Image source @ Visual China
Wen 丨 Blue Shark Consumption, Author 丨 Chen Shifeng, Editor 丨 Lu Xucheng
It's the annual "Queen's Day", and major e-commerce and short video platforms are selling the gift of "Queen". Food, cosmetics, accessories, drinks, and more. Today, Blue Shark Consumption does not want to discuss how to do Queen's Day marketing, but wants to dismantle a company and tell everyone how to systematically collect the IQ tax of "queens" to create a company to be listed.
As a traditional tonic with a high recognition and long history in China, bird's nest has a market size of 40 billion yuan, 75.5% of consumers are women, and the age is concentrated in 25-45 years old. This is the group with the most purchasing power. It is said that women's business is easy to do, and selling bird's nest to "queens" is a good profiteering business.
Take the Yuanqi Bowl Yan Gift Box that Yanzhiwu is promoting on the Jingdong 3.8 "Queen" Festival as an example, the retail price is 1980 yuan for 10 bowls, and each bowl is 198 yuan. According to the prospectus of Yanzhiwu, the average sales cost of Yanzhiwu Bowl Yan products is 68.35 yuan / bowl, the average sales price is 158.86 yuan / bowl, and the sales cost has been added to the cost of advertising, packaging, etc., but it still makes Yanzhiwu have a 2.32 times interest rate difference. This is not the most frightening, what is even more terrifying is that the Yuanqi bowl swallow contains only 1.8g of edible bird's nest ingredients per bowl, and the rest are all bargains such as water and rock sugar. How much is the price of bird's nest raw materials for 1g of Bird's Nest? 11.31 yuan (the price in the first half of 2021), equivalent to the bowl of swallows priced at 198 yuan, contains only edible bird's nest ingredients worth 20.358 yuan, and the spread in the middle is nearly 10 times.
The commodity interface of the JD.com platform of Yanzhiya
This is the IQ tax that queens pay. This is also the basis for Yanzhiwu to spend more than 200 million yuan in advertising expenses (237 million yuan in 2020, and advertising expenses account for 18.27% of total revenue) in CCTV and other media every year.
Through the wild collection of THE IQ tax of "queens", the revenue of Yanzhiwu reached 724 million yuan, 951 million yuan and 1.299 billion yuan from 2018 to 2020, and reached 707 million yuan in the first half of 2021.
At the end of 2021, Yanzhiwu, which has been established for 24 years, disclosed the prospectus and intends to be listed on the main board of the Shanghai Stock Exchange, raising 1.019 billion yuan and releasing 25% of the equity. Based on this calculation, if it is successfully listed, a leading company with a market value of more than 4 billion yuan will appear in the bird's nest industry.
Founded in 1997, how did Tsubame House start as a workshop, seize the preferences of the "queens", collect IQ taxes like crazy, and grow? Will its IQ tax business be sustainable?
01, take a nice name, reduce the threshold of consumption
Huang Jianyuan, the founder of Yanzhiwu, is a high school math teacher in Fujian. Because of his location on the southeast coast, Huang Jian was exposed to interesting things related to "maritime business" from an early age, and after three years, he "tired" of his boring teaching career and resigned to go to the sea.
Huang Jian's entrepreneurial impulse came from a trip to Nanyang: in Singapore, Huang Jian found that "bird's nest shops can be seen almost everywhere", which is the afterglow of the ancestors of Nanyang in the Ming and Qing dynasties - after the Tang Dynasty was introduced to China, under the cooking of the "food for the sky" Chinese, bird's nest gradually became a nourishing and delicious ingredient, and later spread to Taiwan, as well as Southeast Asia. Huang Jian realized that with the improvement of the living standards of the Chinese people, the consumption tide of bird's nest will not only return, but also expand more, which contains huge business opportunities.
In "Dream of the Red Chamber", bird's nest has "appeared" many times
Bird's nest, as the name suggests, is the nest abandoned by swallows after building their nests and giving birth, which is divided into cave swallows and house swallows. Cave swallow nests are on the cliffs, picked dangerously. Most of the bird's nest that people eat now is artificial bird's nest - the bird's nest produced by the swiftlet in The nesting of artificially constructed bird's nests in Malaysia, Indonesia and other countries. Locals simply attract swiftlets into nesting without artificial feeding. With the rapid development of China's bird's nest market, the sales revenue of mao bird's nest is considerable (11.31 yuan / g, 2021), and the Indonesian and Malaysian bird's nest industry has developed rapidly.
Bird's nest is a magical industry, raw materials in Indonesia, Malaysia and Thailand these Southeast Asian countries, Indonesia and Malaysia raw material bird's nest imports accounted for 90% of China's bird's nest imports; consumption is almost all in China.
At that time, China's bird's nest enterprises mainly did the circulation of bird's nest, that is, import - wholesale - consignment sales, and most of the consignment terminals were state-run pharmacies in various regions. Because the way to consume bird's nest after 60-70 is to buy bird's nest raw materials back to clean and stew themselves, the profit and imagination space are not large.
Woolly bird's nest (i.e. raw raw bird's nest)
Huang Jian tried to break this situation. In 1997, Huang Jian used the ground floor of his house of more than 70 square meters to transform a processing room, purchased bird's nest from Southeast Asia, made some simple packaging, labeled the "Double Danma" brand, and rented a counter in the Hualian Commercial Building on Zhongshan Road in Xiamen.
This move means: first, bird's nest, which is not only a category, but also a brand; second, bird's nest sales are no longer limited to state-run channels and have begun to be marketized. Huang Jian's bird's nest distribution business has become bigger and bigger, and has developed dealers (distribution points) in many regions. In order to make consumers remember better, Huang Jian changed the brand from "Double Danma" to "Yan's House".
The traditional way of eating bird's nest is that consumers buy bird's nest raw materials, and then go home to foam, pick hair, stew, the process is very cumbersome, consumers are difficult to grasp the heat, pulling up the threshold for bird's nest consumption. Huang Jian has a kitchen for each store, in addition to bird's nest sales, but also provides customers with "spot, eat, stew, deliver" service, similar to the later "fresh stewed bird's nest" model, but it was born more than 10 years ago.
Due to the relative lack of supply chain, logistics and other infrastructure at that time, the exploration of "spot, eat now, stew, and deliver" services was very difficult, and it was not until 6 years later that there was a certain effect, and franchisees soon expanded to more than 100.
After 2013, with the improvement of the purchasing power of the Chinese people, as well as the yanzhiwu, xiaoxian stew, Tongrentang and other enterprises to make bird's nest into a bowl/bottle, ready-to-eat retail products, and sold through e-commerce channels such as Tmall, JD.com, Vipshop, etc., successfully covered and attracted younger female groups such as the post-80s and post-90s, the market scale has expanded sharply.
According to the "2020 Bird's Nest Industry White Paper" released by the State Bird's Nest Commission, between 2013 and 2020, the size of China's bird's nest market soared from 6 billion yuan to 40 billion yuan, with a compound annual growth rate of 33%. In this new blue ocean of 40 billion yuan, Yanzhiwu has also eaten a market share of nearly 1.3 billion yuan, becoming the industry leader.
Bird's nest market size from 2010 to 2020
02. Online + offline joint harvesting
In fact, as an "old and fresh" business, the bird's nest industry has never been calm.
In 2011, Yanzhiwu suffered the biggest crisis since its inception - the "poisonous blood swallow" incident: the Zhejiang Provincial Administration for Industry and Commerce found that the nitrite content of more than 30,000 blood swallows exceeded the standard, the maximum exceeded the standard by 350 times, and the unqualified rate of blood swallow products was as high as 100%. As the leader of the bird's nest industry, The House of Swallows has been hit hard. How to reverse the decline and continue to harvest the "queens"?
In order to regain the trust of the "queens", Yanzhiwu launched the first ready-to-eat bird's nest product in the bird's nest industry - bowl swallow, emphasizing the "deep processing of 49 professional processes", so that the natural nitrite in the bird's nest was reduced to the "undetected" level; highlighting the "after 121 degrees Celsius, 1140 seconds of stewing method, and encapsulated with bottle-level materials", so that the product can be standardized; the traceability code is pasted on the product packaging, and consumers can scan the code to see the whole production process, including product source, production date, manufacturer information, etc.
Ready-to-eat bird's nest that can be eaten when opened
It has to be said that the Chinese people have a natural recognition of the tonic effect of bird's nest, and the performance of Bird's Nest has soared after innovating products. From 2018 to the first half of 2021, The Bowl Swallow has been the bulk of the sales of The House of Swallows, accounting for 69.88%, 56.64%, 41.94% and 47.23% respectively.
After 2018, under the hype of new bird's nest players such as Xiaoxian Stew, fresh stewed bird's nest became popular, and Yan's House also launched its own fresh stewed bird's nest. In 2018, the sales of fresh stewed bird's nest in Tsubame House were 9.8789 million yuan, accounting for only 1.37% of the total sales. In 2019, the sales of fresh stewed bird's nest in Yanzhiya have increased to more than 100 million yuan, accounting for 11.32% of the total sales. In the first half of 2020 and 2021, fresh stewed bird's nest accounted for more than 27% of total sales.
Tsubame House product classification breakdown
In addition, Bird's Nest House is also committed to developing more bird's nest derivatives, such as bird's nest porridge, bird's nest mooncake, etc., through the extension of the product line to meet the diversified needs of "queens" gifts.
Second, cut down franchisees, "online + offline" comprehensive harvest "queens". The group of "harvesters" in the House of Swallows is clear – the "queens" with purchasing power (aged 25-45 years old) will spread the channels wherever they are.
After 2018, Yanzhiya gradually cut down franchisees and increased the laying of direct and distribution stores, which is actually related to the later products of Yanzhiya. For example, the bowl swallow, does not need to be processed like the early need for stores, all are central kitchens to do a good job, into retail products, the terminal only needs to sell, more suitable for opening a part of the flagship store, while the scale of distribution model.
There are two types of directly operated stores in Tsubame House: First, independent stores (also image stores and flagship stores), mainly located in commercial centers, transportation hubs and other places. The store pays attention to the decoration style and space design, which allows consumers to taste the bird's nest at close range, and has multiple functions such as selling bird's nest goods, experiencing bird's nest culture, and enhancing the brand awareness of bird's nest house. Second, the shopping mall counter, opened in a department store or large supermarket, can use the flow of people in the mall and supermarket to quickly obtain customers, and this cooperation model finally calculates the revenue share according to the contract. As of September 30, 2021, the Company had 113 directly operated stores.
A Yanzhiwu directly operated store in Nanchang
In order to seize the market, Yanzhiya has adopted a variety of methods, including mergers and acquisitions, to expand. For example, in 2014, Yanzhiwu has invited two major distributors, Zheng Wenbin and Li Youquan, to join the shares and become the co-founders of the company. By 2021, Yanzhiwu had acquired their operations in Beijing, Changchun, Harbin and Taiyuan.
In order to better and more efficiently "harvest" the new generation of "queens" who have been educated by e-commerce and short videos to new buying habits, Yanzhiwu has increased its online marketing investment after 2018, through online direct sales (e-commerce platform flagship store), online distribution (third-party monopoly), online consignment sales (e-commerce platform warehousing), etc., with the help of 618, double eleven and other festival marketing activities, sales continue to increase, from 2018 to the first half of 2021, The sales amount of Yanzhiwu online channels accounted for 38.92% respectively. 46.71%、55.51%、51.3%。
Tsubame House online and offline sales
The products and channels of Yanzhiya work together to achieve the coverage of different groups of people. Fresh stewed bird's nest is mainly sold in online channels, focusing on young consumer groups after 90 and millennials; the products sold online and offline channels are different, online products are mainly "small", such as Small Red Bowl, Xiaojing Bowl, customers are 20-35 years old female consumers; offline products are mainly "expensive", such as premium models, etc., and customers are mainly female consumers over 35 years old.
Third, ask celebrities to endorse and brainwash "queens" by smashing ads.
In response to the "queens'" demand for rigid health care for beauty and beauty, Huang Jian consciously highlighted that bird's nest is a good product for women's beauty care, and chose the immortal goddess as an opinion leader and spokesperson. The earliest spokesperson was Hong Kong's Liu Jialing, who mainly targeted Hong Kong, the largest consumer market of bird's nest in the early days. Taiwan's Lin Chiling and mainland Zhao Liying have also been "captured" by Yanzhiwu and have become the opinion leaders of the "noblewoman" and the "young girl" of Miaoling, and the marketing is extremely accurate.
Endorsement of Liu Jialing's Yanzhi house
In addition, Yanzhiya is also willing to spend a lot of money to promote through CCTV, Central Broadcasting, aviation media, etc., which cover the most purchasing power of high-end women, that is, we often call the queens. The reason why Yanzhiwu was able to break into the circle of "central media" was not only because of its wealth (in the first half of 2018-2021, the advertising and publicity expenses of Yanzhiwu were 136.0110 million yuan, 187.3998 million yuan, 237.3389 million yuan and 122.3849 million yuan), which also depended on its director Liu Zhen, who served as a cadre of the State Administration of Radio, Film and Television, and had a number of media-related companies under his name, which were extremely influential in the circle and were hired as directors by Yanzhiwu.
Of course, Yanzhiya is also very good at using new marketing media and marketing methods, such as Douyin, Himalaya FM, etc. for brand promotion, using short video live broadcast with goods, small red book planting grass and other ways of marketing, greatly improving the voice of the brand.
Tsubame House consolidated income statement
03, collected IQ tax but still do not make a lot of money?
Bird's nest is undoubtedly a profiteering business. But Blue Shark Consumption looked at the data of Yan's House and was stunned. From 2018 to the first half of 2021, the gross profit margin of Yanzhiwu's main products was 51.63%, 48.33%, 48.51% and 51.04%, respectively, with a long-term of about 50%. However, the net profit attributable to Yanzhiwu was only 63.29 million yuan, 79.1 million yuan, 120 million yuan and 63.69 million yuan respectively, and the net profit margin was 9.09%, 9.37%, 8.28% and 8.74%, all less than 10%.
Blue Shark Consumption found that the reasons why the gross profit of Yanzhiwu products is higher but the profit is not high:
1, advertising costs are too high. From 2018 to the first half of 2021, the sales expenses of Tsubame House were 234 million yuan, 308 million yuan, 383 million yuan and 198 million yuan, and the sales rate was maintained at about 30% all year round. Among them, the advertising expenses in the same period amounted to 136 million yuan, 187 million yuan, 237 million yuan and 122 million yuan, accounting for 18.78%, 19.72%, 18.27% and 17.32% of the sales revenue, respectively. High advertising investment, in exchange for sales growth - from 2018 to 2020, the sales volume of Yanzhiwu gradually increased, respectively, 5.2203 million bowls / bottle, 8.1008 million bowls / bottle, 15.2652 million bowls / bottle, and in the first half of 2021, it reached 7.9877 million bowls / bottle.
In order to do the sales volume, the factory price of bowl swallow fell from 180.88 yuan in 2018 to 158.86 yuan in the first half of 2021, and the factory unit price of fresh stewed bird's nest in the same period fell from 134.55 yuan to 51.52 yuan, all the way down.
Tsubame House Bowl Swallow Sales
Sales of fresh stewed bird's nest in The House of Swallows
2, the product has no technical content. Bird's nest is also a high-grade supplement, but in fact, its "technical content" is not high. Yanzhiya's research and development expenses are not high, accounting for 1.8% of total expenses in 2018 and falling to 1.3% in the first half of 2021. Such a product with no technical content, more than 50% of the gross profit is already very good.
R&D expenses of Tsubame House
3, raw materials rely on imports. Since bird's nest products have no technical content, Yanzhiya puts the selling point on the import of raw materials. Yanzhiwu insists on using imported bird's nest with compliance traceability, but it will not personally go upstream to purchase, but entrust it to suppliers, in 2018, 2019, 2020 and January-June 2021, the procurement amount of the top five suppliers of Yanzhiwu materials accounted for 82.33%, 82.14%, 78.11% and 78.51% of the total procurement in the current period, respectively, with a high degree of concentration. Moreover, bird's nest should be imported from Indonesia, Malaysia and other Southeast Asian countries, and the freight is not low.
Procurement of the top five suppliers of Yanzhiwu in the first half of 2021
4, "sea of people" pick swallow hair. The production base of Yanzhiwu is located in Xiang'an District, Xiamen, and although the current picking link of bird's nest is operated in a modern dustproof room, the operation method is still a traditional and pure manual way. According to media reports, Yanzhiwu insists on using 800 female workers with a vision of 5.0 or above to pick the wool by hand to ensure the quality of each bird's nest. This traditional sea of people operation mode, there is no doubt that the cost is not low, but also may lead to quality problems in the product. On the black cat complaint, Blue Shark Consumer saw that there were consumer complaints that Yanzhiwu had eaten diarrhea. Yanzhiya obviously attaches great importance to the handling of complaints, and there are only 13 complaints on black cat complaints, and most of them are handled at the first time.
5, a large number of bird's nest. At the end of 2018, the end of 2019, the end of 2020 and the end of June 2021, the carrying amount of Tsubame's inventory was 136.5651 million yuan, 90.7714 million yuan, 253.9415 million yuan and 247.8187 million yuan, accounting for 45.19%, 24.52%, 45.38% and 46.91% of the current assets, respectively. The reason why The House of Birds has a large number of bird's nests is because the bird's nest has been made into a retail product for easy storage, and because the House of Birds needs to purchase a large number of overseas bird's nest raw materials, there is uncertainty in the middle, and it is necessary to reduce the cost fluctuations caused by changes in raw material prices through futures.