On February 17, according to a number of media media reports, Wen Heyou, a Changsha internet celebrity restaurant brand that was once popular across the country, was undergoing a round of major layoffs. It is reported that this round of layoffs has been launched years ago, and the proportion of some departments being laid off is more than 60%. In addition, according to interface news reports, there are internal employees who broke the news that Wen Heyou did not have a year-end bonus for all employees in 2021, and the issuance time of performance bonuses was also delayed.
At this time, it has been less than a year since Wen Heyou settled in Shenzhen, set a queue of 20,000 tables, and waited for three days to enter the industry myth. The top Internet celebrities who were originally sought after by thousands of people are now hit by the head, and the stories experienced in the middle are intriguing.
In the view of the Institute of Value, from the pleasant tea at the end of last year, to the Xicha tea a few days ago, and then to today's Wenheyou, these popular new consumer brands are facing similar problems: the epidemic invasion, the industry's internal roll, high costs, unfavorable expansion and the cooling of the Internet celebrity economy... These kinds of disadvantages pushed them to the edge of the cliff.
Surviving is a priority at the moment, but how to dispel the haze overhead and bring the days to life ahead is a thorny issue.
Wen Heyou, who was rumored to be laid off, was shy in his pocket or did his strategy change?
For the rumors of layoffs that broke out in the past two days, Wen Heyou also responded to the media, indirectly acknowledging the fact of layoffs. According to reports, the head of Wenheyou Public Relations said that the layoffs are personnel changes brought about by business adjustments, which is a normal phenomenon:
"The company also has a number of positions to recruit, and there will be new people to join and new projects to be launched."
Based on the experience of the past few years, new consumer brands have come to the step of layoffs for no more than two reasons: tight funds and strategic changes. In the current situation of Wen Heyou, the Value Institute believes that the latter reason may be more important.
Wen Heyou has been the capital darling of the primary market in the past two years and has accumulated a lot of ammunition through financing. According to the information of Tianyancha, Wenheyoucai just completed the B round of nearly 500 million yuan in August last year, led by Sequoia China, IDG Capital, Warburg Pincus Capital, and followed by Country Garden Venture Capital, GIC, Yikai Future Industry Fund and so on. According to the data, the market valuation of Wenheyou reached nearly 10 billion yuan after this round of financing, becoming a hot new star on the new consumption track.
According to Wen Heyou at the time, the funds raised from the Series B financing will be mainly used for business expansion and product and supply chain research and development. Now less than half a year has passed since the financing, during which Wen Heyou has not landed a large project, and its capital chain should not be so tight.
Therefore, the key to the problem may lie in Wen Heyou's current expansion projects - especially the Nanjing Super Wen Heyou, which has invested heavily.
Among the many formats under Wenheyou, the highest operating cost is not super Wenheyou, regardless of manpower and rental costs, which are not in the same order of magnitude as Wenheyou Lobster House and Wenheyou Fried Society. According to media reports, most of the employees involved in Wen heyou's current round of layoffs are newcomers who joined after July 2021, and most of them belong to the Nanjing project team.
In fact, as the fourth city settled by Super Wenheyou, the construction process of Nanjing Super Wenheyou has not been smooth. In the middle of the year, due to the sudden epidemic in Nanjing, the offline consumer market in Nanjing cooled down significantly, and also slowed down the construction plan of Wen heyou. Nanjing Super Wenheyou, which was scheduled to open at the end of last year, has now announced that it has postponed its debut to 2022.
It is worth mentioning that due to the new projects such as Sanshan Street Vientiane Tiandi, Greenland Colorful World, and Oriental Wanhui City (North District) expected to be launched in 2022, Nanjing's offline consumption map is facing reshaping, the phenomenon of customer diversion will be more serious, and the competitive pressure of Nanjing Super Wenheyou will also rise in a straight line.
In addition, the cliff-like decline in the popularity of super Wenheyou in Guangzhou and Shenzhen may also change Wenheyou's development strategy – in the case of existing projects facing layers of obstacles, it seems that continued expansion is not a good idea.
At the end of last year, the big sign of the Guangzhou project was changed from "Super Wenheyou" to "Guangzhou Wenheyou", and the shop on the first floor was changed to "Huawen Lane" seafood street after a major change of blood, in order to create a more original old Cantonese atmosphere. The same change also appeared in the Shenzhen Wenheyou Project, following the replacement of the signboard from super Wenheyou to "Old Street Oyster Market" in September, and many internal areas also entered the state of enclosure decoration at the end of the year. According to Feng Bin, CEO of Wenheyou, Shenzhen Wenheyou will carry out a new upgrade:
"At present, the merchants who have withdrawn stores will be replaced, and the overall upgrade will be completed around May Day in 2022, after which it will present a cyberpunk-style future market style."
Shenzhen Wenheyou, which officially opened on May Day last year, ushered in a major renovation within a year, which shows that both consumers and Wenheyou executives are not very satisfied with the operation of this project.
It should be noted that the design plan of the Wenheyou Nanjing project is also reported to have been adjusted, and the newly determined theme is "The Ancient Capital of the Six Dynasties", which focuses on the traditional culture card. In the initial planning of Wenheyou, Nanjing Super Wenheyou positioning is Nanjing culture, theme entertainment and fashion, and it is obviously a popular route.
The transformation of Nanjing Wenheyou from popular to traditional, as well as a series of changes in Guangzhou and Shenzhen, highlight the vacillation and contradiction of Wenheyou: not only can not give up its own set of marketing rules, but also have to cater to the preferences of local consumers. This sense of separation not only greatly affected the reputation of the Wenhe friendship projects in Guangzhou and Shenzhen, but also brought hidden worries to the subsequent development of projects such as Nanjing.
Under the above layers of pressure, it is normal for Wen Heyou to press the pause button for the Nanjing project, after all, the management also needs to learn from the previous experience and re-plan the development route after that, so as not to re-transform Shenzhen Wen Heyou after opening for less than a year.
In the view of the Value Research Institute, Wen Heyou, who slowed down the pace of expansion, may also think about it: In addition to the theme of decoration, is it time to update the set of operating rules that were originally tried and blown up the whole network?
Behind Wen Heyou and Xi Cha stepping down from the altar, the law of internet celebrity is invalidating
Wen Heyou's current predicament is not unfamiliar - a few days ago, another top stream of Xicha was also exposed to layoff rumors, and Nai Xue's financial performance in the past year was not expected.
According to the financial report data, Naixue's revenue in the first half of the year was 2.126 billion yuan, and the adjusted net profit was 48.2 million yuan, which was difficult to achieve a turnaround. However, the capital market is not satisfied with this report card, and as of now, The stock price of Neisher is close to the peak. In the past four quarters, phenomena such as store closures and store transformation have also revealed the pressure on Neixue's operation. According to the data, a total of 7 stores were closed in the fourth quarter of Naixue, and another 23 standard stores were "downgraded" to smaller area and lower operating costs.
In the view of the Institute of Value, these new consumer brands that have encountered difficulties have many similarities in the history of their origins: in the early days, they all relied on a strong influencer effect to burst out of the circle, and the number of queues was exaggerated; in the past two years, there have been aggressive expansion plans, but the market performance has not been satisfactory.
From this point of view, their "collective winter" may have been arranged in the dark.
According to the plan proposed by founder Wen Bin in 2019, Wen Heyou will open ten super Wenhe Friends within five years and settle in foreign first-tier cities such as Beijing, Shanghai, Hong Kong, and even Los Angeles. At that time, Shenzhen Super Wenheyou was still under construction, Nanjing Super Wenheyou had not yet started construction, Guangzhou and Changsha Super Wenheyou were in their heyday, and Wenbin's grand ambitions won the trust of the capital market to some extent.
As for Xicha, 2019-2020 is also a period of concentrated store opening, with 220 new stores and 304 stores opened respectively, with a year-on-year growth rate of more than 130%. Although Heytea has not announced the number of stores to open in 2021, from the development plan proposed when it completed the $500 million Series D financing in July last year, expansion is still one of the main tasks of Heytea in the past year.
However, whether it is Super Wenheyou or Xicha, it has to face the test of customer flow decline brought about by the retreat of consumers' freshness, as well as high marketing expenditure and low conversion rate.
Taking Xicha as an example, jiuqian consulting middle office data shows that since the second half of 2021, the ping efficiency and average revenue of stores across the country have shown a downward trend, revealing the dilemma of customer flow decline. Among them, sitting on the National Day Golden Week and supposedly be the peak consumption season in October, the average revenue and sales efficiency of Heytea shops fell by 35% and 32% year-on-year, respectively.
Of course, there are not only xi tea and Wen Heyou who have this trouble, the tea of Nai Xue mentioned earlier, Master Bao, who was also popular before the expansion, has not been able to get out of Changsha's tea beauty, and these popular new consumer brands have encountered similar bottlenecks.
In the view of the Value Research Institute, the "collective winter" of new consumer brands can be mainly attributed to two points: one is the lack of competitive barriers, and the emergence of a large number of competitors dilutes the source of customers; secondly, the failure of the law of Internet celebrities, and the popular Internet celebrity economy has also ushered in a significant cooling.
On the one hand, most new consumer brands do not have their own differentiated advantages, and they can be highly reproducible, which is also a common problem for most new consumer brands.
Taking the new tea as an example, according to the statistics of iResearch, as of the third quarter of last year, the number of chain new tea brands in China reached 163, and the three first-tier cities of Shanghai, Guangzhou and Beijing accounted for more than 110.
With more and more players, differentiation naturally becomes a luxury. It is an accepted fact that there is not much difference in taste between Hee Tea and Nai Xue and Le Le Tea, which are also the main fruit teas, and product collisions are also common. For example, last year's explosive oil citrus, raw coconut and other products, several head brands have their own products, which is not high for consumers, and it is difficult to establish their own competitive advantage.
And it is precisely because the degree of repetition is too high and innovation is too difficult, the trend of inner rolls of new tea brands has become more and more obvious - the first is the increasingly complex and luxurious milk tea ingredients. Knowing that the high-quality food topic answer to the main "Fu Peach Nine Points Full" said bluntly in his own evaluation, now there are more and more milk tea ingredients, which is simply in line with the eight treasure porridge:
"I opened the takeaway software to order a cup of milk tea to drink, and the small ingredients in the feeding area opened the door to a new world." Is this milk tea? This is eight treasure porridge bar. ”
As for Wen Heyou, although the replicability is not as strong as that of Xicha and Naixue, various "local editions of Wenheyou" have also emerged in the past two years.
For example, the Bamboo Forest Hotel in Yancheng, Jiangsu Province, played the slogan of learning from the Wenheyou model, and after reopening on October 30 last year, the single-day passenger flow exceeded 50,000 - you know, the local permanent population is less than 7 million. Since then, the Zhengzhou edition of Wenheyou and the Fuzhou edition of Wenheyou have flocked to the scene. Of course, their operating experience, marketing effect, and hardware facilities are not as good as those of genuine wen and friends, but they can't stand the local advantages of others.
Guangzhou Wenheyou changed its name and Shenzhen Wenheyou upgraded in order to increase local attributes. But in this regard, compared with the homegrown local brands, perhaps Wen Heyou really has natural defects. In a short period of time, these "local editions of Wen and Friends" will not pose a threat to the real Wen Heyou, but in the future, it is difficult to say whether they will become a resistance on their expansion path.
On the other hand, in the past two years, the traffic of new consumer brands has declined at a speed visible to the naked eye, and the marketing strategies that rely too much on content platforms such as Xiaohongshu and Weibo are no longer effective, but there are frequent rollovers.
For example, the chestnut tea launched by Nai Xue in the autumn of last year became popular after attracting a large number of Little Red Book bloggers to punch cards, and a large number of "Little Red Book Girls" flocked to it, but then it was revealed that the punch card bloggers gave milk tea "feeding" in order to take photos.
Due to the wrong goods, Nai Xue has been accused by many consumers, but his heart is full of grievances. Bo main traffic, brand side to exposure, the two sides should have been a match made in heaven. However, due to the fact that the attraction of Ne Xue and Xicha is not as attractive as in the past, and the traffic battle on platforms such as Xiaohongshu Weibo is becoming more and more sticky, bloggers have to increase their popularity through their own ways.
For the rollover incident of the new product evaluation, the Value Research Institute believes that the punch card blogger must be the responsible party. However, behind the dislocation of demand between the two sides, it reflects the double challenge of the decline in the popularity of new consumer brands such as Xicha Naixue and the cooling of the Internet celebrity economy.
In the days to come, these popular new consumer brands want to get out of the trough, afraid that they will have to explore another development model.
The second half of new consumption: farewell to marketing is king, and consolidating internal strength is the key
Marketing is king, is the common point of these new consumer brands mentioned above, understand marketing, can grasp the hot spots is also the key to their rise. For example, Wen Bin of Wen Heyou is a heavy fan of Weibo.
However, as mentioned earlier, with the cooling of the Internet celebrity economy and the fading of online traffic, relying on marketing is no longer enough to make Heytea, Wenhe and friends sit firmly in the country. The Value Institute believes that they should take the opportunity of adjusting their development strategies to "consolidate their internal strength" - this is mainly reflected in two aspects, one is to strengthen supply chain management, and the other is to improve the standardization of daily operations, both of which are closely related to reducing operating costs and scale expansion.
Due to the difference in business formats, the pressure on wenheyou supply chain is relatively small, and its challenge is mainly in the standardization of operations. In an interview in the early years, Wenheyou CEO Feng Bin once bluntly said that Wenheyou's business model is essentially the same as that of the second landlord of commercial real estate, which brings a lot of challenges to its management:
"80% of the formats in the Super Wenheyou store are catering, but the revenue from catering accounts for about 50% in the ideal state. Due to the capped richness of our business, we need to sacrifice efficiency to finely polish when introducing external brands. ”
In fact, for new consumer brands such as Wenheyou, which have high operating costs and slow expansion, improving the degree of standardization is an important way to enhance comprehensive strength and reduce costs, and it is also the basis for long-term development. But at present, Wen heyou has not yet found a perfect balance between the speed of expansion and the degree of standardization.
It is worth noting that after the completion of the B round of financing last year, IDG Capital mentioned a detail in the announcement: IDG will provide all-round assistance for Wenheyou in the construction of the internal digital system. From this information, it can be seen that Wenheyou has realized its own shortcomings in digitization and standardization, and intends to strengthen it. Of course, the transformation and upgrading of Wenheyou will not be limited to the supply chain field, and a standardized set of site selection, investment and follow-up management systems will be established as soon as possible in order to clear the obstacles for subsequent expansion.
As for new tea brands such as Xicha and Naixue, compared with Wenheyou, the pressure on the supply chain is much greater, and it is more important to improve the level of supply chain management.
Compared with Wen Heyou, the degree of digitization of Xicha and Naixue is not low. On the side of Xicha, as early as 2017, the ERP system was launched, and the digital upgrade of procurement, inventory, distribution management and other links was carried out, and the degree of standardization was second to none in the industry.
The situation is similar for Nesher, who sees the digital supply chain as one of its key selling points in the prospectus. According to public information, Naixue is equipped with its own IT self-research team, store management, ordering, and clerk scheduling are automated, and the procurement and distribution of raw materials are also digitally operated like Heytea, and the efficiency is quite prominent.
But what they all have in common is that the cost of raw materials becomes more uncontrollable due to insufficient control of raw materials upstream in the supply chain — especially as new products are constantly introduced to stimulate consumers. According to the statistics of iResearch Consulting, in the cost structure of domestic chain new tea brands, the cost of raw materials and ingredients accounts for the highest proportion, at 41.1%, which is the sum of employee salaries and shop rents.
In this context, strengthening the control of upstream raw materials is the common effort of Neixue and Xicha.
Write at the end
Looking back at the development process of a number of new consumer brands in China, the Value Research Institute found an interesting phenomenon: in the hearts of many domestic brands, there is a common white moonlight - Disney.
Bubble Mart founder Wang Ning made a vision at the beginning of his business that "give me another five years, Bubble Mart will become the most Disney-like enterprise in China", and Wen Bin also said in an interview with the media that Wen Heyou will "be the Disney of the restaurant industry in the future." ”
However, like Hermès, another business myth that has been enshrined by countless latecomers, in recent years, all companies that have actively or passively labeled the "XX World Disney" have been in a sad situation.
Everyone wants to become the next Hermès and Disney, which is not wrong in itself, but we can't just see the high-end luxury of Hermès can't see the meticulous craftsmanship and quality behind it, nor can we only see the scenery in front of Disney and can't see the set of IP incubation and operation processes behind it.
At the end of the day, there is only one Hermès and only one Disney, and their success is backed by decades of brand influence, market share and differentiation, as well as the luck provided by the times, and their brilliance is beyond replication.
For local brands such as Wen heyou, letting go of obsession and doing a good job may be the right way.