Backed by Philips, Suber, and Little Bear, this invisible giant "exploded" a market value of 3 billion

Image source @ Visual China

Wen | Bohu Finance, the author | Tang Bohu

Bo Hu nodded: air fryer, also waiting for spring.

A mouthful of air fryer sent a twenty-year-old business to the market?

On February 18, the "first share of air fryer" Biyi shares landed on the Shanghai Stock Exchange, which attracted widespread attention in the secondary market. One week after listing, its stock price rose from the issue price of 12.50 yuan per share to 29 yuan per share.

As of press time, the stock heat of Biyi shares has cooled down, and the stock price has fallen back to about 17 yuan per share, but the market value has also increased by 40% compared with the time of issuance.

As a veteran enterprise established in 2001, in the past two decades, Biyi shares once became the "king" of fryer production in the world, but it has not been famous.

On the contrary, after starting to produce air fryers, revenue has increased year by year, and recently it has been listed in the secondary market.

01, can not escape the "true incense" law

A few years before the establishment of the company, Wen Jiwang, the founder of Biyi Shares, turned to a number of tracks, including real estate, baby carriages, hair dryers, etc., all of which were involved.

During the years of floating and sinking in the commercial sea, he gradually realized that the development model of "one meter wide and one hundred meters deep" is more suitable for private enterprises.

So, interested in food, he began to produce fryers, determined to "use a lifetime to make a good pot that can be used for a lifetime."

After 2003, a small oil pan with Biyi attacked the domestic and foreign markets, until 2012 became the world's largest fryer production base.

Due to the company's business needs, Wen Jiwang often has to go to the foreign kitchenware market to investigate. He found that air fryers can make diets light and healthy, and they are very popular in overseas markets.

He thought, why is such a good product, no one in China uses it? So I made up my mind to create a domestic brand and pass on the concept of healthy eating to more Chinese people.

In 2014, Biyi co., Ltd. launched the research and development of air fryers, and successfully introduced them to the market a year later.

As a subdivision of small kitchen appliances, air fryers have been "hot" in the past two years, and in 2020 alone, Biyi shares sold 3.89 million air fryers.

But in fact, from the perspective of brand operation, the external competitive environment of Biyi shares is not very good.

After the outbreak of the epidemic in 2020, the "home economy" and "lazy economy" have promoted the small household appliance market to become hot, and due to the low entry threshold, more and more players have joined the melee.

From January to February 2020, there were only 12,000 registered small household appliances in mainland China, and by February this year, there were 1.19 million small household appliance enterprises in business, existing, moving in and out.

It is worth noting that in the first half of 2021, giants such as Midea, Suber, and Jiuyang still controlled nearly 65% of the market share of the small home appliance market, and with brands such as Xiaoxiong, Xiaomi, and Oaks, the top 10 brand market accounted for 79.3%.

Under the squeeze of the head, the imagination space left for a large number of mid-waist and tail enterprises is not large, and the price of air fryers is not high, and it is difficult for them to find a breakthrough in this regard.

02, is it not on the road or a "clear stream"?

"I bought An air fryer from Biyi, is this brand good?"

"Watching the live broadcast room bought Biyi, the price is very affordable, but I feel that the brand is not big, and I am entangled in whether to return."

Open the Little Red Book and search for Biyi, and users' impressions of Biyi are more or less the same. However, there are also many people who comment on "absolutely perfect" after use.

A slightly more expert will recommend Biyi, "This brand is good, it does OEM work for many big brands."

Indeed, most of Biyi's revenue sources come from brands, such as Philips, Neway, Bear Electrical Appliances, Suber and other brands, which are Biyi's customers.

However, the OEM "king" in the air fryer industry is only "bronze" in its own brand operation.

Biyi's own brand "Biyi BIYI" mainly sells different models of air fryers and sandwich machines, and there are very few categories. Its share of the company's revenue is also relatively low, its revenue in 2020 is 37.519 million yuan, and in the first half of 2021, it is even only 3.548 million yuan.

The most direct point of the reason for the delay in opening the situation is that in the era when marketing is king, Biyi shares do not know whether to say that it is not the way or a "clear stream".

Perhaps because the foundry contributes most of the revenue, Biyi shares are very good at the design and manufacture of air fryers, but they are not very concerned about sales and advertising.

In the first half of 2021, the company spent 211,900 yuan on advertising, plus 1,113,100 yuan of e-commerce platform promotion service fees, which was only 1.325 million yuan.

In the prospectus, although Biyi mentioned that the brand "builds the popularity of its own brand through Tmall, JD.com, Pinduoduo, Xiaohongshu, Douyin and other platforms, and enhances the company's popularity in the heating kitchen small household appliance market", these are the most basic operations, which are obviously not enough to improve the brand voice.

At the moment when midea, Jiuyang, Yamamoto and other head brands have always been strong, Biyi, as a waist brand in the industry, if you want to go out of the circle on the social platform, you must either have a very brilliant idea, or you are willing to spend money to invite stars, big V to bring goods, and then you have to buy traffic on the platform to increase exposure. But Biyi shares are too simple, no wonder many people have little understanding of this brand.

In addition, at present, the sales channels of Biyi shares are mainly concentrated in alibaba's E-commerce platforms such as Taobao, Tmall, and 1688, supplemented by a small number of dealers to promote the brand. Although it also has a layout on other platforms, sales are flat, and offline distribution has not been widely rolled out.

It is worth noting that in the first half of 2021, the gross profit margin of Biyi's own brand reached 28.09%, which is much higher than the ODM (original design manufacturer), OEM (original equipment manufacturer) business of 17.23% and 9.97%.

However, if the independent brand has not been able to "support", how much imagination space can Biyi shares have?

03. How long can the story of the air fryer be told?

Buffett is famous for saying, "Everyone only needs to focus on one thing to do well throughout their lives." This view coincides with Wen Jiwang's "make a good pot that can be used for a lifetime".

But Buffett can't stick to a stock, and it's impossible to focus only on a certain industry.

From this point of view, Wen Jiwang's concentration is higher, and the name of "the first share of air fryer" is not virtual. It mainly has air fryers, air ovens, fryers and other four product categories, of which air fryers accounted for 60.96% in the first half of 2021, and air ovens and fryers accounted for about 15% respectively.

Zhejiang Tianxi Kitchen Appliances and Ningbo Jiale Electric Appliances, which are also big names in the foundry of heating kitchen appliances, also bet heavily on air fryers.

The logic of this single product line operation has made the foundries eat dividends at the moment when the air fryer is hot, but how long this wave of dividends can be enjoyed is unknown.

The technical barriers to the production and manufacture of air fryers are not high. Bay shares has 118 authorized patents, of which 91 are appearance patents. Among its 8 invention patents, only 2 invention patents really belong to the air fryer.

This data is actually not a drag in the entire industry. According to the number of domestic brands applied for air fryer related patents sorted out by Semi-Cooked Finance, Jiuyang and Suber are more, with 16 and 3 in the United States, while brands such as Yamamoto and Liren, which have good sales, do not even have one.

It can only be said that producing air fryers is not a difficult thing to do. This can also be understood as a strong fungus that regards the manufacture of air fryers as the "lifeline" of the enterprise.

Another point is that the brand awareness of Biyi shares is not high, and the thin category makes it more difficult to form a scale effect.

Tmall's air fryer hot list, ranked in the top ten is mainly Changhong, Midea, Oaks, Bear and other brands, their common point is in the kitchen small household appliances this category, in addition to frying and baking air fryer and other products, but also take into account the kettle, electric pot, juicer and other subdivisions.

The advantage of forming a product matrix is that the exposure of the brand can be improved, coupled with the fact that consumers attach great importance to safety performance when purchasing home appliances, and subconsciously prefer large brands that are more perfect in various aspects such as after-sales service.

Moreover, from a long-term point of view, the small appliances in the kitchen are updated quickly, today's popular electric oven, tomorrow's popular is the electric cake stall, the day after tomorrow's air fryer on the top.

But the air fryer also has a "gas" day, if the biyi shares do not have more layout, the scale is done first, when a new wave of "artifacts" arrive, it is inevitable that they will be helpless.

Doing branding and doing OEM are essentially two development models. The private brand of Biyi shares is not yet mature, and what it tastes is more of the sweetness of OEM, and it only needs to focus on design and manufacturing, saving time and effort; making a brand requires a lot of effort in operation.

But how long can the story of an air fryer be told? Kitchen small household appliances are also a "100 meters deep" industry, heavy warehouse OEM equivalent to standing in the shallow water area to climb the railing on the shore, do not dare to lurk down, and do not want to leave the water.

Stone Technology relies on Xiaomi to rise, and its company's revenue from Xiaomi in 2016 was as high as 98%. In order to develop its own brand, achieve independent pricing, independent market development, and let enterprises go further, Stone Technology began to "de-milletize".

Of course, the process is not easy, but the results are not bad, and the retail share of the online market of stone technology sweeping robots has surpassed xiaomi, ranking third in the industry.

Of course, there are also some companies in the Xiaomi ecological chain who still choose to "hug" Xiaomi's thighs when they go to the IPO, Pixel Technology.

However, Sushi Technology can not become the control group of Biyi shares, because in addition to electric toothbrushes, there are hair dryers, toothbrushes, and razors.

We can't say which OEM or brand can make a company live longer, but no matter which path, just making a pot may limit the imagination of Biyi shares.

The story of the "first strand of the air fryer" can actually be more full.

References:

Shanghai Securities News: Chairman's Interview| Biyi Shares Wen Jiwang: Make a good pot that can be used for a lifetime