the ping effect declined, and faced a public opinion storm.
In addition to the two top streams, Net red brands such as Cha Yan Yue And Le Le Tea have also encountered many challenges in the past six months: the former lost more than 20 million yuan a month during the epidemic period and had to urgently adopt strategic contractions; the latter closed stores in many places last year, and in the face of rumors, the person in charge said: In the case of unattainable capabilities, the national expansion was carried out prematurely.
In addition, from the perspective of the general environment, according to the "2021 New Tea Beverage Research Report", the growth rate of the new tea market in 2021 will slow down from 26.1% in 2020 to 19%. Under the impact of the epidemic, more than 70% of new tea brands cannot support for more than 20 months.
03
What exactly are the "Hi Teas" facing?
Bidding farewell to the era of high growth, the problems of the new tea drinking track being covered up have been exposed. Including business management, organizational structure issues, but also including profit crisis and so on. At the stage of being draped in the halo of capital, these problems seem to be ignored, and now, looking at the collective challenges faced by The Heytea, many of the problems have similar shadows.
【Under the urging of capital, the pressure brought by rapid expansion】
Capital is always a conditional one. Take the money of capital, and the speed will be raised.
However, as a physical industry, new-style tea drinks cannot avoid the operation of one store after another, the precipitation and strengthening of organizational strength, and the construction and maturity of management systems. Coupled with the impact of the epidemic, many internal factors may not be able to catch up with the rhythm of capital, and many problems will naturally emerge.
Lin Lumin, an expert in the construction of the restaurant chain system, believes that the optimization of store expansion speed and organizational structure has not kept pace with the pace of development, resulting in the construction of talent echelons lagging behind. "The employment of the tea track seems simple, but in fact, there are high requirements from product design, standardization formulation, store selection, management, QSC inspection, etc."
Xicha and Naixue, which have multiple rounds of financing, have both ushered in the stage of rapid store expansion: Heytea "soared" in the second half of 2020, opening 60 stores in a month in September of that year. In stages, Heytea had a total of 695 stores by the end of 2020, but in 2021, until the third quarter, the number of company stores exceeded 800, and the expansion rate dropped significantly. In the past three years, the store growth rate is 139%, 78% and 26.3%, respectively.
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And Nai Xue, who is the "first share of new tea drinking", has just opened 326 new stores in 2021, which is slightly lower than the 350 previously planned. In 2018-2020, the company closed a total of 9 stores, but in the second half of 2021 alone, the company closed 10 stores.
In addition, under the rapid deployment, it is also necessary to consider the bearing capacity of the store. This can also be seen from the expansion and contraction of tea and lele tea.
[Secondly, the difficulty of making profits has become a common anxiety]
In the cost structure of tea drinking, raw materials and staff costs are the majority. According to the "China New Tea Industry Research Report 2021", because the cost of New Tea in China is relatively high, the profit margin of tea drinking enterprises is about 25%.
This is just an approximation, in fact, many brands can't reach it. Taking Nesher as an example, its financial report disclosed that the operating profit margin of the company's stores in 2021H1 was 19.2%, while this data was lower in the previous year, only 12.2%.
It should be noted that this is the profit margin, and the actual net profit of the enterprise is lower. Still taking Nesher as an example, in the first half of 2021, Nesher's operating income was 2.126 billion, but its net profit was only 48.2 million, and its operating net profit margin was only 2.2%. This means that for every 30 yuan of tea sold, Nai Xue can only earn about 0.66 yuan.
The revenue of Heytea in the fourth quarter of 2021 was 1.338 billion yuan, and it is estimated that the revenue of Heytea last year should be about 5 billion yuan. In the case of little difference in the volume of revenue between the two companies, Nai Xue's tea has been losing money for many years, and the probability of xi tea is also the same.
According to the data of Jiuqian Consulting Middle Office, from July 2021, the average revenue of Heytea and stores nationwide began to decline. Taking the Data of October 2021 as an example, the average revenue and sales efficiency of stores fell by 19% and 18% compared with July; compared with the same period in 2020 last year, it fell by 35% and 32%.
"The pressure to survive is the second hurdle facing the 'Hi Teas'. Under the rapid development, the brand's demand for funds and the demand for store survival rate are very high. How to maintain a higher brand viability? How sustainable the model is is also a top priority. Lin Lumin said.
【Core pain point: traffic crisis】
When a tea brand develops to a certain scale stage, the scale effect and brand effect on the development of the enterprise will gradually weaken. This is like a spell, and it is also a common problem for new tea drinks.
In early January, the official price increase was announced, becoming the first hot search in the industry for public years. And Xicha and Naixue "in step" chose the price reduction path.
Behind the seemingly different paths, price reductions and price increases are essentially a problem: the traffic crisis. Because of the expansion of stores, The density of Xicha and Naixue naturally dilutes the passenger flow, so they must use price means to attract new traffic and alleviate the problem of profit decline caused by the decline in passenger flow.
At the same time, due to the high unit price of customers, high-end brands represented by Heytea, Neixue and Lele Tea only occupy 7.7% of the market share of China's new-style tea industry, covering fewer people. The price reduction is conducive to expanding the market and increasing passenger flow. And through the increase of turnover, reduce the proportion of rental and sales and the proportion of manpower.
It is reported that since January this year, the operating income of Heytea has increased by 11.19% month-on-month.
The price increase of tea is because in the stock market, or in the main battlefield Changsha, due to the epidemic caused by the decline in tourist flow, forced to close nearly 100 stores. In the case that the density is already relatively saturated and it is difficult to have a new increase in passenger flow, the only way to keep the profits of existing stores and avoid the expansion of the loss as much as possible is to increase prices, increase customer unit prices and ping efficiency, and contribute more performance in limited scenarios.
At that time, the official explanation was that "the price has not risen for more than 5 years, and there are two main advantages: one is the brand dividend, and the other is the procurement dividend brought by the expansion of the scale." It can be seen that between the paving, traffic, brand potential, procurement costs, and profits, a set of invisible "dominoes" are interlocking.
【The "old wound" of product homogenization is difficult to heal】
Xiao Yao, China partner of Rees Strategic Positioning Consulting, once said: "Nesher's tea, Xicha, Lele tea brands have not yet established a real differentiated advantage, although each one believes that there are more preferred consumers, but the actual brand between the very strong fungibility." ”
Products with similar styles
Although high-end ready-made tea drinks have ushered in rapid development in the past few years. However, the characteristics of low product technical barriers, low industry entry thresholds, low consumer brand loyalty, and inconspicuous middle and high-end segments are obvious, at the same time, "Xicha" not only faces the fight of existing players, but also faces endless entrants.
An industry insider believes that the homogenization of products is an "old injury" that exists in the tea drinking track, coupled with the rapid development, so that brands pay more attention to "running horses", and ignore the uniqueness of shaping. "Coupled with the emergence of more and more so-called 'flat substitutions', these high-end brands have lost their bargaining power."
The consumption range of 11-20 yuan is still the mainstream Source: Ai Media Consulting
04
From Luckin's "In Situ Counterattack"
Or you can see the way out of the game
Qin Chao, the founder of the restaurant boss internal reference, believes that Luckin can be seen as an enlarged version of the new tea coffee track player specimen, the advantages and disadvantages have been put very large, the analysis of the challenges of new tea drinks, in fact, objective analysis of the development of Luckin can be inspired. "In the long run, the market is fine, and there is still a lot of space. The problem now is that the body is running too fast, the need to 'wait for the soul', and the problem of 'physical fitness is strengthened'. ”
At that time, Luckin "lost half a life" because of financial fraud time. I thought that the number of qi had been exhausted, but who knew, I counterattacked. In the final analysis, Luckin quickly completed the closed loop after a series of storms. Its "defensive" and "offensive" are very positive.
Defensive: reduce direct sales and shrink stores. Increase the number of franchise stores to maintain the state of returning blood.
Offensive: Increase differentiation and innovation, optimize cost structure, and refine operations.
Luckin's most fierce period of store opening was in 2018 and 2019, with a net increase of more than 2,000 new stores per year. The rapid expansion has led to the low quality of many stores, and even the problem of overlapping points in many places. After the counterfeiting incident, the pursuit of single-store profitability has become the primary action of the brand.
It is worth noting that while drastically reducing direct stores, Luckin's franchise stores have grown rapidly. Opened the strategy of "combining the dual mode of direct franchise".
Source: Luckin earnings report
From the perspective of "offensive", in 2020, Luckin Coffee launched 77 new products; in the first half of 2021, more than 50 new products were launched in one go. Create thick milk series, raw coconut latte, SOE specialty coffee and other industry hits, creating a data myth.
In addition, we actively carry out internal optimization and cultivate internal skills. Resist the temptation of scale and short profit, and actively optimize the cost structure and build private domain traffic. At the end of January, with the announcement by Dapu Capital that its lead group of buyers had become the controlling shareholders of Luckin, the former management represented by Lu Zhengyao completely withdrew. It marks that Luckin has ushered in a new stage of development.
From this point of view, today, the new tea drinks represented by "Xi Tea" seem to be able to learn from Luckin and sum up their experience. After all, with the superposition of factors such as changes in economic forms and shrinking consumer demand, the catalytic role of capital will weaken, and the internal drivers of brand, operation and organization will become more prominent.
--Summary--
Lin Lumin believes that the current "Xicha" may have two points to focus on: First, improve the organizational structure and welfare model, appropriately take care of the needs of front-line employees, strengthen the training of front-line partners, and pay attention to their psychological activities;
The second is to think about how to create an extreme cost-effective product line from the optimization of the regression product model. "Many brands are launching the second and third brands, including Heytea, and after getting the capital, they have started their own capital, and in fact, it is more important to improve their own value and brand power."
The short-term crisis learns from Ruixing, and the long-term trend, learning from Starbucks and McDonald's, and building real system strength, may be the next focus of "Hi Tea".
Time and place: May 18-19 / Poly World Trade Center Expo Center, Guangzhou