Image source @ Visual China
Text | Bohu Finance, author | Tang Bohu
Relying on crazy expansion, The Ice City of Honey Snow once became a "myth" in the tea drinking industry.
In June 2020, There were nearly 10,000 stores in Michelle Ice City. By October 2021, Michelle Ice City's stores had doubled to more than 20,000. It took almost a year to complete the total number of stores opened in the previous twenty years.
In fact, in addition to vigorous expansion in 2021, Michelle Ice City's actions in supply chain construction and brand layout are also more frequent than ever.
This "tea giant" with more than 20,000 stores seems to be looking for a new growth path.
Expanded the operation plate
Michelle Ice City is constantly expanding its business scope.
In 2020, Michelle Ice City upgraded and re-launched the freshly ground coffee brand "Lucky Coffee", the pricing of American 5 yuan, latte 6 yuan, fruit coffee 5-7 yuan, once again continued the playing style of Michelle Ice City in the milk tea industry, and on this basis, it further extended the categories of ice cream coffee, freshly brewed coffee, louis tea and so on.
By 2022, the number of lucky coffee stores will exceed 500, and the overall store profitability is good, including many high-profit stores with annual turnover of more than one million.
In 2021, Michelle Ice City launched the first "Snow King Castle Experience Store" in Zhengzhou, which not only sells drinks such as milk tea, but also sells chicken skewers, rice cake skewers and gluten and other fried skewers, and in other areas of the store, there are DIY ice cream and various peripheral products for sale.
The relevant person in charge of Mixue Ice City said that "the experience store is a new store type that is being tried internally, and many new categories have been added to the store", "At present, the store belongs to the testing stage and has no further plans or plans".
The Snow King Castle Experience Shop is like a model room, which seems to be exploring how high the ceiling of Honey Snow Ice City can be. The industry also believes that the test of Michelle Ice City is intended to be laid out for the future and launch an impact on the first- and second-tier markets and overseas markets.
In addition to laying out new brands, Michelle Ice City is also deepening the relevant supply chain system.
On August 31, 2021, Chongqing Xuewang Agricultural Co., Ltd. was established with a registered capital of 100 million yuan and legal representative Wu Feixiang. Snow King Agriculture is a 100% controlled enterprise of Mi Xue Ice City. From the enterprise inspection, the business scope of Snow King Agriculture includes beverage production, food production, primary agricultural product purchase, fresh fruit wholesale, etc.
The eyes of The Ice City are set on the south, and Hainan is the focus. Looking at its five new company layouts in 2021, there are three in the Hainan region, including Xianyida Supply Chain Co., Ltd., Xuewang International Trade Co., Ltd. and Dajia International Enterprise Management Co., Ltd.
To this end, it has also led to speculation: does Michelle Ice City plan to take this opportunity to add more unpopular fruits from the south and even Southeast Asia to its affordable beverage list to enhance its competitiveness? And gradually pave the way for entering overseas?
This speculation is not unreasonable, last summer, including yellow peel, orange, bergamot, perfume lemon and other southern fruits were made into explosive teas by several new tea brands.
All kinds of actions of Mi xue ice city are revealing a message to the outside world: after the sinking market of "Baping", it is going to enter the first- and second-tier highlands and overseas markets.
Towards globalization
Why is Michelle Ice City so eager to enter first- and second-tier cities and go overseas? A set of data may be able to intuitively see the current "dilemma" of Mi Xue Ice City.
All along, the expansion strategy of Mi xue bingcheng has been to first base itself on the central plains province, and then expand outward in a radial form. Judging from the national store distribution map of Mi xue bingcheng released by the narrow door restaurant eye database, the most densely distributed areas of its stores are the base camp Henan and the neighboring Shandong, with 1495 and 936 stores respectively. The number of stores in Hebei, Shaanxi, Anhui and other provinces is about 500, and the number of stores in the remaining provinces with a longer distance is the smallest, with an average of less than 200.
In the base camp of Henan, the expansion of The Honey Snow Ice City has long reached a bottleneck period. Earlier, a Beijing franchisee said in an interview with the media that the distribution of Michelle Ice City stores in Henan is too dense, and it is very difficult to find a suitable store address.
Although the expansion of Michelle Ice City in the sinking market has approached saturation, at the same time, wolves are still pouring in. As the sinking market of the basic disk of Mi Xue Ice City, it is actually not "stable".
Central milk tea brands such as Gu Ming, Shu Yi Yan Xian Cao, and Cha Bai Dao are still expanding wildly in third- and fourth-tier cities and university towns, trying to undertake the traffic of Mi Xue Ice City.
The head brand is also sinking, for example, Xicha has launched a sub-brand "XixiaoCha" with a product price ranging from 6-16 yuan to the second- and third-tier cities. Naixue's tea launched bottled drinks in October last year, and increased the number of offline channels such as supermarkets, all with the purpose of grabbing the sinking market.
Industry insiders mentioned that although the profit of Michelle Ice City in 2020 is as high as 800 million, it is basically all based on scale accumulation, in other words, Honey Snow Ice City earns hard money.
In this case, entering the first- and second-tier markets and expanding overseas has become an inevitable choice for Mi Xue Ice City to find increments.
The industry has analyzed that the long-term strategy of Michelle Ice City may be globalization. This is also reflected in its brand mission: "Make the brand stronger, make partners richer, and let everyone in the world enjoy high-quality and affordable delicious food." ”
Since opening its first overseas store in Vietnam in 2018, Michelle Ice City has entered seven countries, including Vietnam, Indonesia, Singapore, the Philippines, South Korea, Australia and Malaysia.
In the second half of 2021, founder Zhang Hongchao proposed a simple and clear and ambitious goal internally: "Two dollars, let the people of the world eat and drink well." ”
The "growth" conundrum
It is not difficult to see that this is actually a path that tries to develop from medium-low prices to high-quality parity. Zhang Hongfu once mentioned, "Our genes determine that we are more suitable for high-quality and affordable products." At this stage, we belong to the intermediate low price, and it takes a process to go from the medium low price to the high quality parity. ”
The problem is that looking for growth in the first and second tiers and overseas is not a smooth road.
Low price has become a label that is difficult to tear off in The Ice City. When Zhang Hongfu communicated with people in the industry, he was once "stinged" by a sentence: No matter how much makeup Mi Xue Ice City put on makeup, it could not become Xi Cha and Nai Xue.
And going to the first- and second-tier markets means that Michelle Ice City has to take its own low-price label and high-priced tea brands to fight hard.
Although Michelle Ice City has also re-opened the route of high-end brands, it has not yet passed. In 2018, Michelle Ice City launched the high-end tea brand M+, focusing on freshly brewed tea and specially blended milk and other drinks, and the price reached a maximum of 20 yuan. However, due to the lack of highlights in the product, coupled with the fact that the main brand does not coincide with the target users of M+, almost no one cares, and in the end, M+ ends dismal.
Ai media analysts believe that at this stage, the low-price label of Michelle Ice City is too heavy, and it is not only as simple as changing the number of product prices, but also from the user concept, tea blending, store upgrades, etc. Honey Snow Ice City wants to achieve an upward breakthrough It will take a period of planning and preparation.
At the same time, the first- and second-tier cities have long been full of smoke, and the southern market that Michelle Ice City looks at has also been "full of talents". There are not many opportunities left for Mi Xue Ice City.
According to the "2020 Q3 China Urban Vitality Research Report", the top 20 cities in the number of milk tea shops in China are mainly distributed in the southern coast, led by Guangzhou, Shenzhen and Dongguan.
In the "2021 New Tea Beverage Research Report" released by the China Chain Store & Franchise Association, it is pointed out that the new tea market in the mainland continues to expand, and the market size is expected to reach 142.8 billion yuan by 2023, but the market growth rate will decline to about 20%. Although the momentum of Michelle Ice City is still quite optimistic, it is undeniable that the new tea market has fallen into an inner volume.
Overseas looks like a good growth point. In the eyes of industry insiders, the next 3-5 years is a historic time window for Chinese brands to go to sea. Entering 2022, the good situation of China's large-scale brands going overseas has initially taken shape. Next, the milk tea brand going to sea is an inevitable trend of vigor and vitality.
Of course, Michelle Ice City is not the "first person to eat crabs". As early as 2014, Wuyi Liangpin was the first to open its first store in the Philippines, setting a record of 100 cups sold for the first time on the first day of opening; in December, "Nesher's Tea" opened a store in Singapore. In May 2019, "Deer Horn Lane" from Taiwan opened a concept store at Changi Airport.
For example, in Vietnam, long before the arrival of The Ice City, there were already Taiwanese brands of Xue Tea, Tribute Tea, and local brands Hot & Cold. After Mi Xue Ice City entered Vietnam, brands such as Yihetang, Deer Horn Lane, Huangcha, and CoCo duke also quickly entered this market.
In the short term, the sea of Honey Snow Ice City is still a process of burning money for expansion. It is reported that Mi Xue Ice City is still taking the cheap route overseas, but most of its overseas stores are opened in the bustling areas where local rents are expensive. For example, several stores in Indonesia have landed in the pedestrian streets of the city of Jakarta and Surabaya, while the Australian stores have landed in the tourist areas of the Gold Coast.
Expanding the industrial chain in order to go global is also considered to be "not smart enough". It is undeniable that only by trying our best to control goods and logistics can we make the output larger and the cost lower, and then use the ultimate low price to attract consumers and establish a moat that is difficult for other brands to easily imitate.
But the resulting pressure is also evident. Vigorously expanding the industrial chain requires huge funds and energy, and at the same time, the return takes a certain amount of time. This also means that for a long time, Mi xue ice city needs to "carry the weight forward". While carrying cost pressures, you may also face various questions, such as "whether it will affect the development of the main brand".
Under various pressures, it is not known whether the global dream of Mi Xue Ice City can be supported, but the food safety problem has been a step ahead.
During the 315 period this year, not only the "old altar sauerkraut" was on the hot search, but also the Honey Snow Ice City grabbed enough attention. According to Aurora News, since January this year, its hotline platform has successively received 123 consumer complaints from the "Honey Snow Ice City" brand in various cities in Heilongjiang Province, and many stores are suspected of "using expired milk tea powder", "selling expired dairy products", and "drinks that are wrong or cannot be sold, which are torn off the label and re-sold".
For catering enterprises, the most sensitive is the issue of food safety, which is not divided into domestic and foreign, and it does not matter whether the brand has been "pleasing or not" before. The frequent food safety problems have also exposed the "defects" in the supply chain and franchise management of Michelle Ice City.
From this point of view, Mi Xue Bingcheng wants to move from the domestic sinking market to globalization, the challenges are still heavy, and whether it can become the "second stock of tea drinking" also needs to be a question mark.
References:
1, Fengmi: Mi Xue Ice City sells fried skewers, is "making a living" and "survival"
2, there are cattle finance: honey snow ice city, go south to find the moat
3, the Economic Observer: 10,000 stores in 1 year The expansion of Mi xue ice city can not stop
4, Deer Finance: The Honey Snow Ice City that will be listed is more lacking in stories than ever
5, late Late Post: Michelle Ice City will reach 20,000 stores, the founder said that the new goal is "two dollars to let the people of the world eat and drink well"
![How Uber is deploying globally safely and quickly[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)