The incense that circles the earth 40 times is being abandoned by young people

Image source @ Visual China

Wen | blindly studied, the author | In the past years, typography | Yi Xin, Executive Producer | Small

The "first chinese milk tea" xiangpiao, which can circle the earth 40 times, did not have a good time in 2021.

According to the third quarter report of 2021, the company's net profit attributable to the mother in the first three quarters of 2021 was 39.3955 million yuan, down 11.45% year-on-year; deducting non-net profit - 22.6441 million yuan, down 1147.67% year-on-year.

Looking at the data of the third quarter alone, it can be said that it is a "double decline in profits": the third quarter achieved revenue of 886 million yuan, down 1.76% year-on-year, and the net profit attributable to shareholders of listed companies was 102 million yuan, down 6.2% year-on-year.

Under the unfavorable situation of successive losses, Xiangpiaopiao announced that from February 1 this year, the price of solid brewed milk tea (including classic series and good material series) will be adjusted, and the price increase range of the main products will range from 2% to 8%.

In the brewed milk tea market has a ceiling, Xi Tea, Naixue's tea, Michelle Ice City and other new tea brand expansion impact, has been criticized for "unhealthy", questioned "heavy marketing, light research and development" Xiangpiaopiao is making young consumers gradually lose interest. The "two-wheel strategy" on which high hopes were pinned on it did not seem to have played out the desired effect.

As the "first share of Milk Tea in China", Xiangpiaopiao was once quite brilliant.

In 2004, Jiang Jianqi, the founder of Xiangpiaopiao, discovered the structural defects of products in China's milk tea industry, that is, the store's current milk tea could not meet the consumer demand of consumers to drink anytime and anywhere, so he developed the first brewed milk tea product.

In 2017, after the third impact IPO, Xiangpiaopiao was successfully listed, and the limelight was the same.

Image source @ Xiangpiaopiao official micro

However, from 2018, Xiangpiaopiao's performance began to decline gradually, and 2020 became a watershed for its performance.

According to the financial report data, during the period from 2017 to 2020, Xiangpiaopiao's operating income was: 2.64 billion yuan, 3.251 billion yuan, 3.978 billion yuan and 3.761 billion yuan, respectively. From the perspective of growth rate, it was 23.1% in 2018, 22.4% in 2019, and in 2020, it fell below the positive range and became -5%.

The double continuous decline in performance and growth rate has led to the loss of confidence in Xiangpiaopiao in the capital market.

One of the objective reasons is that the growth of China's brewed milk tea market has peaked.

According to the data of Zhiyan Consulting, from 2014 to 2020, the growth rate of the domestic fresh milk tea market has been stable at more than 20%, but the compound annual growth rate of the solid milk tea (brewed milk tea) industry market size is only 5.29%, and even negative growth has occurred.

At the same time, the rapid entry of new teas with the help of capital is constantly eroding the market space of Xiangpiao.

According to the "2021 China New Tea Industry Research Report" released by iResearch, the market size of China's new tea industry in 2020 is 77.29 billion yuan, and it shows a rapid growth trend; it is expected that by 2030, the overall market size will be close to 200 billion yuan.

With the concepts of health and low sugar, as well as the social attributes and convenience of catering to contemporary young consumer groups, the new tea drinks that bloom everywhere greatly "threaten" the status of Fragrant Fluttering Brewed Milk Tea.

Under the two major external factors, Xiangpiaopiao, which has entered the 18th year of development, seems to be facing an unprecedented crisis.

Play the immovable "two-wheel drive" strategy

In fact, under the trend of changing consumer preferences and slowing down the growth of the brewed milk tea market, Xiangpiaopiao has not thought of changing, and has also tried to explore the second growth pole through the two-wheel drive strategy of "brewing + ready-to-drink".

On the one hand, new products are constantly introduced in brewing products. In 2020, Xiangpiaopiao launched six new products in the brewing series, and in 2021, it also launched products such as milk tea self-heating pot and milk tea Mandarin duck pot.

However, in today's young people who pay more and more attention to food health, Xiangpiaopiao brewed milk tea is still using vegetable powder (creamer) as a raw material, which is neither "healthy" nor "personalized", which is doomed to be difficult to impress young consumers.

In contrast, most of the current new tea brands play the concept of health, using fresh milk, fruit and raw leaf tea as raw materials, and at the level of sweetness, temperature, small ingredients, etc., they give young people multiple choices, which can meet their customized needs to the greatest extent.

On the other hand, Xiangpiaopiao began to develop more subdivided milk tea categories, trying to establish its own product matrix.

The emergence of liquid milk tea and juice tea products, although to a certain extent to alleviate the singularity of Xiangpiaopiao products, but from the results, their help to performance is not obvious.

According to the financial report data, in 2020, Xiangpiaopiao's annual revenue was 3.761 billion yuan, of which the annual revenue of brewing products reached 3.067 billion, accounting for 81.55% of the total revenue, and an increase of 4.48% year-on-year; ready-to-drink products were only 657 million yuan, accounting for only 17.47% of the total revenue, and down 34.62% year-on-year.

The same is true in 2021, the first three quarters of Xiangpiaopiao revenue of 1.974 billion yuan, of which, brewing income of 1.412 billion yuan, accounting for 71.53% of the total revenue, and an increase of 9.05% year-on-year, ready-to-drink revenue of 531 million yuan, accounting for only 26.90% of the total revenue, and down 7.56% year-on-year.

It is not difficult to see from the financial report that the ready-to-drink business, which is regarded as the second growth curve of Xiangpiaopiao, has not only not risen in the past two years, but has dragged down the company's overall performance, and currently accounts for less than 30% of the total revenue.

It can be said that Xiangpiaopiao's two-wheel drive strategy was not successful.

The old business market has peaked, the development of new categories has been frustrated, and under the impact of new tea drinks, there is not much room for growth in the future.

Heavy marketing, light research and development

According to the financial report data, in the first three quarters of 2021, Xiangpiaopiao's sales expense ratio was 25.45%, while the research and development expense ratio in the same period was only 1.06%.

In fact, heavy marketing and light research and development have always been the problems that Xiangpiaopiao has been criticized by the outside world.

Since then, Xiangpiaopiao has been running wild on the road where high advertising fees have been invested.

As TV advertising plays a smaller and smaller role in sales, Xiangpiaopiao has set its sights on marketing methods that use traffic stars to drive sales.

In 2019, Xiangpiaopiao launched Wang Junkai's endorsement of its brewing series products; in 2021, The official Announcement Wang Yibo, as the brand spokesperson, focused on launching the "Wang Yibo's Milk Tea" series of products - on the night of the official announcement, the topic of "Wang Yibo's Milk Tea" was read by 130 million and discussed by 1.38 million on Weibo.

Not only that, since Wang Yibo endorsed, Xiangpiaopiao has launched related peripherals, such as cups, mouse pads, humanoid standing cards, canvas bags, etc., attracting a large number of Wang Yibo fan users.

You know, just using a spokesperson to attract a wave of traffic is difficult to translate into lasting brand power. When the traffic dividend fades, what is left of such a lightly developed Xiangpiaopiao?

Resources:

"How fragrant and fluttering milk tea is not fragrant", NetEase Finance

"Xiangpiaopiao announced the price increase, is "brewing milk tea" really no longer play? " financial breakfast

"Fragrant Fluttering Can't Catch Young People", Praying Mantis Observation